Superannuation and Divorce: What Are the Rules?

Divorces are often difficult and understanding the relationship between superannuation and divorce can be confusing. Due to the complexity and uniqueness of each relationship breakdown, legal advice should be sought from a lawyer specialising in Family Law.

Here’s some things to consider with your super when dealing with a divorce or separation.

Superannuation and Divorce

It is essential to take into account superannuation when finalising a divorce or separation. There are certain superannuation divorce rules that apply in such instances and a number of ways super can be dealt with.

Superannuation Divorce Rules

Superannuation is considered property for divorce and separation purposes and therefore needs to be taken into account when calculating a division of assets.

Divorce includes separation. Spouse includes de-facto relationships and refers to both heterosexual and same-sex relationships, apart from in Western Australia.

Division of Superannuation in Divorce

There is no general division of superannuation in divorce. Each circumstance is different, so a 50/50 division should not be assumed.

The division of superannuation in a divorce will be based on the settlement agreement or court order.

How Long After Divorce Can You Claim Superannuation?

You cannot claim superannuation after a divorce. Claiming superannuation suggests you can withdraw super from the superannuation into your personal bank account. However, despite divorce or separation occurring, superannuation remains subject to the general superannuation preservation rules. That is, you can withdraw super as a result of a divorce. You are still required to satisfy a superannuation condition of release to access your super.

Is My Husband/Wife Entitled to Half My Super?

Your husband or wife will not necessarily be entitled to half of your super. The amount of super that your husband or wife is entitled to is determined by the divorce agreement or court order.

In a basic situation, the best option may be for half of your former spouse’s super to be transferred to your account, but there are other ways of dealing with financial settlements.

Do I Have to Split My Superannuation in Separation?

It is not a requirement to split your superannuation in a separation. However, your superannuation will be taken into account as part of your overall property when preparing a divorce settlement or when court orders are involved. So, while your super might not itself be split, it will effectively be split in accordance with the overall agreed or court-ordered division.

For example, all of your assets, property, investments and superannuation will be added together when determining the appropriate division of assets. However, it may be more practical or agreed upon to leave each spouse’s super balance in its current form and simply balance the division up through the transfer of personal assets. This can be a particularly useful approach if either party has illiquid superannuation assets or a defined benefit superannuation scheme.

If, as part of your superannuation split resulting from a divorce, you decide to switch super funds, it is important to first understand the risks of doing so. The video below explains the risks of switching super funds.

Do I Need a Court Order to Split Superannuation?

A court order is not required to split superannuation resulting from divorce or separation. A written legal agreement and acknowledgement that you have obtained legal advice is all that is required to split superannuation under divorce circumstances.

Can My Ex Access My Super?

Your ex cannot access your super directly. Your ex may be entitled to some of your super as part of a divorce agreement or court order – in which case a portion of your super would be transferred to their super account. They will also have access to information on your superannuation account, including the balance. But they will not have access to our super in terms of the ability to transact on the account.

How Can I Claim My Ex-Husband/Wife’s Super?

To claim entitlement to part of your ex-husband or ex-wife’s super, you will need to come to a financial settlement agreement with your ex via a lawyer and by seeking independent legal advice. Alternatively, a court order may entitle you to some of your ex-husband or ex-wife’s super.

However, even if you have a successful claim against your ex’s super, you are not eligible to access this amount without first meeting a superannuation condition of release. The portion of your ex’s super that you may be entitled to will be transferred to your super account.

Who Should I Speak to About Divorce and Super?

Initially, you may consider contacting your financial planner and superannuation provider in relation to superannuation and divorce (or separation).  They will be able to point you in the right direction and the steps involved in the process – without first incurring costly legal fees.

Once you have a reasonable understanding of how your super will be dealt with, you can then get in touch with a specialist Family Lawyer.

Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.

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