IMPORTANT INFORMATION FOR ADVISERS
This material must be modified to satisfy your own advisory obligations.
DISCLAIMERS
You may choose to cut and paste all or part of this publication into your own business branded template.
This document has been prepared by Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468
(Colonial First State) based on its understanding of current regulatory requirements and laws as at 3 June 2015. While all care
has been taken in the preparation of this document (using sources believed to be reliable and accurate), to the maximum
extent permitted by law, no person including Colonial First State or any member of the Commonwealth Bank group of
companies, accepts responsibility for any loss suffered by any person arising from reliance on this information.
This document does not take into account any person’s individual objectives, financial situation or needs. You
should read the relevant Product Disclosure Statement (PDS) before making any recommendations to a client.
Clients should read the PDS before making an investment decision and consider talking to a financial adviser.
A guide to splitting super after a separation
Ending a relationship is not only emotionally distressing, it can also be
financially devastating if it’s not managed carefully. The latest figures from the
Australian Bureau of Statistics (ABS) show that 47,638 divorces were granted
in 20131, meaning relationship break-ups are an unfortunate reality in
Australia.
Dividing your assets can be among the most challenging aspects of ending a
relationship.
Family law in Australia recognises this and there are superannuation splitting laws in
place for when a marriage ends. The rules also apply to de facto partnerships.*
Determining how super, along with your other assets, is to be divided is generally done
either through an agreement or Court order.
A superannuation agreement can be put in place before, during or after your relationship
and may be part of a broader ‘binding financial agreement.’
If you don’t have a binding financial agreement in place you can obtain a Court order.
There are two types of Court orders:


Consent orders, which is where you don’t have a binding agreement, but can
agree regarding how your property will be divided. A consent order essentially
approves your agreement and makes it binding. However, the Court must
consider whether the agreement is fair prior to approving.
Financial orders, which is where you can’t agree about how your property will be
divided. In this case the Court will consider a range of factors to determine how
your super and other property should be split.
Splitting super – a step-by-step process
While the process can vary depending on your situation, a superannuation split usually
follows these steps:
1. Identify and value the super accumulated while you were together
The first step is to find out what your super and your partner’s super is currently
worth. You can send a request to your spouse’s super fund for information, even if
you aren’t a member of the fund.
2. Seek legal advice
1
Australian Bureau of Statistics (ABS), Marriages and divorces, Australia, Nov 2014.
If you don’t already have an existing binding financial agreement in place, it’s important
to seek independent legal advice about whether to put in place a binding financial
agreement (for example if you can agree with your former partner regarding the division
of your assets) or whether you will need to seek a court order if you can’t agree.
If you and your former partner are able to enter into a binding financial agreement,
make sure you keep a copy as it’s not registered in Court.
You can also in many cases arrange (by agreement or via a court order) for a ‘payment
flag’ to be placed on your and your partner’s superannuation accounts. This prevents
most withdrawals being made from the account prior to any super split occurring. A
payment flag can be lifted by agreement or by a court.
3. If a court (financial) order is required, each partner’s contributions to
the relationship are assessed
A court-issued financial order will decide how your super is divided. Like other assets,
super is not necessarily split according to how much each of you contributed financially.
For instance, contributions like taking care of the children and the family home may be
taken into account. A court may also consider the financial position that both parties will
be in after the divorce or separation, which may affect how super is divided.
4. Split the super
Once you have a valid agreement or Court order, you’re able to apply for your
superannuation to be split. Note that where you or your spouse’s super balance exceeds
certain thresholds, you may need to be separated for 12 months prior to being eligible to
split super.
As super is usually held for your retirement, in most cases superannuation that is split to
you will need to remain within the super system until then. You can generally either
establish a new account within the existing fund or transfer it to a new fund.
If you have reached the age when you can access your super, these benefits become
accessible in the same way as the rest of your super.
In some situations, it may not be possible or practical to split superannuation
immediately. Where this is the case, a payment flag may apply until a future time (for
example when a retirement benefit becomes payable in the future) at which point
benefits can normally then be split.
*Except in Western Australia, although a WA court will still take super into account when
splitting your property.
Want to know more?
Talk to your financial adviser, call us on 13 13 36 or visit our website at
colonialfirststate.com.au