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Dividing assets after a separation can be challenging, even in the most amicable separations.
If you are going through a relationship break up, it’s important to understand how superannuation is treated in a financial settlement.
Super interests are treated as a different type of property and not as a financial asset for the purposes of court orders and settlement agreements.
Separated couples can value and split their super interests and come to their own agreement. The courts will only get involved if an agreement can’t be reached.
Separated couples can make a superannuation agreement about how super will be split before or during the marriage or de facto relationship or after the relationship has ended.
There are special rules about a superannuation agreement, but provided the agreement complies with the legal requirements detailed in the super splitting laws, it is a binding financial agreement.
Super doesn’t need to be tricky to understand.
When 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 and financial orders.
Consent orders are for couples who are in agreement about how their property will be divided. A court considers whether the agreement is fair, then a court order makes it binding.
Financial orders are for people who can’t agree how their property will be divided. The court considers a range of factors in determining how super and other property will be split.
The Family Law Court of Australia explains how the law treats superannuation.
You need to know the balance of your and your partner’s super accounts to agree on a fair settlement.
Your superannuation fund can give you information on your account and can also give you information if you’re the spouse of a member, or a person entering into a superannuation agreement with a member.
If you don’t have a binding financial agreement in place, you may wish to seek legal advice to decide if you and your partner can reach an agreement or you need to apply for a court order to assess each partner’s contribution to the relationship.
Many factors are taken into account when splitting super including financial contributions and contributions such as taking care of the children and the family home. The court may also consider the financial position of both parties after the divorce or separation, which may affect how super is divided.
Your superannuation fund will split a member’s account once it receives a court order or superannuation agreement.
After the split, the specified amount will be taken from the account. If the split happens after the specified date on the court order or agreement, an interest adjustment may be calculated.
The money can be transferred into an existing fund or either party can establish a new super fund account.
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