Published: 28 September 2016
Author: Ryan Carlisle Thomas
Superannuation in family law
One of the most common questions we are asked about in family law property divisions is "what about super?"
The most important thing to remember about superannuation in family law is that it is property – just like your house, car or investments. Often superannuation is one of the most valuable assets in a family’s asset pool.
Although super is an asset that you cannot (usually) touch until retirement and is earned as a result of your employment, it is still an asset to be considered. The family law courts appreciate that superannuation earned during the course of a relationship is earned as a result of the contributions – whether directly or by non-financial means - of both parties. For example, if one party works and is paid super while the other stays at home to attend to everyday family matters (and therefore earns little or no superannuation), the justification is that the party working would not have been able to earn that amount of superannuation if the other party had not taken up the responsibility of looking after the children and/or home on a daily basis. Therefore the contributions to the accumulation of super are considered to be equal.
Assets to be divided equally between parties
The Family Law Act states that superannuation is an asset available for division between parties and the law provides for superannuation to be split so as to ensure that a just and equitable outcome in the division of property property can be achieved.
The general practice of the family law courts is to equalise the amount of superannuation between parties following separation (although there are exceptions to this practice) so that they both walk away with the same amount of superannuation and can start over on an even playing field with respect to super. Therefore part of the super of one party will be rolled over to the other party and become their property as if it had been accumulated by them all along.
The rules relating to withdrawing superannuation still apply and it cannot generally be touched until retirement, despite the rollover.
This is a much fairer way to deal with superannuation than in previous years because it recognises the contribution of both parties in the partnership and allows them to plan more effectively for retirement. With both parties having access to superannuation that otherwise they may not have had, forcing them to be reliant on the aged pension, some of the burden on our welfare system is removed.