Superannuation splitting

Superannuation is treated as property under the Family Law Act 1975 but it differs from other types of property because it is held in a trust.

Superannuation splitting laws allow superannuation to be divided when a relationship breaks down.

This page provides information about how superannuation interests can be split when couples divide their property after a relationship breakdown.

More information and a glossary of basic terms relating to superannuation splitting are available at:

The legal framework

Superannuation can be split either by:

an order of the Federal Circuit and Family Court of Australia or Family Court of Western Australia or
a superannuation agreement (a financial agreement that deals with a superannuation interest).

Part VIIIB and Part VIIIC of the Family Law Act 1975 give family law courts the power to deal with superannuation interests of spouses (including de facto spouses).

They also:

provide the framework for a court to make orders to distribute superannuation interests of the parties
cover superannuation agreements.

The Family Law (Superannuation) Regulations 2001 set out:

the methods of valuing superannuation interests
the way in which the payment split is to be put into effect
the information that the trustees have to provide.

Examples of the valuation of superannuation interests using the methods and factors set out in the regulations are available at:

Valuation examples

Each financial year the Australian Government Actuary makes a Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination.

This provides the method to calculate the interest rate for the adjustment of a base amount for some payment splits of some interests under the superannuation splitting laws. The annual determinations can be found on the Federal Register of Legislation website.

Part 7A of the Superannuation Industry (Supervision) Regulations 1994 creates obligations for trustees to take action to give effect to court orders.

Visibility of superannuation assets in family law proceedings

Superannuation is an increasingly significant asset in the property pool for separated Australian couples.

From 1 April 2022, parties to family law property proceedings can apply to the Federal Circuit and Family Court of Australia or the Family Court of Western Australia to request their former partner's superannuation information, held by the Australian Taxation Office.

Parties can then use this information to seek up-to-date superannuation information from their former partner's superannuation fund.

This makes it harder for parties to hide or under-disclose their superannuation assets in family law property proceedings, and reduces the time, cost and complexity for parties seeking information about their former partner's superannuation. Access to this information will better support separated couples to divide their property on a just and equitable basis.

Details about how a party can apply for this information are available on the websites of the Federal Circuit and Family Court of Australia and the Family Court of Western Australia.

Giving effect to a superannuation splitting agreement or order

Under the superannuation splitting laws, an agreement or court order to split superannuation is, in effect, an agreement or order for payment splitting.

This means that, as and when, a payment from a superannuation interest becomes payable to the member spouse (usually because a condition of release has been met, such as retirement from the paid workforce) a certain amount will be paid to the non-member spouse and the remainder will be paid to the member spouse.

Payment splitting does not create a new superannuation interest for the non-member spouse.

If there is a payment splitting agreement or order operating on a superannuation interest, the splitting laws may permit the creation of a new interest for the non-member spouse. They may also permit a transfer or roll-out of benefits for the non-member spouse to another fund.

These options are known as interest splitting. Interest splitting lets the non-member spouse access entitlements independently of the member spouse.

For Commonwealth regulated funds, Part 7A of the Superannuation Industry (Supervision) Regulations 1994 and Part 4A of the Retirement Savings Account Regulations 1997 set out the circumstances in which interest splitting options are available. The regulations also set out the process that funds and retirement savings account providers must follow.

Methods for valuing specific superannuation interests in particular superannuation schemes

Methods for valuing superannuation interests set out in the Family Law (Superannuation) Regulations 2001 may not be appropriate for some superannuation interests.

The regulations allow the Attorney-General to approve methods to be used to determine the gross value of specified superannuation interests. The Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003 includes factors for determining the value of interests in more than thirty superannuation funds or schemes.

Where alternative valuation methods for some superannuation funds or schemes have been approved, determinations are also made to set out valuation information requirements for trustees that apply in place of those under the regulations e.g. Family Law (Superannuation) (Provision of Information - Victorian Pension Scheme) Determination 2008. These determinations can be found on the Federal Register of Legislation website.