As of 2002, superannuation funds can be considered as property and can be included within the asset pool of a property settlement. Prior to this however, superannuation was considered as a financial asset and so was dealt in a different manner to property.

There are different paths that can be taken in relation to superannuation. The Family Law Act gives the court the power to divide the superannuation fund, to adjourn the matter until the parties reach the time when they have access to their funds or can make orders for superannuation to be allocated once it is vested.
How is my superannuation valued?

Accumulation Schemes: benefit in such schemes is determined by the level of contributions and investment performance of the fund. Value is determined according to the latest membership statement.

Defined Benefit Schemes: benefit is determined by factors including years of service with the employer and salary levels. The full value of such a scheme cannot be determined until retirement.

Flagging of superannuation interests

The court is required to treat superannuation as property. It can either flag superannuation interests or split superannuation interests.

Superannuation interest in the growth phase (the period of time before the member spouse has reached a condition of release and before any money has been paid out of the interest as a result of the member meeting a condition of release) can be subject to a payment flag, which prevents the trustee of the superannuation fund from dealing with the superannuation interest until the flag has been lifted. This can only be done by an agreement or a court order to lift the flag. Payment splitting can be done by either a superannuation agreement or a superannuation splitting order. Superannuation interests are usually split according to the base amount of the superannuation which the non-member spouse will receive, however, superannuation amounts of $5000 or less cannot be split. Parties are able to specify a method in which the superannuation interest will be split.

How is my superannuation split?

The starting point for splitting superannuation interest is the Webber/West and Green formula. This requires:
– division of the number of years of cohabitation by the number of years in the superannuation fund
– multiplied by the current value of the fund,
– which is divided equally for each of the parties.

However, following the calculation of property according to this formula, consideration is given to the welfare contributions of the other spouse and the impact on either party of receiving the intangible benefit of superannuation.

When the superannuation interest holder has been involved in property settlements for previous relationships, each subsequent spouse receives the percentage that they are entitled to, of whatever interest remains. An example as provided by the Family Law Act includes:

W has a superannuation interest that is subject to 3 payment splits in respect of W’s marriages to X, Y and Z (in that order). The operative times of the payment splits are in the same order as the marriages. Assume each payment split provides for a 50% share to the non member spouse. W becomes entitled to a splittable payment of $100. The final payment entitlements are as follows: X gets $50. Y gets $25. Z gets $12.50. W gets the remaining $12.50.

How can a Lawyer help you?

Property settlements and superannuation issues in particular can be very complex. A family lawyer will carefully examine your case, assist you in obtaining all the necessary information and advise you on methods of splitting superannuation, to ensure that the best outcome is achieved for you.

Author Bio: Elizabeth Lane has many years experience working with the Family Lawyers Wollongong Prime Lawyers Wollongong.

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