What’s the Fate of Your Superannuation Benefit after a Divorce?
Divorce opens many ugly realities and a thousand confusing and conflicting problems like a spouse’s rights to their partner’s superannuation. This guide will help clarify the blurred lines between divorce and settlement and the rules behind access to super that an ex agrees to share.
Divorce and Superannuation Guide
- How to access your share of super after a divorce
- Conditions for super fund release
- Super benefits after a divorce
The Family Court of Australia states that superannuation is considered a different type of property by superannuation splitting law. This means couples can value each of their super fund and split the payments. However, super does not become a cash asset when it is split.
Accessing Your Share of Super After a Split
If your ex agrees to split their super fund and share some of it with you, it will remain inaccessible until you reach retirement age, as specified by superannuation laws.
As previously mentioned, it doesn’t become a cash asset after a split and will remain in the superannuation system until you satisfy the conditions for release.
Until then, it will be preserved super benefits.
Conditions of Release
Some of the common conditions you must satisfy to access the super your ex shared with you are:
- You turn 65
- You retire after you reached preservation age, which differs from one person to another
- Your preservation age is 55 if you were born before July 1960
- Your preservation age is 60 if you were born after June 1964
- Your preservation age may be 56, 57,58 or 59 if you were born within the time frame from July 1960 to June 1964
- You transition from super fund to retirement pension
In certain superannuation funds, you may gain access to them due to severe financial hardships.
Fate of superannuation benefits after a divorce
In the event of a relationship breakdown, a super fund or super payment can be divided between partners by agreement or court order, according to the Family Law Act 1975 and the Superannuation Industry (Supervision) Act 1993 (SISA).
This can be done in 1 of 3 ways.
- Split a super interest via a payment split or an interest split.
- Flag the super benefits and put off making a decision of what happens to the funds at a later time.
- Treat super as a financial resource and leave it untouched.
Seek Professional Advice From Taxback
In Western Australia, super benefits can’t be split but will be divided between the couple like any another asset of a relationship. There are other rules of access that need to be dealt with as well, requiring input from someone familiar with the laws. Consult with Taxback and protect your rights and interests.