This article will outline the interpretation of superannuation interests in the Family Law Act 1975. Superannuation interests are a type of property that is subject to division between separating or divorcing couples. A superannuation interest is a benefit that an individual has accumulated in a superannuation fund or scheme.
The employer usually handles his/her employee's superannuation fund and will only release it after the employee's retirement. Since superannuation is treated as property during divorce, an ex-spouse may be entitled to a portion of that superannuation. It is important to note that superannuation interests are not automatically included in a property settlement.
Instead, both partners must agree to include them during the property settlement phase or have the court include them in a court order. Additionally, there are time limits for making a claim for superannuation as part of a property settlement. Moreover, there are many relevant legislations that people should know about when reading up on superannuation interests.
We have drafted this article about the interpretation of superannuation interests in the Family Law Act.
90XD and 90XDA: Definitions of Terms
Section 90XD contains important terms and jargon that can help with the interpretation of superannuation interests. Below is a table that outlines all these terms.
Terms From A-L
| Term | Definition |
| Approved deposit fund | An indefinitely continuing fund that is maintained by a Registrable Superannuation Entity (RSE) licensee that is a constitutional corporation. This fund must also be maintained solely for approved purposes. |
| Declaration time | The time when the declaration was signed by a spouse. It can also refer to the time when the spouse last signed a declaration if both spouses have signed. |
| Eligible superannuation plan | - A superannuation fund within the meaning of the Superannuation Industry Supervision Act (SIS) 1993 - An approved deposit fund - A Retirement Services Account 1997 (RSA) - An account within the meaning of the Small Superannuation Accounts Act 1995 - A superannuation annuity within the meaning of the Income Tax Assessment Act 1997 |
| Flagging order | An order directing the trustee not to make any splittable payment in respect to the interest without the leave of the court. Additionally, the order must also require the trustee to notify the spouses involved within a specific timeframe specified in the order. |
| Flag lifting agreement | An agreement that either: - Provides that the flag is to stop operating without a payment split - Specifies an amount, method, or percentage in accordance with subsection 90XJ(1) |
| "In force" | The definition given in Section 90XG under the interpretation of superannuation interests. Section 90XG will be outlined in this article. |
| Interest | A prospective or contingent interest and also includes an expectancy |
Terms From M-R
| Marriage | This includes a void marriage |
| Member | A beneficiary in relation to an eligible superannuation plan |
| Member spouse | A spouse who has the superannuation interest in relation to a superannuation interest |
| Non-member spouse | The spouse who is not a member spouse in relation to a superannuation interest |
| Operative time | - Definition is given in Section 90XI in relation to a payment - Definition is given in Section 90XK or 90XLA(2)(c) in relation to a payment flag - The time specified in the order in relation to a payment split court order |
| Payment flag | - The application of Section 90XL in relation to a superannuation interest - The application of a flagging order in relation to a superannuation interest |
| Payment split | - The application of Section 90XJ of the Family Law Act in relation to a splittable payment - The application of a splitting order in relation to a splittable payment |
| Percentage only interest | A superannuation interest prescribed by the regulations for the purposes of this definition. |
| Regulated superannuation fund | Meaning is given in Section 19 of the SIS Act 1993 |
| Reversionary beneficiary | A person who becomes entitled to a benefit in respect of a superannuation interests of a spouse after the spouse dies |
| Reversionary interest | Meaning is given in Section 90XF under the interpretation of superannuation interests of the Family Law Act. |
| RSA | Retirement Savings Accounts Act 1997 |
Terms From S-Z
| Secondary government trustee | A trustee that is: - The Commonwealth, a State, or Territory; and - A trustee only because the operation of Section 90XDA of the Family Law Act |
| Separation declaration | Meaning is given in Section 90XE under the interpretation of superannuation interests of the Family Law Act. |
| Splitting order | An order under Section 90XT(1) |
| Spouse | A party to a marriage or de facto relationship |
| Superannuation agreement | An agreement that deals with the superannuation interests of either married or de facto couples as if those interests were property |
| Superannuation interests | An interest that a person has as a member of a superannuation plan, but does not include a reversionary interest |
| Trustee | - The trustee of the plan if the plan is a fund that has a trustee - The person identified in accordance with the regulations if the trustee of the plan does not apply - The person who manages the plan According to Section 90XDA of the interpretation of superannuation interests: "If a person who is not the trustee of an eligible superannuation plan has the authority to make payments to plan members, references to the trustee of the plan include references to that person." |
| Unflaggable interest | A superannuation interest that is unflaggable |
| Unsplittable interest | A superannuation interest that is unsplittable |
Section 90XE: Splittable Payments
According to Section 90XE of the interpretation of superannuation interests, each of the following payments made to the following people is a splittable payment:
- The spouse
- Another person for the benefit of the spouse
- The legal personal representative of the spouse (if the spouse has passed away) or the reversionary beneficiary (if the reversionary beneficiary passed away). A reversionary beneficiary is a person who will receive the pension of a dead person.
- The reversionary beneficiary after the death of a spouse
A payment is not splittable if a payment is prescribed by the regulations for the purposes of the factors below. The regulations may prescribe a payment either:
- Generally for the purposes of all payment splits in respect of a superannuation interest; or
- Only for the purposes of applying this Part to a particular payment split in respect of a superannuation interest
What if a payment is made to another person for the benefit of 2 or more persons who include the same spouse? If this is the case the payment is a splittable payment to the extent to which it is paid for the benefit of the spouse.
Section 90XF: Reversionary Interest
Section 90XF of the interpretation of superannuation interests defines reversionary interest. A reversionary interest with respect to the person's entitlements to benefits is contingent upon the death of another person who is still living.
Section 90XG: Meaning of "In Force"
Section 90XG of the interpretation of superannuation interests provides the meaning of "in force". Let's use them in different contexts for the following:
| Financial agreements | This is in force at any time when it is binding on the parties in accordance to Section 90G |
| Part VIIIAB financial agreements | This is in force at any time when it is binding on the parties in accordance with Section 90UJ |
| Superannuation agreements | This is in force at any time when a financial agreement or Part VIIIAB financial agreement is in force |
| Flag lifting agreement | This is in force if and only if: - It meets the requirements set out in 90XN(3); and - The flag lifting agreement has not been set aside and terminated |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
