A divorce or separation can be an incredibly stressful time – emotionally, practically, and financially. While many people focus on who gets the house or how to share care of the kids, superannuation is one of the most significant assets to consider during a property settlement.
Super can be complex because it's not something you can access right away, and it's subject to special rules – but that doesn't mean it's excluded. In Australia, superannuation is treated as property under the Family Law Act 1975, and it can be split, adjusted, or flagged during a divorce or separation.Keep reading this article put together by our divorce lawyers Sydney to learn how super is treated in a divorce or separation.
Understanding Superannuation in the Context of Divorce
Superannuation plays a key role in future financial planning, which is why it's part of the overall property pool considered when a relationship breaks down – whether it's a marriage or a de facto relationship.
Under the Family Law Act, superannuation is treated as property, just like real estate or bank accounts. It can be divided between you and your former partner as part of your property settlement, either by agreement or court order.
Importantly, while super can be split, it's not like cash – it's held in trust, which means you generally can't access it until you meet a condition of release, such as reaching retirement age. So even if some of your super is transferred to your ex (or vice versa), it stays in the superannuation system.
What Happens to Super in a Divorce or Separation?
When a relationship breaks down – whether it's a marriage or de facto relationship – all property must be considered for division, including superannuation. Under the Family Law Act 1975, super is treated as part of the property pool and can be adjusted, split, or retained depending on the overall outcome of the property settlement.
Superannuation can often be one of the most valuable assets in a relationship, particularly when there's no jointly owned real estate. That's why it's essential to understand how it fits into the broader financial picture.
Even though super is treated like property, it's not a liquid asset – which is why it's handled differently in practice (more on that below).
Do You Have to Split Super in a Divorce or Separation?
You don't always have to split superannuation – but you do have to consider it as part of the overall asset pool.
There are typically three ways super can be dealt with:
- It's split between the parties: A portion of one person's super is transferred to the other's fund, based on an agreement or court order.
- It's flagged for later: A payment split is postponed by "flagging" the super account, usually until more information is available or one party reaches retirement age.
- It's not split but considered: The parties agree to leave their super untouched and offset the balance through other property (e.g. one keeps the super, the other keeps more equity in the home).
While splitting super is common, especially in long relationships, it's not mandatory. It depends on the nature of your asset pool and what's considered just and equitable in your situation.
How Superannuation is Split in Divorces
When superannuation is split, the process doesn't involve withdrawing or cashing it out – it stays within the super system and is simply transferred to the receiving party's nominated super fund.
Here's how it generally works:
- The parties disclose all their super interests
- They reach an agreement (or obtain a court order) on how it will be split
- The paying party's fund transfers the agreed amount into the other party's account (or creates a new interest within the same fund)
Super can be split in any proportion – it's not always 50/50. The court (or the parties) will consider contributions, future needs, age, health, and other factors when deciding what the fair split should be.
Keep in mind that even after a split, super remains inaccessible until retirement or another condition of release is met. It doesn't become instant cash.
Is Super Split 50/50 in a Divorce
There's a common misconception that superannuation – like all assets – is automatically split 50/50 in a divorce or separation. In reality, there is no fixed rule for how super should be divided under Australian family law.
The Family Court considers a wide range of factors when deciding what a fair division looks like, including:
- The length of the relationship
- Each party's financial and non-financial contributions
- Age, health, and income-earning capacity
- Whether one party will be the primary caregiver of children
- Each person's superannuation entitlements and other financial resources
In longer relationships, a 50/50 split may be more common – but even then, it depends entirely on the circumstances. A division of super that appears unequal (e.g. 60/40 or 70/30) might actually be considered fair if one partner had significantly more responsibilities during the relationship or has greater future needs.
How Long After a Separation or Divorce Can You Make a Claim for Super?
There are strict time limits for making a claim on superannuation as part of a property settlement:
- If you were married, you must apply within 12 months of your divorce becoming final
- If you were in a de facto relationship, you must apply within 2 years of the date of separation
After these deadlines, you can only proceed with special permission from the court – and that's not always granted. It's important to act quickly to ensure your entitlements are protected.
If you're unsure whether you're within the time limits, or if you're thinking about a superannuation split, it's best to get legal advice as early as possible.
Options for Splitting Superannuation
Superannuation can be split in a few different ways during a divorce or separation, depending on whether you and your former partner agree on the outcome.
Here are the main options:
- Split the Super
This is the most common outcome. Super can be split either by court order or agreement (such as through consent orders or a Binding Financial Agreement). The split doesn't mean the money is paid out – it's transferred from one person's super fund to the other's and remains subject to standard superannuation laws.
The amount transferred depends on various factors, including the total value of assets, the length of the relationship, and each party's contributions (both financial and non-financial).
- Defer a Decision (Flagging)
If you're not ready to decide how to split super – for example, if a fund's value is unclear or a party is nearing retirement – you can agree to flag the account. This means the fund can't pay out any entitlements until the flag is lifted, allowing for a decision to be made later.
This is less common but can be useful in specific situations.
- Leave the Super Alone
Sometimes, parties agree to leave each other's super untouched. This usually happens when the super balances are similar or when the parties choose to offset the value of the super with other assets (e.g. one person keeps the house, the other keeps the super).
Even though the super isn't split, it's still part of the overall calculation and must be disclosed.
No matter which option is chosen, it's important to get proper documentation in place and ensure the agreement is legally binding to avoid future disputes.
How to Protect Superannuation in Divorce
If you're entering a relationship – or going through a separation – and want to protect your superannuation entitlements, there are a few practical steps you can take:
- Create a Binding Financial Agreement (BFA)
Also known as a prenup or postnup, a BFA can outline how super and other assets will be divided if the relationship ends. BFAs can be made before, during, or after a relationship and are legally enforceable when properly drafted with independent legal advice.
- Keep Financial Records
Whether you're protecting your own interests or preparing to make a fair claim, it's essential to maintain clear records of:
- Your super balance over time
- Contributions made before and during the relationship
- Any relevant account statements or employer contributions
This helps clarify what each party brought into the relationship and can support your case in a property settlement.
- Don't Hide Information
Trying to conceal your super is not only unethical – it's illegal. Both parties are required to provide full and frank disclosure of all assets, including super. The Family Court can overturn settlements if it finds that a party deliberately withheld information.
Protecting your super starts with knowing your rights and understanding your responsibilities – and that's where professional advice can make all the difference.
What Happens If One Partner Hides Their Super?
If one party tries to hide their superannuation during a divorce or separation, it's a serious breach of their legal obligations.
Under the Family Law Rules 2021, both parties must provide full and frank financial disclosure. This includes disclosing all superannuation interests – even small balances or inactive accounts.
To help ensure transparency, you can:
- Request your former partner's super information directly from the ATO using the Superannuation Information Request process
- Work with a family lawyer to obtain disclosure documents
- Use court orders (if necessary) to compel disclosure of hidden or undisclosed super
If the court finds that one person has attempted to conceal superannuation assets, it can adjust the property settlement in favour of the other party, or even set aside an existing agreement.
Superannuation and De Facto Relationships
Superannuation can also be divided when de facto couples separate – not just married couples.
In all Australian states and territories (except Western Australia), de facto couples have the same rights as married couples under the Family Law Act when it comes to superannuation and property settlements.
This means:
- Super is included in the asset pool
- It can be split, flagged, or offset like in a divorce
- The same time limits apply (you must make a claim within 2 years of separation)
To access these rights, you must first establish that a de facto relationship existed. This usually means you lived together on a genuine domestic basis for at least two years, or had a child together. If you're unsure about your legal standing, it's best to seek legal advice early on.
How Superannuation is Valued
Before any split can take place, the value of each party's superannuation must be determined. This isn't always as straightforward as checking the last statement – especially with complex funds.
Here's how super is typically valued in a family law matter:
- You can request a valuation by using the Superannuation Information Kit, which includes a Form 6 Declaration and a Superannuation Information Request Form
- >The super fund will provide the current balance or, for defined benefit funds, a valuation based on actuarial formulas
- For self-managed super funds (SMSFs), a formal valuation may require assistance from a financial expert or accountant
Once valued, the super interest can be factored into the overall property settlement – either by splitting the balance or using it to offset other asset divisions.
FAQs
Can I access super immediately after a split?
No. Even if superannuation is split, it remains in the super system and is preserved until a condition of release is met, such as reaching retirement age. The receiving party doesn't get the funds in cash – they are transferred to their nominated super account.
Is my ex automatically entitled to half my super?
No. There's no automatic or default 50/50 rule. The division of super depends on the overall property settlement, considering factors like contributions, future needs, and what the court considers fair.
Do I need to go to court to split super?
Not necessarily. Many couples formalise a superannuation agreement through consent orders or a Binding Financial Agreement without needing to attend court. However, court involvement is an option if an agreement can't be reached.
What happens if I don't know how much super my ex has?
You can request superannuation information from the ATO using a Superannuation Information Request form, available through the Family Court of Australia. This ensures both parties disclose their super balances during the process.
What if we're already separated but haven't finalised anything?
If you're separated and considering a property settlement, it's important to act within the required time limits – 12 months after divorce, or 2 years after de facto separation. You can still negotiate and finalise how super will be handled, but don't leave it too long.
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.
