Earlier this week we shared the article WA de facto couples to split superannuation after break-ups about the proposed changes to the laws for separation of de facto relationships. Western Australia is the only State which did not refer their powers in relation to de facto couples with the introduction of the Family Law Act 1975. As such, de-facto couples in Western Australia are subject to the Family Court Act 1997. Western Australia is also the only State to have their own Family Court.
The proposed amendments to the laws for separation of defacto relationships will see Western Australia mirror all other States so that de-facto couples as well as married couples experiencing separation will able to split their superannuation in property settlement matters.
How does splitting superannuation work?
In the family law system, superannuation is treated as an asset and is considered when dividing property.
Determining the value of an interest in a superannuation fund can be difficult and there are some funds which cannot be subject to a superannuation split.
Superannuation is most commonly split either by the transfer of a dollar sum from the superannuation fund of one party to the superannuation fund of the other party.
A superannuation splitting order can only occur by the roll-over of funds from one superannuation account into another; it cannot be withdrawn from one parties' superannuation fund as cash.
The law in relation to splitting superannuation can be complex and can only be done by way of a Financial Agreement or Family Court Orders.
For a superannuation splitting order to take effect the following needs to be done:
- A financial agreement or Form 11 Application for Consent Orders and Minute of Consent Orders needs to be prepared to provide for the split;
- The draft agreement ought to be provided to the Superannuation Fund from which the split is to occur for their approval; and
- Once the Financial Agreement is complete or the sealed orders have been issued by the Family Court either the original or a certified copy of the original orders (depending on your super fund) is provided to the Fund to enable the split to occur.
Depending on your superannuation fund, and the interest you hold, the superannuation split may be subject to tax implications as well as administrative fees for the transfer. It is important to seek independent legal and financial advice before entering into any agreement to split superannuation.
It is hoped that the proposed changes to the laws for de facto relationships come into effect quickly to ensure that married and de facto couples in Western Australia have the same rights and entitlements when it comes to splitting superannuation following separation.
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.
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