Part VIIIB of the Family Law Act 1975 empowers the Court to make splitting Orders requiring payments under a superannuation policy to be allocated between a member and a non member spouse. When assessing how superannuation interests are to be treated in a property settlement, the Court may include them with the pool of non-superannuation assets or assess the superannuation and non-superannuation assets separately. The first step that the Court will take is to value the superannuation interest or interests. It will then assess the contributions that the parties have made to the superannuation interests. (It will usually look at the contributions made at the commencement of the relationship, at the date of separation and at the date of the hearing.). The Court will then assess any “future needs” factors which may apply to one or both parties as set out in section 75(2) of the Act. Finally the Court will ensure that any Orders relating to the parties’ superannuation entitlements are just and equitable.
In practice, superannuation splitting Orders are usually made where the parties have unequal superannuation entitlements and where neither party is likely to retire for some time. Superannuation splitting can help parties to avoid a situation where one party retains substantial superannuation entitlements in a property settlement (which they may not be able to access for some years) and few non-superannuation assets. If a party retains the majority of the superannuation assets and few non superannuation assets, it may be difficult for them to re-establish themselves. In a case where a party has superannuation entitlements of substantially more value than the other party and neither party is likely to retire in the near future, the party with the greater superannuation entitlements will usually seek to split some of his or her superannuation entitlements in favour of their spouse and retain a greater proportion of the non superannuation assets of the marriage.
Where the parties have superannuation entitlements of similar value or where they both have entitlements of a modest value, they tend to retain their respective entitlements. If a party is likely to retire in the near future, he or she will also usually retain his or her superannuation entitlements (however there may be a superannuation split in that party’s favour from the party who will not retire for some time).
Prior to superannuation splitting Orders being made, a valuation of the relevant entitlements must be obtained. A party’s lawyer can obtain a valuation by completing a superannuation information form and sending it to the trustee of the relevant fund together with any requisite fee. Prior to superannuation splitting Orders being made the trustee of the fund must be accorded procedural fairness ie served with a copy of proposed super splitting orders. Once superannuation splitting Orders are made they are binding upon the trustee of the relevant fund.
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