Superannuation is one of the major assets that most Australians have in their possession. It’s also often an asset that often gets overlooked during divorce proceedings, especially with its lack of physical presence.
During a divorce, it’s important that both parties get their fair share of available super.
However, not all divorces are clean. When there is animosity between the parties, family law proceedings are in effect, or one party is being dishonest or evasive about their available super, the process can become far more complicated as a result.
In September, a new law was passed by the federal government that promotes the visibility of superannuation assets in family law proceedings. The new law — contained in the
Treasury Laws Amendment (2021 Measure No. 6) Bill 2021
that received Royal Assent on 13 September — provides an information-sharing mechanism between court registries and the ATO to improve the visibility of superannuation assets.
The primary aim is to allow for more partners to receive back what is rightfully theirs in the event of a difficult or messy divorce, and to split super on a more just and equitable basis.
It is believed that more than 60% of women suffer from financial hardships within 12 months of separation as a result of a lack of disclosure by a former partner about their financial situation.
This means that women, who often have less super as a result of circumstances (such as taking time off work to care for children) receive a smaller share of the property (particularly superannuation) than they are entitled to.
Specifically, the amendment was designed with the intent to alleviate the hardships often faced by parties who experience significant drops in disposable income after divorce, particularly for women and domestic and family violence victims.
The amendments should make it harder for parties to hide or under disclose their superannuation assets.
What Is Involved?
The Australian Taxation Office (under the ATO) will be allowed to release super information to a family law court upon request as a result of this legislation.
To obtain the information, an applicant would have to be a party to a family law property proceeding and apply to the court registry to request their former partner’s super information, which is held by the ATO.
The information may only be accessed by relevant parties and for the purpose of permitted family law proceedings.
Splitting The Difference
While the super pool held between two parties is considered joint property, it does not get split 50/50 in the event of a divorce. Each case will be examined to determine what is fair and equitable by parties. Considerations should include what was brought into the marriage, what was contributed during the marriage, capacity after the marriage and number of dependents.
Both de facto and married relationships will have this lens applied to them, however, de facto couples in Western Australia are an exception to these rules.
Are you concerned about your superannuation in the event of a divorce, and looking for advice or more information? Speak with us.