Changes to Superannuation Legislation

Many West Australia’s are unaware of the fact that WA has been lagging far behind the rest of the country when it comes to de facto couples and financial separations. Within WA there is a growing number of West Australians in a de facto relationship. Under proposed changes to the laws for how superannuation is dealt with in property settlements, separated de facto couples will soon be able to split their superannuation as part of their property division.

Currently in Western Australia, superannuation splitting is only available for married couples. It has not been available for de facto couples in Western Australia. Rather, the superannuation interests of de facto couples are currently considered to be a financial resource which is taken in to consideration during the overall division of the separating party’s assets. In all other Australian state’s superannuation splitting has been permitted as they referred their property division powers to the Commonwealth. All de facto couples who have separated in West Australia have retained their own full benefit entitlement to their respective superannuation in a property settlement.

For many Australians superannuation is considered one of the main assets after the family home. It is believed many women have been disadvantage in property settlements particularly in circumstances where they have been out of the workforce to raise children. The proposed changes will no longer allow for working mothers to be financially disadvantaged if they have been unable to work while raising their family.  In all other Australian state’s, superannuation is treated as any other financial asset in settlement matters.

HOW WILL IT WORK?

The proposed changes will mean that superannuation will be treated as an asset when property is divided. Superannuation can be split by the transfer of a dollar sum from one party’s superannuation fund to the superannuation fund of the other party. However, it is important to note that superannuation cannot be converted in to a cash asset which can be accessed and utilised immediately following transfer. The superannuation which has been split will be subject to the relevant superannuation laws which generally means that funds will be retained until the individual has reached the retirement age.

Once the proposed changes have been implemented superannuation may be split by agreement or by court order. For a superannuation splitting order to be made by agreement the parties must firstly prepare a Form 11 Application for Consent Orders and Minute of Consent Orders stating the split to be made. The draft agreement must be presented to the superannuation fund where the split is going to occur so that it can be approved. Once the sealed orders have been issued by the Family Court these orders can be provided to the superannuation fund to enable the split to occur.

If no agreement between the parties can be reached, the court will decide the property division to be made at a court hearing.

The changes to the law will allow de facto and married West Australian couples to have the same rights when it comes to splitting superannuation, following the breakdown of a relationship. Federal Attorney Christian Porter announced today that the Government will make amendments to the Family Law Act 1975 which will allow superannuation to be split before it has vested. This will mean that separating de facto couples in Western Australia will be treated fairly and consistently with other de facto couples across Australia. The Government will ensure that the necessary legislative amendments are made during 2019, with the super-splitting legislation to come in to effect from early 2020.

We will keep you updated as we know more about the exciting changes to the superannuation splitting law in Western Australia.

Post Written by Sarah Gresham – Joss Legal

Photograph from Images by Carolyn Parker

Leave a Reply