There are a number of things to consider when going through a relationship breakdown, including how superannuation will be divided. In Australia, superannuation is treated as property.
To ensure regulated division of superannuation payments upon the break down of a marriage or a de facto relationship superannuation splitting is provided for in the Family Law Act 1975.
The Australia Family Law Courts explain that couples can value and split superannuation payments if they want to include this as part of their separation proceedings.
These laws were enacted in 2002 and can be enforced in two ways - a court order or a superannuation agreement between the two parties. This agreement is essentially a financial agreement about how the superannuation of either party will be divided in the future.
What is superannuation splitting?
This is also referred to as payment splitting. Basically, payment splitting occurs when a payment is ready for the person whose superannuation it is. The superannuation agreement or court order will outline what portion of the payment is to be made to the other partner and the remaining amount will go to the member spouse.
The Family Law (Superannuation) Regulations 2001 includes provisions for how superannuation interests are valued, how payment splits are to be carried out and what information needs to be provided by the trustees.
There are some superannuation interests that are considered unsplittable interests. This may be the case if the amount of the superannuation is so small that it is not cost effective to divide it. In the superannuation regulations this is stipulated as a superannuation that is receiving less than $2,000 a year from annuity or a non-commutable pension and/or has a withdrawal benefit of no more than $5,000.
In order to split the superannuation between the couple it will need to be valued according to the legislation, the couple will either need to come to a formal agreement or obtain a court order and the superannuation fund should be informed.
If you are concerned about how your superannuation will be split in the case of a relationship, a superannuation agreement can be written before or during the relationship.
A divorce lawyer can talk you through superannuation splitting or dividing property following a relationship breakdown.