superannuation is asset you did not know you owned
during a property dispute, you may be surprised to find that superannuation is a significant asset that can be considered during a property settlement after a relationship breakdown.
Superannuation is a forced saving people make towards their post-retirement lives. It is also inaccessible until you leave the workforce at a certain age. It is important to know that, even if your superannuation forms part of your separation settlement, the funds will remain inaccessible until you reach retirement age.
Over the years, the Family Court has made strides in overcoming the practical complications that were once associated with superannuation ownership. Legislation now allows it to be treated as property, which means that a value can be assigned to the superannuation and it can be split between the spouses.
Splitting superannuation involves paying some of the funds into a fund for the other party. That sum still remains inaccessible until the other party qualifies for the payment based on age or retirement. Funds may be added to the superannuation over time, and it can continue to grow.
Upon transfer, the original superannuation amount will be reduced, and each party can determine how and when they want to add funds to the account. Each party will have his or her own financial arrangement, and the accounts will be completely separate.
In the case of a defined benefit, the process is somewhat more complex. This type of fund works in that the amount of superannuation payable is only determined at retirement. It is a multiple of the final salary of the two parties, and is determined by the length of service. This means that nobody really knows what the superannuation will be worth until retirement, and dividing it beforehand could be unfair to one of the parties.
The difficulty in dividing a defined benefit superannuation is overcome by notional division, whereby the value is determined based on the date of retirement, at which point the value of the two accounts is determined.
Same-sex and de facto couples in Western Australia are not allowed to split their superannuations at this point in time. While it is taken into consideration during the overall property settlement, each party retains the superannuation in their own names.
Disclaimer : This article provides basic information only and is not a substitute for a professional or legal advice. It is prudent to obtain legal advice from a family lawyer.