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When a marriage or a de facto relationship ends the parties will need to achieve property division. Property includes money in the bank, real estate, shares, investments and superannuation. It is usually the case that the parties will each have superannuation entitlements. The division of superannuation entitlements is important in property division.
What is Superannuation?
In Australia people who work will acquire superannuation. They will acquire superannuation if they are employed (whether full-time, part-time or casually provided they earn over $450 per month before tax), as an employer is required by law to pay superannuation on behalf of the employee. Some people have self-managed superannuation funds and some have employer funded superannuation. There will also be some people who do not have superannuation entitlements because they have never worked or have not contracted into a self-managed superannuation fund. Superannuation is a fund of money to which a person becomes entitled at the time they reach a particular age.
Why is this important?
It is often the case that one party has significantly more superannuation entitlement than the other party. This is commonly by reason of the fact that one party might not have worked for as long or left the workforce to have children and raise the children and never returned to work or returned to work later in life.
Any settlement or Court Order needs to achieve an outcome that is a just and equitable outcome in terms of property division. A split of superannuation to achieve that outcome may in fact be required to achieve that outcome.
How can Superannuation be split?
Superannuation can be split by the Court approving an order “splitting” the entitlement of one party to the proceedings and “transferring” the amount split of that superannuation entitlement to the other party. For example, if one party had superannuation entitlements of $400,000 and the other party only an entitlement of $100,000, it would be possible to split off from the larger entitlement an amount of say $150,000 and transfer it to the other party.
The parties seeking to obtain a superannuation split must serve a copy of the proposed Splitting Order on the Trustee for the Super Fund which is being asked to make the split and obtain the approval of that fund before the Order can be made.
Superannuation is only one of the elements to be negotiated in reaching a financial/property settlement and it of itself, does not have to be equal. However it is an element that must be considered.
If you are negotiating a financial/property settlement with your spouse or partner and are unsure as to your entitlements in relation to superannuation please contact Richard Watson Senior Family Law Solicitor or Shereen Da Gloria his assistant to discuss your concerns and ensure your receive what you are legally entitled to in relation to superannuation spilt.
This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 02 9221 6011.
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