Do I have to share my superannuation?
Property settlement: Superannuation
One of the most common questions asked by people in de facto and marriage relationships is, “do I have to share my superannuation?”
There is no straight answer to this, so it’s important to seek legal advice from a family lawyer.
Both parties’ superannuation interests are considered to be a financial resource, and are taken into account in a property settlement. The following case study helps to explain how superannuation is treated in property settlement negotiations.
David and Lisa’s primary asset is a house valued at approximately $400,000 with a mortgage of $150,000.
David has been the primary earner during the relationship, and at separation has a QSuper fund with a balance of approximately $200,000. He currently has a salary of $80,000.
Lisa has been the primary carer of the two children of the relationship, and works part-time. She has a Hesta superannuation interest of approximately $15,000. She currently earns $25,000.
When considering the terms of a property settlement, the usual method calculates that David and Lisa have a net property pool of $465,000 – this is made up of a non-superannuation pool of $250,000 (the value of the house, minus the mortgage owing), and total superannuation interests of $215,000.
The next steps are to consider each party’s:
- financial and non-financial contributions to the relationship
- contributions as a homemaker and parent
- future needs, reviewing factors such as age, income, health, and percentage of care of the children.
This determines an overall percentage of the net property pool that each party may be entitled to, to provide a just and equitable settlement.
If it is agreed that Lisa will retain 60% of the property pool, and David will retain 40% of the property pool, the parties then need to determine what will comprise each party’s percentage of the overall net property pool.
If the parties agreed to sell the home, after paying out the mortgage loan they would have net sale proceeds of approximately $250,000.
David will probably want to retain some cash to set himself up, so he may agree to give Lisa some of his QSuper interest through a “splitting order” to make up her 60% of the pool.
The property division for Lisa and David ends up looking like this:
|Lisa:||Cash from sale of house||$200,000|
|Split of David’s super||$64,000|
|David:||Cash from sale of house||$50,000|
|Balance of his super||$136,000|
As the case study shows, how each person’s superannuation is treated depends on the circumstances of the case.
If you want to share the money in a super account, you need to get a superannuation splitting order from the court, which requires the consent of the trustee of the superannuation fund. You must give the trustee 28 days to consider the terms of the superannuation splitting order.
When filing consent orders, in addition to giving the court a copy of the written consent of the trustee, you must also provide the court with evidence of the current value of the superannuation fund.
Contact our family lawyers in Cairns for more information on superannuation and property settlements.