Considering Superannuation
In family law disputes, superannuation would be considered a property and an asset that can be divided between both parties. The Family Law Act 1975 allows the Family Court to consider superannuation when a relationship breakdown occurs. Usually, superannuation can be split through the parties reaching an Agreement or if an agreement cannot be made, then a Court Order can be sought for the superannuation split. The information of the other parties superannuation can be obtained using the Superannuation Information Request Form.
Within the Agreement or Orders, the parties can choose to either split the super balances or place a super payment flag. A superannuation split will involve transferring the agreed or said amount from one party to the other. The transfer can be either a fixed dollar amount or a percentage of the super balance. Usually, the funds will stay in the super environment until either party meets a condition of release which allows them to access their superannuation funds as cash.
A super payment flag can be placed on the account of either party. This would mean that transactions will not be possible on the accounts until the flag is lifted. This allows the parties to defer their decision to a further point in time such as retirement or prevent either party from transferring funds out of the account till the matter is settled especially if they meet a condition of release.
Procedural Fairness and Process
Prior to a court order for a superannuation split, ‘procedural fairness’ must take place. This process involves a letter being provided to the Trustee of the Superannuation Fund which includes details of the proposed Order. The trustee then must be given time to assess the proposed Orders, and this is a legal requirement in the process of the superannuation split. The court cannot make an order for a superannuation split without procedural fairness taking place.
In the letter sent to the trustee for procedural fairness sent by your solicitor, there are a few important details that must be included for the trustee to be in a position to accept the proposed orders. The parties to the family law proceeding should both be outlined clearly on the letter as well as the member number of the account which is being considered for the split. The name of the super fund in question and account details such as the USI and the ABN of the super fund should also be outlined. The base amount or percentage being sought should be included and the trustee would be able to provide a response to the letter. The letter and response from the trustee along with evidence of the value of the account will be sufficient to show that procedural fairness has taken place.
Once the order has been provided, a sealed copy of the Order needs to be provided to the super fund trustee. The transfer will then be made via the super fund by either rolling the funds out from the account or creating a new account within that super fund in the name of the recipient of the funds. If the Court Order includes a super payment flag, it will be placed onto the account that is being restricted.
If you or someone you know wish to discuss this issue further, then please do not hesitate to contact us on 02 8999 9809.