Under the Commonwealth legislation governing separating married couples, the Family Law Act 1975 (Cth), when married couples separate superannuation is considered an asset of the relationship and in some circumstances a superannuation splitting order is made. This means that a portion of one party’s superannuation entitlement is split from the overall entitlement and rolled over into the other party’s superannuation entitlement.
The same rules apply as to when a party may access that superannuation entitlement.
Unlike the rest of the Commonwealth, under the Family Court Act 1997 (WA), superannuation entitlements of separating de-facto couples in Western Australia are considered a “financial resource” and are not able to be subject of a superannuation splitting order unless and until their superannuation has vested in them. This means that each party to the de-facto relationship must retain their full superannuation entitlements.
This can create significant difficulties in dividing assets between separating de-facto couples, particularly in circumstances whereby the primary or secondary asset may be the parties’ superannuation entitlements, or where one party ceased paid employment to care for the parties’ children, therefore foregoing the accrual of superannuation for lengthy periods.
However, the good news is that amendments are being made to the laws surrounding de-facto relationship separations and superannuation splitting orders in Western Australia.
Whilst the new laws will not be retrospective (that is, unless both parties consent to the inclusion of their respective superannuation interests in the net asset pool available for division in matters already before the Family Court), the new laws will bring Western Australia into line with the rest of the Commonwealth and provide fairer outcomes, particularly in settlements where there are little other assets and proportionality for women who generally spend more time out of paid employment to raise children.
Call Lotus Legal on (08) 9350 9529 in order to determine your rights and entitlements to a property settlement following the breakdown of your de-facto relationship.