Who Gets The Superannuation In The Divorce?

Who Gets The Superannuation In The Divorce?


In the event of a divorce, your’s and your partner’s superannuation is one of the assets you may need to take into consideration.

It might be one of the last things on your mind, but it’s important to realise that there are complex laws that can apply, and walking away with it untouched is not always possible.

Superannuation splitting laws, as they are known, allow separating couples to value and divide their superannuation after a relationship’s breakdown.

Under the Family Law Act 1975, superannuation is treated as property. However, it is different from other types of property as it is held in a trust, and so, different super splitting rules are available (unless you are a de facto couple located in Western Australia).

Your ex-spouse is likely to be entitled to receive a portion of your superannuation assets and vice-versa.

The superannuation splitting laws apply to:

  • married (or formerly married) couples who had not finally settled their property arrangements, by a court order under section 79 of the Family Law Act or an agreement approved by a court under section 87 of that Act, before the laws commenced on 28 December 2002,
  • De facto couples, in most States and Territories, whose relationship broke down on or after 1 March 2009 (and South Australian de facto couples, where their relationship broke down on or after 1 July 2010).

The laws do not apply to de facto couples in Western Australia

Super splitting laws offer three options that you and your ex-spouse can take to make a superannuation agreement. This agreement forms part of your ‘binding financial agreement’ and outlines what will happen with the superannuation interest involved.

The options available for dealing with your super in the event of divorce or a relationship breakdown include:

Interest Or Payment Split

A common approach is to have a portion of your super benefits immediately split and paid to your ex-spouse.

This portion can be paid in one of three ways. Provided that you have met a condition of release, the agreed portion can be withdrawn from your super in the form of payment. Otherwise, the creation of a new interest for the non-member is permitted, or payment can be transferred to their super fund.

Payment Flagging

You can choose to flag the interest in your super until a particular event occurs down the track (i.e., retirement). This may be a good option if the value of the interest cannot be determined, and in this way, you and your ex-spouse can wait until the event occurs to determine how you will split the interest involved. By flagging your super, payment cannot be paid until a flag-lifting agreement is signed.

No Split Or Flag

This option requires taking into account the value of the superannuation benefits involved but leaving them untouched while other property assets are divided fairly between the divorcing/separating couple. For instance, your super benefits remain untouched while your ex-spouse receives a larger share of the remaining property assets. No split or flag is also the only option available for de facto couples in Western Australia.

What If You Have A SMSF?

Super splitting laws only become more complicated when it involves a self-managed superannuation fund (SMSF). During your divorce, you will still be required to continue your duties as trustee, including acting in the best interests of all members even if your ex-partner is also a trustee, i.e., not excluding them from the decision-making process. Similar to the above, the approach you take to deal with the super interests involved are dealt with after each party obtains independent legal and financial advice.

Going through a divorce or relationship breakdown is emotionally challenging. Add in financial stress and additional challenges, and it becomes more important than ever to ensure that your superannuation splitting is handled correctly.

You can form an agreement about super-splitting before, during or after the relationship has ended. If you do not have an agreement in place, you can obtain a court order. Regardless, the details involved in super splitting laws are quite tricky to comprehend and to make the best decision independent legal and financial advice for each party must be sought to be legally binding.

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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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