Superannuation is property under the Family Law Act 1975 (Cth). When a marriage or de facto relationship breaks down in Australia, super can be divided between the parties — just like a bank account or investment property. Understanding how super splitting works is important, because super is often one of the largest assets in a separation, particularly for older Australians.
This article provides general legal information only. Family law matters are complex and outcomes depend on individual circumstances. You should seek independent legal advice from a family lawyer before making any decisions about your super in a separation.
Super Is Property — But It’s Different
While super is property for the purposes of family law, it is not the same as ordinary financial assets in two important ways:
It cannot be paid out as cash in most circumstances — super must be transferred from one person’s fund to the other person’s super fund (a “rollover”). It cannot be cashed out unless the recipient has met a condition of release.
The amount transferred remains subject to super preservation rules — the receiving party cannot access the transferred amount until they themselves meet a condition of release (e.g. reach preservation age and retire).
How Super Is Split — The Four Mechanisms
The Family Law Act provides four ways super can be dealt with in a separation:
1. Superannuation Agreement (Financial Agreement)
Parties can agree to split or not split super as part of a binding financial agreement (sometimes called a “prenup” if entered before marriage, or a financial agreement during or after marriage). These agreements must be in writing and comply with strict legal requirements — both parties need independent legal advice.
2. Superannuation Splitting Order (Court Order)
A court can make a superannuation splitting order — also called a payment split — that directs a super fund to split a member’s super interest. The split is calculated as either a percentage of the member’s interest, or a specific dollar amount (called a “base amount”).
- Percentage split: e.g. the non-member spouse receives 40% of the member spouse’s super interest
- Base amount split: e.g. the non-member spouse receives $150,000 from the member spouse’s account
The split must comply with the Superannuation Industry (Supervision) Act 1993 and the fund’s own rules.
3. Superannuation Flagging Order
A flagging order freezes the super interest — preventing any payments from the fund until the flag is lifted. It is used where:
- Valuation of the super interest is complex (e.g. a defined benefit fund)
- The parties want to defer the split decision while other assets are resolved
Once a flag is lifted, a payment split can then be made.
4. Setting Off Super Against Other Assets
Rather than splitting the super directly, one party may receive a larger share of other assets (e.g. a larger share of the family home or savings) in exchange for the other party retaining their entire super balance. This “set off” approach is common when one party’s super is preserved and the other needs liquid assets now.
The Process — How It Works in Practice
Step 1 — Obtain the super balance value
Both parties need accurate valuations of each other’s super interests. You can request this from the fund directly. For accumulation funds, the balance is straightforward. For defined benefit funds, the fund will need to provide an actuarial valuation.
To obtain information about your spouse’s super, you (or your lawyer) can use the Family Law Superannuation Information Kit — a formal request mechanism that requires funds to disclose member information in family law proceedings. Funds are legally required to respond.
Step 2 — Agree on the split (or go to court)
The parties (ideally with their lawyers and financial advisers) negotiate whether to split super and on what terms. A consent order can then be lodged with the Federal Circuit and Family Court of Australia (FCFCOA) for approval. If parties cannot agree, the court decides.
Step 3 — Serve the splitting order on the fund
Once a splitting order is made, it must be served on the super fund. The fund then implements the split — creating a new account (or rolling the split amount to another fund) for the non-member spouse.
Step 4 — The non-member spouse’s account
The amount received from the split sits in a new super account in the non-member spouse’s name. They cannot access it until they meet a condition of release. It will be invested and grow (or fall) with the fund until then.
De Facto Relationships
The same Family Law Act rules that apply to married couples generally also apply to de facto couples (including same-sex couples) in all states and territories, subject to eligibility criteria:
- The de facto relationship must have lasted at least 2 years, or there must be a child of the relationship, or one party must have made substantial contributions
- Applications must generally be made within 2 years of separation
SMSFs and Separation
SMSF splitting is more complex:
- If both spouses are members and trustees of the same SMSF, one party must resign as trustee and member — they cannot remain in the fund together after separation
- The exiting party’s interest can be rolled over to a different fund
- An SMSF audit and updated trust deed may be required
Given the complexity, SMSF advice from a specialist SMSF adviser and family lawyer is strongly recommended.
Tax on Super Splits
Super splits in a family law context are not a taxable event — the transfer from one person’s super account to the other’s does not trigger contributions tax or income tax on either party. The split is treated as a rollover for tax purposes.
However, the components of the split interest (tax-free and taxable) carry over to the receiving party — which can have implications for future withdrawals and estate planning.
Frequently Asked Questions
Can my ex-partner get half of all my super? There is no automatic entitlement to half of each other’s super. Super splitting in family law is a negotiated or court-determined outcome, considering all assets and circumstances of the relationship. Super may be split unevenly, set off against other assets, or not split at all.
What if my ex is hiding their super? You can formally request super information through the Family Law Superannuation Information Kit mechanism — funds are legally required to respond. A lawyer can assist with this process.
Can I access a super split before I retire? No — the received super amount remains subject to normal preservation rules. The non-member spouse cannot access the split amount until they meet their own condition of release (reach preservation age and retire, etc.).
What happens if my ex dies before the split is implemented? This is a complex area — outcomes depend on whether a splitting order has been made, whether the death was before or after separation, and the fund’s rules. A family lawyer should be consulted urgently if this situation arises.
This article provides general information only. For advice specific to your situation, speak with a family lawyer accredited in family law and, separately, a licensed financial adviser. MoneySmart’s divorce and money guide has further information.
See also: Super and Life Events.