Family Law · Additional Resources

Major changes to the treatment of superannuation in family law property settlements became effective from the 28th December 2002. As a result of these changes, the Courts now must treat superannuation as property in the same way as any other asset. Typically, the Court will have the power to make:-

Alternatively, married couples can agree to split or flag superannuation benefits by making a superannuation agreement.

Splitting Orders

A Court can order the splitting of a member’s superannuation benefit and to do this the Court will:-

The valuation of the superannuation benefit depends on the type of interest (for example accumulation or defined benefit) if in the growth and the payment phase (eg allocated pension).

Married couples can also have splitting agreements rather than Court Orders to split a superannuation interest. Note that a superannuation interest of a member with a benefit of less than $5,000.00 cannot be split.

Flagging Orders

Flagging Orders prohibit the trustee of a superannuation fund from making payments from the affected account until the Order is lifted. These types of Orders will most likely be used when the member is near retirement and the superannuation is about to be released or, to freeze this asset where there is a suspicion the member may remove monies from the fund. Married couples can also agree to flag the superannuation interest thereby avoiding the need for Court proceedings.

Note that a superannuation interest that is in the payment phase (such as an allocated pension) cannot be flagged and pension payments can continue to be made until a payment split is done.

Our Service to You

Grant & Simpson have experts in family law. We also have experts in financial planning through our links with Winchcombe Carson Financial Planning Pty Ltd. Our authorised representative here in Rockhampton for Winchcombe Carson Financial Planning Pty Ltd is John Siganto who is a qualified lawyer as well as a financial planner. As a result, we can provide comprehensive advice in relation to these matters under the one roof. Matters that could need consideration are as follows:-

Taxation Considerations

Matters that need to be considered are:-

Preservation Rules

Generally, benefits consist of amounts described as “unrestricted non-preserved”, “restricted non-preserved” and “preserved” entitlements. When a payment split is made it is done so on the basis that the benefits are described on a pro-rata basis as ““unrestricted non-preserved”, “restricted non-preserved” and “preserved” entitlements. Until a condition of release has been met by the non-member spouse all “preserved” benefits must remain in a superannuation fund.

Important Issues

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