When a couple separates or divorces, a part of the property settlement process includes the division of superannuation. Unlike other assets such as property or savings accounts, superannuation is a future financial resource, subject to specific laws and often held in trust. However, it is still considered property under the Family Law Act 1975 (the Act), and therefore, it can be split between parties as part of a property settlement.
In this blog, we’ll break down the rules, processes, and key considerations around splitting superannuation in divorce in Australia.
What is superannuation?
Superannuation is a long-term savings plan designed to provide income in retirement. In Australia, employers are required by law to pay a percentage of an employee’s earnings into a superannuation fund.
While superannuation is not accessible until retirement (usually age 60 or later), it’s still considered part of the matrimonial asset pool and is subject to division during separation or divorce.
Superannuation as "Property"
Under Australian family law, superannuation is treated differently from other property due to its preserved nature—it can’t be withdrawn or cashed out (except in very limited circumstances). Still, it’s classified as property under Section 79 of the Act, and can be either:
1. Split between the parties via a superannuation agreement or court order, or
2. Left untouched, but its value taken into account when dividing other assets.
Methods of splitting superannuation
There are two main ways superannuation can be dealt with in a divorce:
1. Superannuation Splitting Order
This is a legal document that sets out how one partner’s super will be split and transferred to the other. It can be done through:
- Consent orders (if both parties agree), or
- Court orders (if the parties go to court).
The split does not involve withdrawing the money form the super fund. Instead, the entitlement is transferred into the receiving party’s own super fund.
2. Superannuation Agreement
Couples can make a binding financial agreement before, during, or after the relationship that includes how super will be handled upon separation. This agreement must comply with strict legal requirements, including both parties obtaining independent legal advice.
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The process of splitting superannuation
Here’s a step-by-step overview of how super is typically split in a divorce:
Step 1: Valuing the Superannuation
Valuation is a crucial step. Most accumulation-type super funds (the most common type) are relatively straightforward—the balance shown in the statement is usually accepted as its value. However, defined benefit or public sector funds (like PSS or MilitarySuper) can be more complex to assess and may require an actuarial valuation.
You can apply to the super fund for information using a Form 6 Declaration submitted to the relevant super fund and Superannuation Information Request Form submitted with the Federal Circuit and Family Court of Australia.
Step 2: Disclosure
Each party must fully disclose their superannuation interests, just like any other asset. This includes providing up-to-date superannuation statements and account balances.
Step 3: Agreement or Court Decision
Once the values are known, the parties can negotiate how super will be divided. This can be done:
- By mutual agreement, formalised in Consent Orders submitted to the Family Court or a Superannuation Agreement, or
- If agreement isn’t possible, by applying to the court for financial orders.
Courts consider a variety of factors (discussed below) before making a superannuation split order.
Step 4: Implementing the Split
Before the Court can make super-splitting orders, the Court must be satisfied that the super fund has been afforded procedural fairness. Procedural fairness is obtained by writing to the relevant super fund and outlining the proposed super-splitting orders that the parties are requesting the Court make. The super fund will then respond in writing to confirm if they consent to the making of the super-splitting orders as drafted, or if amendments are required to enable the super fund to comply with the super-splitting orders. A copy of the letter from the super fund providing their consent to the super-splitting orders being made is submitted to the Court as evidence that procedural fairness has been afforded to the super fund.
Once the court or agreement formalises the split, the relevant super fund is notified and provided with a certified copy of the sealed Orders or signed Agreement. The fund will then transfer the allocated amount into the other party’s super account in compliance with the super split.
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Factors courts consider
When making a decision on how to split superannuation, courts apply the same four-step process used for property settlements:
1. Identify and value the property pool (including superannuation).
2. Assess the contributions of each party—financial (income, assets brought into the relationship) and non-financial (raising children, homemaking).
3. Evaluate future needs—like age, health, earning capacity, and responsibility for children.
4. Consider whether the proposed division is just and equitable.
It's worth noting that in shorter relationships, courts may be more likely to leave superannuation in each party’s name, especially if they made roughly equal contributions. In longer relationships, the Courts in Victoria will generally equalise the parties superannuation entitlements.
Common approaches to super splitting
- Percentage Split: For example, one partner receives 50% of the other’s super balance.
- Base Amount Split: A specific dollar amount is transferred.
- Offsetting: One party keeps more of the super while the other retains a larger share of other assets (e.g., the family home).
Offsetting may be suitable when one partner is close to retirement and the other needs immediate access to cash, as super remains inaccessible until preservation age.
What about De Facto relationships?
The rules for de facto couples are mostly the same as those for married couples in Australia. Since 2009, de facto relationships are covered under the Act. Section 4AA of the Act defines a de facto relationship and includes, but is not limited to, the following:
- The relationship lasted at least two years, or
- There is a child of the relationship, or
- Significant contributions were made by one party; or
- Three is an intermingling of finances.
Tax and financial considerations
Superannuation splitting doesn’t usually trigger immediate tax consequences, however, the receiving party must still wait until reaching the preservation age to access it.
If you’re negotiating a settlement, it’s wise to involve a financial advisor or family lawyer to ensure long-term implications are understood—particularly in terms of retirement planning, Centrelink eligibility, and taxation.
Time limits
There are time limits to when parties must finalise their financial settlement or bring a property application to Court. These include:
- Married couples must apply to court within 12 months of the divorce becoming final.
- De facto couples must apply within 2 years of the date of separation.
Extensions can be granted, but only in exceptional circumstances, so it’s important not to delay seeking legal advice.
Summary
Dividing superannuation in divorce is a nuanced process governed by family law. While it can’t be immediately accessed, it remains an important part of the property pool and is often one of the largest financial assets after the family home.
Whether you're negotiating directly with your ex-partner or going through the courts, it’s crucial to:
- Fully value and disclose all super interests,
- Consider the long-term impact of how it’s split,
- Seek legal and financial advice to protect your future.
Understanding how superannuation works in the context of divorce can help you make informed decisions and achieve a fair outcome—today and well into retirement.
Disclaimer: This blog is for informational purposes only and does not constitute legal advice. For advice specific to your situation, consult a qualified family lawyer or financial advisor.
