Superannuation is an incredibly important resource upon retirement. If you retire at 60, you may need to live off your super funds for 20-30 years. If you are going through a relationship breakdown, you need to be aware that your former partner may be able to claim an interest in your super, or vice-versa.
The issue of super can be particularly important in long-term relationships where the parties are nearing retirement. The stereotypical example is a 30-year marriage where one party has gone to work every day and the other party has stayed at home as homemaker and parent. When such a relationship ends, the working party is left with a large super entitlement, let’s say $1.5 million, whereas the party who stayed home with the kids is left with next to nothing, let’s say $100,000. How does the Court deal with this situation?
The Court will treat super as property of the relationship, just as it would the family home or money in a regular savings account. The result of this is that the Court can make an order altering the parties’ interest in their super. For example, should the Court decide, based on contributions and future needs, that both parties to the relationship are entitled to 50 per cent of the asset pool, orders can be made to split the working party’s super. By “splitting” the super, a percentage of the working party’s super entitlement can be transferred to the other party’s super account. Using the above example, this would leave both parties with a super entitlement of $800,000 (being the working party’s $1.5 million plus the other party’s $100,000, divided by two).
The Court will consider the value of each parties’ super interest as at the current date, regardless of the date of separation. However, should the parties separate and then wait years to organise a property settlement, a valuation of the super as at the date of separation is usually obtained. In that way, the growth in the super between the date of separation and today can be determined and it can be argued that this increase in value be excluded from the asset pool or at least seen as a contribution of that party, warranting them to receive a greater percentage of the overall super pool. The same can be said of any significant super contributions made prior to the beginning of the relationship.