What happens to super during a divorce?

Couple breaking up

Divorce or separation can be extremely difficult. On top of the emotional stress, it’s often quite overwhelming to keep track of everything. Dividing assets after a separation can be challenging, even in the most amicable separations. However, planning for your future remains more important than ever, and that includes managing your super.

The end of a relationship doesn’t have to mean the end of your financial plans. It might take some time to adjust to your situation, but there are a few important things you can do to stay on track.

Claire, our Financial Best Friend - FBF, recently caught up with Linda about what she is doing to continue to plan for her future after a recent separation.

Claire: Thanks for taking the time to talk to me today, I appreciate any breakup is never easy. However, I think sharing your story may be helpful for some of my GuildSuper friends.

Linda: Your welcome, happy to share my experience.

Claire: I appreciate that every divorce or separation is different, and each comes with their own set of challenges.

Linda: Exactly, but universally I think it is important to remember to be kind to yourself and never hesitate to ask for help. You’ll need to do a lot of short-term and long-term planning during a time that will often be emotionally draining. Divorce and separation are difficult, life-changing events. Surround yourself with supportive friends and family, make a plan for your future and never hesitate to ask for help.

Claire: What was it important to do first?

Linda: First up get on top of your finances. It is really important to assess your financial situation. Take the time to understand all of your finances and debts, including managing your super.

Find out your former partner's super balance. This may help give yourself a sense of what may be agreed on as a fair settlement. You’re entitled to ask your former partner’s super fund to provide this.

Essentially, super is considered as property in the event of a relationship breakdown, so like any other asset it can be divided between partners by agreement or court order (if it comes to that).

Claire: Did you seek advice?

Linda: I had a great support network of friends and professionals. The GuildSuper team were great and really helpful.

Claire: Did you get legal help?

Linda: Yes, begin by seeking legal help. The rules relating to dividing superannuation assets in the event of a relationship breakdown are complex, so even if the split is amicable, you should consider meeting with a family lawyer to ensure you’re complying with the relevant super laws and to protect your fair share of super.

For example, GuildSuper cannot split a separating couple’s super (see below) unless they receive confirmation of this - or an order from the court.

Claire: When it came to your super what options did you look at?

Generally speaking, there are three options when deciding what happens to your superannuation benefits at the time of a divorce or separation:

  1. Split the super. If you separate or become divorced, you and your ex-partner may split your or their super by agreement, or by court order – the same way as many other assets.
  2. Defer your decision until another time, such as retirement. A couple can choose to wait for an event (such as retirement) to occur before dealing with the super account by making a flagging agreement, which prevents the super fund from making a payment out of the superannuation account until the flag is lifted. This approach is not often used, but might be appropriate if you or your ex-spouse are in a defined benefit account, where it is more difficult to determine the value of the superannuation.
  3. Take super into account but leave untouched. A couple may choose to divide their other assets while considering the value of their super accounts but can decide to leave their superannuation benefits as they are. De facto couples in Western Australia may choose to take this approach, as their super cannot be split.

Claire: Do you know what’s the most common approach?

Linda: Splitting super is the most common approach for managing super during a divorce or separation. Super can be one of the most valuable assets you accumulate in your lifetime. And like other assets - such as the family home, valuables and investments - many couples choose to split their super during the process of separation or divorce. You can read more about super splitting on this government website.

Typically splitting super follows these steps:

  • Calculate the total value of superannuation. You need to know how much is in your ex-spouse’s super account(s). You are entitled to ask their fund(s) for this information. You will need to fill out a form from the Family Court of Australia website.
  • Seek legal advice and reach an agreement, or if you can’t agree, then apply for a court order. Many things may be taken into account when determining how super will be split, for example, non-financial contributions to the relationship such as taking care of children. A court may also consider the financial position each of you will be in after the divorce or separation.

Claire: What happens when a decision is reached?

Linda: Once a valid agreement has been made, or a court order is in place, you’re able to submit your super splitting request. Send a copy of the agreement or order to the super fund(s).

Linda’s top tips

It’s important to remember that the preservation rules still apply after a split.

Some people think that when they get a portion of their former partners super, they will be able to access it immediately and do with it what they please.

This is usually not the case. Much, if not all, of the super that comes to you as part of the split will still be preserved.   

To help, the Australian Government’s MoneySmart website provides a detailed checklist that you can use to keep track of money during a divorce or separation.

Canstar has this useful article How are assets divided in a divorce?

Don’t forget you can always call one of GuildSuper’s super friendly team members on 1300 361 477.