New legislation will help prevent superannuation assets from being hidden during divorce proceedings.
From 1 April 2022, the Australian Taxation Office (ATO) will be able to release details of an individual’s superannuation information
to a family law court.
The recently enacted laws are designed to ensure that there is procedural and economic fairness in divorce proceedings to prevent the
under-reporting of superannuation assets. While a spouse’s superannuation information can be obtained now through legal action, if it is
not provided willingly, it is often expensive and time consuming to obtain factual information through subpoenas or court orders.
From April 2022, when a couple have entered into divorce proceedings, if one of the parties believes the other is not being forthcoming
about the value of assets held in superannuation, they can apply to a family law court registry to request their former partner’s
superannuation information held by the ATO. They will then be able to seek up-to-date superannuation information from their former partner’s
superannuation fund.
What happens to superannuation in a divorce?
In a divorce, superannuation is treated like any other asset and included in the division of assets in a property settlement or financial
agreement. Depending on how the total assets of the couple are split, the superannuation balances of each individual may remain intact
with each party taking their respective entitlement from the asset pool, or split between the couple.
What happens to SMSFs in a divorce?
For self managed superannuation funds (SMSFs), generally an SMSF cannot acquire assets such as residential property from a related party but
there is an exemption when the acquisition is a result of marriage breakdown.
The superannuation divide
On average, women earn 14.2% less than men based on full time earnings. If you take overtime into account, the gap is 16.8%. When
part-time work is taken into account, this figure blows out to 31.3%. And, the COVID-19 pandemic has only worsened the pay gap.
Superannuation equalisation
Where couples have significantly different superannuation account values but are of a similar age, there are practical reasons why they
might look at evening out any gap.
Need help understanding divorce and your superannuation?
Contact our financial planning team confidential and strategic advisory.
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