Separation or divorce can be a stressful and difficult time. As well as the emotional impact, there’s every chance it may have a financial impact.

Here we talk briefly about how separation and divorce can affect superannuation.

What are you entitled to in a divorce or separation in Australia?

A separation or divorce usually requires assets to be divided between two people. Cash and cash-type assets, valuables, other physical assets, the family home and any investment properties are often included. Super can also be included.

A financial stock take can be a good start. List and value your assets. Include your home, car, furniture, super, investments and joint debts.

Super is property

Superannuation is treated as property under the Family Law Act 1975 but differs from other types of property, because it's held in a trust.

It is added to a separating couple’s combined asset pool considered in the property settlement, regardless of whether it is immediately accessible as cash.

What happens to super in a divorce or separation?

Superannuation splitting laws let separating couples value and split their superannuation, although this is not mandatory.

An important first step is to work out how much super in total is available to split.

Both partners have a legal right to request information about the other’s super account.

Information can also be applied for directly through the Family Court – the Family Court has a superannuation information kit that provides information on this process.

Some – but not all – super funds may charge a fee for providing this type of information (Vanguard Super does not).

Options for splitting super assets

A separating or divorcing couple may decide that super will not form part of the pool of assets to be split.

However, if super does form part of the pool of assets, it usually has to stay in the super system and cannot be accessed until a condition of release is met.

How long after divorce can you claim superannuation?

The timing for claiming superannuation after a divorce depends on your marital status. For married couples, claims must be made within 12 months after the divorce is finalised. De facto relationships have a timeframe of up to two years from the date of separation to make their claims.

These periods can be extended under special circumstances if a court order is obtained.

Tax consequences of splitting super in a divorce

Superannuation splits due to divorce are generally exempt from tax at the time of transfer. However, when the non-member spouse eventually withdraws the super, it will be taxed according to superannuation withdrawal rules, just as if it were their own super.

Some helpful resources to help you navigate divorce or separation

Thankfully, there are several good resources that can support people through the process.

ASIC’s MoneySmart website is a good place to start and provides a number of tips and videos to help people manage money on their own (instead of as a couple).

Services Australia provides a range of information and assistance, including how to manage child support and spousal support.

amica is an online service, designed to be a straightforward and affordable do-it-yourself solution for couples to create formal documents addressing parenting, property and money matters when they separate. amica was developed by National Legal Aid, which represents the directors of the eight state and territory legal aid commissions in Australia.

Super and divorce (or relationship breakdown)