Family Law Act
Splitting of Superannuation Benefits upon marriage breakdown:
Changes to the Family Law Act, effective from 28th December 2002, will mean that in the event of a marriage breakdown, your Superannuation interest may be split between you and your ex-spouse.
Amendments to the Family Law Act will only apply to married couples and will not apply to de facto or same sex relationships. Where an eligible person informs the Trustee that they need information to properly negotiate a superannuation agreement with you or to assist in connection with the new rules, the Trustee is required to provide the information and cannot tell you about the enquiry.
Ways this change may effect your superannuation:
* Benefits can be split, however, benefits less than $5,000 cannot be split. Salary continuance benefits generally cannot be split;
* You and your spouse or ex-spouse can make a superannuation agreement, before or during marriage or after marriage breakdown. However, in the absence of an agreement, the Family Court will make its own order;
* A "flag" on your superannuation benefits will preclude you from cashing, transferring or rolling over benefits in your account while it is in place. A "flag" can be removed by agreement with your ex-spouse or by an order from the Family Court;
* Splitting of benefits may result in your ex-spouse being entitled to all or part of your benefits or to a new account in the Fund or another superannuation fund, Approved Deposit Fund or Retirement Savings Account over which you will not have any rights or be able to make decisions.
Family Law expenses will be deducted from your account to cover the costs of implementing agreements, orders and other steps the Trustee is required to take. In addition, where the Trustee incurs legal expenses in responding to matters arising from "flagging" or splitting your benefits, these expenses will also be deducted from your account.
The new laws are complex and members and their spouses should each seek independent legal advice in the event of a marriage breakdown.