Hiding superannuation no more…

Superannuation is likely to be your largest financial asset and is likely to be your largest asset second only to your property.1 On average, a household has $213,700 in superannuation funds and comprises 18% of all household assets.2

For almost twenty years, superannuation has been treated as property for family law purposes. This means that when a married or de-facto couple is separating, they can split superannuation by agreement or by court order. Even if there is no superannuation split, it is important that each party knows the size of the superannuation interest so that it can be accounted for in the property pool.

Ordinarily, when parties separate, they have a duty of disclosure to provide to the other party all information relevant to an issue in the case. This includes information about their income, properties that the person may own, cars, investments and their superannuation accounts.

Yet, unlike real property or physical assets, superannuation funds and accounts may be hidden by a partner who refuses to comply with their disclosure obligations. With 26% of Australians having more than one superannuation account,3 determining whether your former partner has additional superannuation accounts and identifying the value of those accounts can be legally complex and time-consuming. The Women’s Legal Service Victoria (WLSV), in their 2018 report Claims, Large Battles, have reported on the difficulties involved in determining whether a former partner is hiding superannuation assets. WLSV report that two-thirds of women they assisted through their small-claims project experienced non-disclosure of superannuation assets and that the processes for determining the existence of any superannuation accounts often involves significant guesswork and delay. In many cases, finding the superannuation account and balance can cost more than the split is worth. From 1 April 2022, a new law (the Treasury Laws Amendment (2021 Measures No. 6) Bill 2021) will empower separating parties to find their former spouses’ superannuation accounts and balances. The law will enable a Senior Registrar of the Federal Circuit and Family Court of Australia (FCFCOA) to request that the Australian Taxation Office release the ‘superannuation information’ to the requesting spouse.

The ‘superannuation information’ will identify each superannuation fund registered to the spouse, the value in those superannuation funds at the last reporting date, and any monies owed to those funds. This will make it much harder for former spouses to hide their assets.

This reform will reduce time spent in court and legal fees for all parties and have particular benefits for women. Not only do women generally have less significant superannuation balances than men,4 the WLSV noted that in 21% of their small-claims cases, superannuation was the only significant asset.5

This reform will provide for fairer adjustments in the property pool and enable parties to rebuild their financial independence after separation.

To find out how Parker Coles Curtis can help you, visit parkercolescurtis.com.au or call 5114 2660.

Photo credit: fatherly . com

1 Household Income and Wealth, Australia, 2017-18 financial year | Australian Bureau of Statistics (abs.gov.au) 2 Household Income and Wealth, Australia, 2017-18 financial year | Australian Bureau of Statistics (abs.gov.au) 3 Super data: multiple accounts, lost and unclaimed super | Australian Taxation Office (ato.gov.au) 4 1710_Superannuation_account_balances_by_age_and_gender (1).pdf 5 Small-Claims-Large-Battles-Report.pdf (womenslegal.org.au)