Family Law & Superannuation

FL & Your Super

If you wish to print this fact sheet, please use the PDF Family Law and Your Super (PDF, 370KB).

For an overview of Family Law and your Super select from the links below:

Who should read this?
How does Family Law apply to your super?
Associate A and B Benefits
Who do the new superannuation splitting laws apply to?
Who is not covered by the new superannuation splitting laws?
In what circumstances won't a separate superannuation interest be created?
What are the differences between a court order and a superannuation agreement?
Are there any superannuation interests that can't be split by a court order or superannuation agreement?
What is involved in superannuation splitting?
What happens next?
Frequently asked questions
More information?

It is important that you read the disclaimer at the end of this information sheet.

This information sheet provides an overview only. For more detailed information on how Family Law splitting works in MilitarySuper you should refer to Family Law and Splitting Super - How It's Done and What Happens Next (PDF, 145KB).

Who should read this?

Any Member of MilitarySuper, whether a contributor, pensioner or preserved benefit Member, who
- is in the process of divorcing or separating or
- intends to enter into a superannuation agreement with a person.
A spouse of a MilitarySuper Member, who is in the process of divorcing, or separating from, the Member.
A person who intends to enter into a superannuation agreement with a MilitarySuper Member.

If you have not already done so you should read the info sheet Family law and super - overview.

How does Family Law apply to your super?

From 28 December 2002, changes to the Family Law Act 1975 came into effect. The new legislation allows for superannuation to be split on marriage breakdown either by:

a court order (i.e. an order made by a court exercising Family Law jurisdiction such as the Family Court or the Federal Magistrates Court) or
a superannuation agreement between the parties (i.e. an agreement between the parties that meets the requirements in the Family Law Act).

From 18 May 2004, changes to the legislation governing Military Super came into effect. These changes allow a separate superannuation interest to be created in MilitarySuper for a Member's spouse or former spouse once a valid court order or superannuation agreement has been received. The effect of the legislation is that:

A Member's interest will be split and a separate interest set up in MilitarySuper for the spouse (or former spouse) of the Member, who becomes an associate.
Member and associate interests will accrue separately, or, if the Member is already receiving a pension, be paid separately.
An associate benefit will be payable immediately (if the Member is already receiving a pension) or when the release conditions provided for under MilitarySuper and the Superannuation Industry (Supervision) Act 1993 and associated legislation are satisfied, e.g. when a person has reached preservation age and has left the workforce, or on total and permanent incapacity or on death.

These new laws create a framework for splitting superannuation if required. Splitting is not mandatory, but if a superannuation interest is to be split by agreement or court order, then a separate superannuation interest will be created.

Associate A and B Benefits

As an Associate you will have one or both of the following benefits:

An Associate A - this benefit is “taxed” meaning that it is derived from a source where tax has been paid. This benefit will initially be invested in the MilitarySuper Fund, however, it is portable*.
An Associate B - this benefit is “untaxed” meaning that no tax has already been paid on this benefit. This is because it is drawn from Consolidated Revenue when it becomes payable. This benefit is not portable and cannot be paid until you reach at least 55 years of age.

(* 'portable' - this means that you can transfer the benefit to another complying superannuation Fund)

Investment choice

Your Associate A benefit plus investment returns make up your Associate A benefit. MilitarySuper offers a range of investment strategies in which you can choose how to invest your Associate A benefit. More information on these strategies can be found at Investment Choices.

Who do the superannuation splitting laws apply to?

The new superannuation splitting laws apply to people who:

have been married and have divorced, or are still married but are separated and
make arrangements after 28 December 2002 to settle their property affairs by a court order or a superannuation agreement under the new legislation.

The superannuation splitting laws also apply to people who have entered a superannuation agreement, either before or during a marriage, or after separation, which prescribes how, in the event of marriage breakdown, superannuation interests are to be split.

Who is not covered by the superannuation splitting laws?

The superannuation splitting laws do not apply to persons in a de facto relationship because such relationships are dealt with under State and Territory laws rather than Commonwealth laws.

The superannuation splitting laws also do not apply to persons whose property arrangements have been legally finalised before the new laws came into effect on 28 December 2002, unless the court sets aside an earlier order, and makes a new order under Part VIIIB of the Family Law Act after that date.

In what circumstances won't a separate superannuation interest be created?

The laws do not allow creation of a separate superannuation interest in MilitarySuper where:

a court order or superannuation agreement was made on or after 28 December 2002 but the Member's benefit became payable before 18 May 2004
either party to a court order or superannuation agreement dies before the order or agreement takes effect or
a court order or superannuation agreement does not meet the legal requirements of the scheme - e.g. the proposed amount for the spouse of the Member is greater than the value of the benefit.

In these cases the default arrangements under the Family Law (Superannuation) Regulations 2001 apply.

What are the differences between a court order and a superannuation agreement?

In general, parties can either seek a court order, or enter a superannuation agreement, that specifies how a scheme Member's superannuation interest is to be split.

Court orders

Superannuation benefits may be split where:

the parties agree and they obtain a consent order from the court or
the parties cannot agree and the court decides the matter.

In either situation, the court order is obtained from a court exercising family law jurisdiction as part of a property settlement order. Trustees are bound by a court order that meets legal requirements.

Important note: The legal requirements include providing a copy of the draft order to the Trustees and allowing 28 days for comment. Failure to follow this procedure may result in further court proceedings.

Superannuation agreements

A superannuation agreement can be entered into before marriage, during marriage or after separation.

A superannuation agreement served on the Trustees after a separation or divorce is binding if it complies with the legal requirements of the Family Law Act and has attached:

certificates of independent legal advice for each party and
a copy of either the decree absolute (or divorce order) ending the marriage or a Separation Declaration (PDF, 62KB).

A flagging order or flagging agreement

In some circumstances, parties may feel that they want to wait before seeking a court order or making a superannuation agreement to split superannuation. To prevent the Trustees paying a benefit in the meantime, the splitting laws allow for a flagging order or flagging agreement to be put in place.

Are there any superannuation interests that can't be split by a court order or superannuation agreement?

The following superannuation interests or payments are 'unsplittable':

Any interest that has a withdrawal benefit of less than $5000.
Certain payments made to eligible children after the death of a Member spouse.

What steps are involved in superannuation splitting?

Step 1: Obtaining information about a Member's super.

Step 2: Obtaining a valuation of a Member's super.

Step 3: Seeking a court order (including serving a draft order on the Trustees) or entering a superannuation agreement.

Step 4: Serving the final court order or superannuation agreement on the Trustees.

What happens next?

Step 5: A new record is created for the associate.

Step 6: The Member Benefit is reduced.

Step 7A: Commencing split payment phase benefits to the Member and associate Member (if the Member is already receiving a pension—Another term for a splitting order/agreement. ).

Step 7B:

Keeping separate accounts and reporting (where the Member is a contributor or has a preserved benefit—growth phase).
Paying a benefit to an associate (where the Member is a contributor or has a preserved benefit).

To find out more information go to Family Law and Splitting Super - How It's Done and What Happens Next (PDF, 145KB).

Frequently asked questions

Can I request information for the purpose of a pre-nuptial agreement?

Yes. A Member, or a person planning to marry the Member, may request information for the purposes of entering into a pre-nuptial agreement. The process described in this publication should be followed to seek information and arrange a valuation for a pre-nuptial agreement.

What is my preservation age?

The law places restrictions on when you can access lump sums. One of these restrictions relates to you reaching your ‘ preservation age’ and is in addition to the other restrictions on withdrawing your benefit.

You generally cannot access your entire benefit as a cash lump sum until you reach your preservation age.

Preservation ages
Date of birth	Preservation age
Before 1 July 1960	55
1 July 1960 - 30 June 1961	56
1 July 1961 - 30 June 1962	57
1 July 1962 - 30 June 1963	58
1 July 1963 - 30 June 1964	59
After 30 June 1964	60

Is a lump sum payable to an associate a Superannuation Lump Sum Payment for tax purposes?

Yes. Growth phase lump sums are treated as Superannuation Lump Sum Payments and taxed accordingly.

Is an associate pension subject to Pay As You Go (PAYG) income tax?

Yes. Associate pensions are subject to PAYG

Does the Member spouse still have the responsibility for the payment of any surcharge debt after a family law split?

Yes. For Members whose benefits are in growth phase (i.e. the Member is a contributor or has a deferred benefit), the Member will be responsible. However, this is allowed for as part of the valuation process in calculating how to split the benefit.

For Members in payment phase who have chosen to discharge a surcharge debt by receiving a reduced pension, the associate benefit will be based on the already reduced pension.

Can an associate make contributions to the scheme?

No. The associate cannot make contributions to the scheme.

Can an associate pay money from another superannuation scheme into MilitarySuper?

No. The associate cannot pay in a transfer amount.

Can the Member spouse’s reduced entitlement be split again under another family law split?

Yes. The Member spouse’s reduced entitlement can be split again under another family law court order or superannuation agreement under Part VIIIB of the Family Law Act at some time in the future.

Can the associate’s entitlement also be split under another family law split?

Yes. The associate entitlement can also be split under another family law court order or superannuation agreement under Part VIIIB of the Family Law Act at some time in the future.

What happens when an associate in receipt of an associate pension dies?

If an associate, who is in receipt of an associate pension, dies, there is no residual benefit for dependants. The benefit ends at that time.

More Information

Customer Service Centre

For information about your superannuation entitlement, the payment of your benefit or about any other superannuation related matter, see the Customer Service Centre.

Forms and Fact Sheets

Separation declaration (PDF, 62KB)

Publications

PDFs can be viewed and printed using the FREE Adobe Acrobat Reader.