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When it comes to separating, it can be confusing to know and understand whether superannuation is treated as part of the property pool and whether and/or how it is divided in a financial separation.
Superannuation is always considered part of the property pool. This means superannuation values must be disclosed to the other party, whether they are accumulated superannuation funds, defined benefit funds or self-managed superfunds. Disclosure of value does not mean that superannuation is necessarily divided between the parties, it just means that both parties must be informed of the other’s superannuation values and its part in the total property pool, which may also include other assets such as property, shares, bank accounts, cars and so forth as well as any debts. With open disclosure both parties can then assess the property pool and determine how a just and equitable division of the assets and liabilities can be reached.
Superannuation is always considered part of the property pool because it is an asset. At some point in the future the holder will most likely come into a sum of money that will assist them in their lifestyle. Superannuation values can sometimes grow at similar rates where parties have had similar incomes and have spent similar lengths of time in the work force. More often than not however, it is found that one party has more in their fund than the other. Some reasons for this can be that the other party has, 1) worked similar hours but has been on a lower income 2) taken time out of the workforce to care for the parties children or other family 3) taken time out of the workforce to care for their health 4) drawn back on their super to pay for health or contribute to the joint finances 5) lost employment 6) not contributed to superannuation because they have been self-employed, but their whole income has gone to the joint financial benefit of the relationship or family. For some of these reasons it is not unusual to find that one party can have significantly more in their superannuation than the other, sometimes accumulated because of sacrifices the other party has made.
Australian Family Law seeks to ensure that agreements in financial settlement matters are just and equitable, that both parties leave the financial relationship with the ability to move on with their lives and have adequate financial resources with which to do this. For this reason superannuation must be disclosed and considered part of the pool, whether and/or how it is divided is a matter for agreement if you are in a mediation pathway. Seeking the advice of a lawyer with expertise in this area is always a good idea as a first step. Experienced Mediators can assist you and your ex to work through a financial settlement.
If you or someone you know needs help to navigate through financial or family settlement mediation or would like more information, please contact Latoya Percival or Anna Oxford via our website www.xpmediators.com
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