Superannuation - its division upon financial separation

Superannuation is always considered part of the property pool (see previous post). This means superannuation values must be disclosed to the other party when working through a financial settlement. However, whether all, some or none of the superannuation is to be divided or not can be dependent on several factors, some of these include the following:

• How much superannuation if any was brought into the relationship

• How long the relationship has been

• Whether there are children from the relationship

• The incomes of the parties during the relationship

• The future income earning capacity of the parties to the relationship

• The future financial needs of the parties - including health needs

• Ages of the parties and their proximity to retirement

• What other financial resources the parties may have

We have established super needs to be divided - but a super division does not work for our needs - what can we do?

Whilst superannuation must be disclosed and "considered" in the pool it does not necessarily mean it has to be divided, so long as the "total pool of assets and liabilities including superannuation" can be shown to have been divided "justly and equitably" and parties are in agreement. A couple of brief scenarios can explain this:

Scenario One: Mary and John are financially separating. John has considerable superannuation, Mary has very little in her fund. They also have a property which they will sell. For Mary it is important to buy another small property without a mortgage. A super transfer from John will need to go to Mary's super account which Mary can not access for another 15 years and the "cash" share Mary will receive from the sale of the property will not yield enough to buy another property out right. Mary and John have agreed that instead of Mary receiving superannuation from John's account, Mary will receive a greater share of the proceeds of sale from the joint property, John will receive less of the cash share but retain his super account (there will be no super division) - they have done all other calculations and been advised they have reached a just and equitable division of the property pool.

Scenario Two: Steve and Tracey have sold their family home and decided on a 50/50 division of all assets and liabilities. They both have the same amount in their superannuation accounts and their cars are of similar value, however Tracey also has a share portfolio in her sole name valued at $50,000, which she would like to retain. They have therefore agreed that Tracey will keep the share portfolio and will transfer $25,000 from her superannuation account to Steve to reach a 50/50 on their total property pool. They have both had legal advice and been advised that this is a just and equitable division of the property pool.

Experienced Mediators always recommends that you obtain legal advice before entering any financial settlement matter agreement. Experienced Mediators can assist you with helping you reach agreement (mediation) on your financial settlement matter

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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