Superannuation Splitting in Family Law (Melbourne): A Plain-English Guide for Separating Couples

1. What Is Superannuation Splitting?

Superannuation splitting is the process of dividing superannuation interests between separating spouses or de facto partners as part of a family law property settlement.

A key point that surprises many people is this:

• Superannuation is treated as property in family law, even though it is usually not money that can be accessed immediately.

• A “split” is generally a transfer of an amount or percentage from one person’s super account to the other person’s super account (or a new account created for them).

Superannuation splitting can be agreed privately and formalised, or ordered by the Court.

2. Is Super Automatically Split 50/50 After Separation?

No. There is no automatic 50/50 rule.

In the Federal Circuit and Family Court of Australia (FCFCOA), superannuation is considered as part of the overall property pool, along with assets such as:

• the home and other real estate

• bank accounts and investments

• cars and personal assets

• businesses and trusts (where relevant)

• debts and liabilities

• superannuation

The final outcome depends on the circumstances of the relationship, including contributions and future needs factors.

3. Who Can Apply for a Superannuation Split?

Super splitting can apply to:

• married couples, and

• de facto couples (including same-sex couples),

provided the relationship meets the relevant criteria and the Court has jurisdiction.

In practice, super splitting is usually dealt with:

• at the same time as the broader property settlement; and/or

• when a settlement is being documented by Consent Orders or a Binding Financial Agreement.

4. How Does Superannuation Splitting Work (Step-by-Step)?

4.1 Identify the super funds and the type of interest

Each party should identify:

• the name of each super fund (industry, retail, public sector, SMSF);

• the member number; and

• whether there are multiple super accounts.

Different super interests can be treated differently (for example, an accumulation fund compared with certain defined benefit interests).

4.2 Obtain the information (valuations and statements)

For negotiations, parties generally exchange:

• recent member statements;

• balances as at separation (sometimes relevant); and

• where required, a formal valuation approach (particularly for complex interests).

Some types of super (especially defined benefit schemes) can require more detailed information to determine a split.

4.3 Decide the split method: percentage or fixed amount

Most super splits are structured as either:

• a percentage split (e.g., 40% of the super interest), or

• a base amount split (a fixed dollar amount).

The best approach depends on factors such as:

1. whether the fund value is changing rapidly;

2. timing of the orders; and

3. the type of super interest.

4.4 Formalise the agreement (or obtain Court orders)

Super splits must be documented correctly to be effective. This is typically done through:

• Consent Orders filed in the FCFCOA; or

• a Binding Financial Agreement (BFA) that complies with the legislation; or

• orders made by the Court after a contested hearing.

4.5 Serve the orders on the super fund and implementation

Most funds require:

• service of sealed orders; and

• specific forms or identification documents.

Once processed, the split amount is usually moved into:

• the non-member spouse’s existing super fund; or

• a new super account in their name.

5. Will Super Be Paid Out in Cash?

Usually, no.

In most cases:

• super stays in the super system; and

• the recipient cannot access it until they meet a condition of release (such as retirement age, permanent incapacity, etc.).

This is one of the most important concepts for clients: super splitting changes who owns the super, not when it can be accessed.

6. What About Self-Managed Super Funds (SMSFs)?

SMSFs can be more complicated because the “fund” is effectively controlled by the members/trustees.

SMSF splits may raise additional issues such as:

• the SMSF trust deed rules and compliance obligations;

• whether one party needs to roll out their super to avoid ongoing connection;

• liquidity (whether the fund has enough cash to implement the split); and

• tax and accounting considerations for asset transfers within the fund.

Where an SMSF is involved, specialist input is often required to ensure the settlement is practical and compliant.

7. Do We Have to Split Super?

Not always.

Some couples decide not to split super if:

• the non-super assets are adjusted instead (for example, one party keeps more of the house equity and the other keeps their super); or

• super balances are similar and a split adds cost without benefit.

However, super is frequently a significant asset—particularly where:

• there has been a long relationship;

• one person had time out of the workforce caring for children; or

• there is a large difference in retirement savings.

A super split can be an important way to achieve a fair overall outcome.

8. Common Mistakes to Avoid

8.1 Assuming super is “not real property” because it can’t be accessed

Even though it’s preserved, super can be one of the biggest assets in the property pool.

8.2 Not getting accurate fund information early

Negotiations can stall if account details, balances, and fund types are unclear.

8.3 Using the wrong wording in orders

Super funds require orders to be drafted precisely. If orders are incorrect, the fund may reject them, causing delay and extra cost.

8.4 Forgetting there may be multiple accounts

Many people have “lost” super from old employers. It is important to identify all super interests.

8.5 Not thinking about long-term outcomes

A settlement that looks fair today may produce very different results at retirement if super balances are not considered carefully.

9. Frequently Asked Questions

“How long after separation can super be split?”

Super splitting is usually dealt with as part of property settlement timeframes. Strict time limits can apply after divorce or separation (depending on the relationship type and circumstances). Early advice on timing is often important to avoid unnecessary procedural issues.

“Can we do a super split by private agreement only?”

Super funds generally require a legally recognised instrument—usually Court orders or a compliant financial agreement—to implement a split.

“Will splitting super affect my insurance inside super?”

It can. Some super accounts include life or income protection insurance. If a balance reduces significantly or accounts are closed/rolled over, insurance arrangements may change. This should be checked before finalising the split.

10. Key Takeaways

1. Superannuation is treated as property in family law and can be split between parties.

2. There is no automatic 50/50 rule—super is considered as part of the overall property pool.

3. A split usually transfers super from one person’s account to another within the super system, not as cash.

4. Correct drafting and fund-specific requirements are essential to avoid delays and rejected orders.