How superannuation is split in a divorce, and why many women miss it

Superannuation is property. In an Australian divorce it can be divided, the same way the family home can. It does not split automatically, and it is not automatically 50/50: it is only divided if it is dealt with as part of the property settlement. It is also the asset women most often forget to ask about.

There is a detail in a lot of separations that women find out about too late, sometimes years too late. Superannuation is part of the property pool. It can be divided. And it is often the second-largest asset a couple holds, after the family home.

Yet research from the Australian Institute of Family Studies found that many divorcing couples do not consider superannuation at all when they divide their property. That oversight lands hardest on the person who tends to have less super of her own, which, for all the reasons in our piece on the super gap, is usually the woman.

This is not a guide on what to claim. That depends entirely on your situation and needs proper legal advice. It is a guide to knowing the thing exists, and roughly how it works, so you are not finding out about it after the paperwork is signed.

The history: why this is even a question

For most of Australian legal history, super was invisible in a divorce. Before the reforms that began on 28 December 2002, there was no formal mechanism to split a superannuation interest when a relationship ended. Super was treated, at most, as a vague "financial resource" a court could nod at, not property it could divide.

Think about who that protected. In a typical mid-century marriage, the husband held the paid job and therefore the super. The wife held the unpaid work at home and therefore very little. When the marriage ended, he kept his retirement savings intact and she was left to rebuild from close to zero. The law's silence on super was not neutral. It quietly protected the person who had it.

The Family Law Legislation Amendment (Superannuation) Act changed that from December 2002, making super splittable. De facto couples were brought into the same system from 1 March 2009. This is recent history. Many women who separated before these dates were affected by the old rules.

How it works now

Today, superannuation is treated as property under the Family Law Act 1975 and is included in the pool of assets to be divided. A few principles are worth understanding.

• Splitting is possible, but not automatic. Super does not divide itself when you separate. It is dealt with as part of your overall property settlement, and only if it is addressed.
• It is not automatically 50/50. The court, or your agreement, aims for a division that is "just and equitable" based on your whole situation: what each person brought in, contributed, and needs. A super split might be equal, or it might not be. There is no fixed formula.
• A split does not become cash. If super is split, it usually stays as super. It moves into the receiving person's super account and remains preserved under the normal rules, meaning it is generally locked away until retirement age. You do not get a cheque.

The three ways super gets split

Under Australian family law, separating couples can divide super in one of three ways:

1. A formal written agreement (a binding financial agreement), where you both agree on the split with independent legal advice.
2. Consent orders, where you agree and ask the court to formalise it into a binding order.
3. A court order, where you cannot agree and the court decides.

All three are legal processes. The first two require agreement between you; the third does not. Which path fits depends on your circumstances, and this is exactly where a family lawyer earns their keep.

What the process involves

You do not need to memorise this. You just need to know the shape of it, so it is not a black box.

• Valuation. Super has to be valued before it can be divided. You request the information using a Superannuation Information Request Form sent to the fund's trustee. Some funds, like self-managed super funds or certain defined-benefit schemes, are more complex and may need an expert (an accountant or actuary) to value.
• Full disclosure. Both people must disclose all of their superannuation, even super they do not intend to split. Hiding it is not an option the system allows.
• The fund gets a say. If you seek court orders about super, the fund's trustee must be told and given the chance to object. This is called procedural fairness, and there are notice requirements (generally at least 28 days before a hearing).
• Flagging versus splitting. In some cases a "flagging order" can be placed on a super interest, which pauses any payout until the split is sorted, rather than dividing it immediately. This is one of several tools a lawyer might discuss with you.

The short version

• Superannuation is property under the Family Law Act 1975 and can be divided when a marriage or de facto relationship ends.
• Until 28 December 2002 there was no way to split super in a separation. De facto couples were included from 1 March 2009. This is recent law.
• Super is often the second-largest asset after the family home, yet many couples fail to consider it (Australian Institute of Family Studies).
• Splitting is not automatic and not automatically 50/50. It is part of a "just and equitable" property settlement, and only if it is addressed.
• A super split usually stays as super and remains preserved until retirement. It does not turn into cash.
• This is general education, not advice. Separation and super are legal matters. Get a family lawyer.

For most of history, the person with the paid job kept the retirement savings when a marriage ended, and the person who raised the children kept almost nothing. The law only started dividing super this century. It is property, it is often the biggest hidden asset in the room, and it is the one women most often forget to ask about. Understand the system. Then decide.