Superannuation and family law – Part 2

Posted on September 1st, 2014

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by Mark Sullivan

Mark Sullivan is a Director at Mullane & Lindsay in Newcastle and specialises in Family, Relationship and Matrimonial Law

If a superannuation splitting order is made as part of a property settlement between a married or de facto couple whose relationship has broken down, such orders typically allocate a base amount or prescribe a percentage sum to the party who is not a member of the super fund.   The non member spouse will receive an entitlement for the allocated base sum or prescribed percentage and the member spouse’s interest in the fund will then be reduced by a corresponding sum.

The super splitting order needs to be served on the trustee of the member spouse’s superannuation fund with details of the non member spouse’s address and date of birth and the order becomes operative generally within 4 days of service.

The superannuation fund trustee calculates the entitlement of the non-member spouse in accordance with the Family Law (Superannuation) Regulations 2001 and pays that entitlement whenever the trustee makes a splittable payment.   The trustee will generally offer the member spouse 3 choices: it can create a new member interest for the non-member spouse in the fund and allowing them to remain a member if its trust deed allows; or it can roll out the new entitlement to another complying fund nominated by the non-member spouse; or it can pay the entitlement to the non-member spouse if they have satisfied a condition of release.

These matters are discussed with clients when discussing possible options in property settlements.

Mark Sullivan is a Director at Mullane & Lindsay, and practises extensively in Family, Relationship and Matrimonial Law. If you require any assistance in this area please contact Mark Sullivan to arrange a consultation or contact our Newcastle office.

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