Superannuation is becoming an increasingly important asset for Australians, and superannuation splitting rules can play a significant role in property settlements. It’s important to understand how it’s treated under superannuation laws and the Family Law Act 1975 if you’re going through property settlement proceedings.
In this article, we’ll look at the general process of splitting superannuation and how it can be affected by the type of super fund. Property settlement law was amended on 10 June 2025, including changes to how family violence, economic or financial abuse, disclosure duties and certain other matters are considered. These changes can affect property settlements that include superannuation. You should get legal advice about how the current law applies to your circumstances.
Key takeaways
Superannuation is a unique form of property that the Court sometimes considers separately.
Parties typically split superannuation through court orders or financial agreements.
Splitting SMSFs and defined benefit funds can be more complicated.
Superannuation splits can take different forms depending on the circumstances.
Is superannuation considered property in a divorce?
Superannuation is considered property for family law purposes. But it’s treated differently from other assets. When it’s in the accumulation phase, superannuation can’t be accessed until the member spouse retires and the superannuation enters the payment phase. That doesn’t change after it’s split.
Even if you don’t intend to split superannuation in your property settlement, you generally still need to disclose it. That applies to married couples and partners in a de facto relationship. The way the Federal Circuit and Family Court of Australia treats superannuation interests can change depending on the case. For example, the Court may approach settlements in the following ways:
Global approach. Super is included with other assets in a single pool.
Two-pool approach. Super may be considered separately from other assets.
Whether the Court uses a global or two-pool approach depends on the circumstances of the case, including the nature of the superannuation interest and the contributions made by each party.
How to split superannuation
Superannuation splitting can be complex. Here are the basic steps that most parties typically take.
Step one: Valuation
You need to understand the value of the super interest before it can be included in a settlement. You may do this by submitting the following forms to your superannuation fund’s trustee:
Form 6 Declaration. This tells the trustee that you have the right to get the required information for the purpose of disclosure. You can find the form in the Superannuation Information Kit.
Superannuation Information Request Form. This is the ATO-approved document that you may use to get the necessary information.
You may need to pay a fee to get the information from the trustee to cover administrative costs. In some cases, you might need to get further assistance from a financial expert to get an accurate valuation. The account balance is generally what most retail and industry superannuation funds use as the valuation.
Step two: Choose your method of splitting super
There are two ways that people usually split superannuation entitlements in a legally binding way.
Superannuation splitting order
Superannuation can be split with a court order in a couple of ways:
Consent order. If you have an agreement with your former spouse, you can seek consent orders by making an application to the Court. The proposed orders can define how you’ve agreed to divide superannuation payments.
Court proceedings. The parties may need to attend a court hearing to make their case about how the property should be divided. Contested matters can take a significant amount of time to resolve, depending on the complexity of the issues, court availability and whether the parties reach agreement during the proceedings. Even if you’ve begun litigation, you can still opt to form an agreement at any stage.
In either case, the trustee of the superannuation fund is generally entitled to procedural fairness. This typically means the trustee is provided with a copy of the proposed orders before the application is filed, so they have an opportunity to review them and raise any concerns. Your lawyer can advise on the current notice period and procedural requirements that apply to your matter.
Binding financial agreement (BFA)
A private superannuation agreement can be made as part of a BFA. It can be entered into at any time during or after a relationship. Both partners are required to seek independent legal advice to make the agreement binding once it’s signed. You don’t need to make a court application. However, the agreement may be challenged in court.
Managing common superannuation splitting rules concern
You may be concerned that your spouse hasn’t disclosed a super interest as part of the settlement process. It’s also possible that they have multiple accounts with different super funds. That can make it difficult to know where to find information. You or your legal representative can request that the Court get the necessary information from the Commissioner of Taxation if you’re in a current proceeding.
Where there is a concern that a party may begin receiving superannuation payments before a property settlement is finalised, an application can be made to the Court for a flagging order. A flag generally prevents the fund from making payments without notifying the parties, and is typically lifted once final orders are made. Whether a flagging order is appropriate depends on the circumstances and you should get legal advice.
Self-managed superannuation funds (SMSF) and defined benefit interests
Super interests can take various forms. Structures like SMSFs and defined benefit interests can be a little more complicated to manage.
SMSFs
There are a number of factors that you may need to consider when splitting an SMSF, including:
Trustee structure. Both partners may be trustees of the fund. It may be appropriate for one party to exit the fund or change the structure.
Asset valuation. All assets should be assessed using their current market value. This often requires the help of a qualified accountant.
Division difficulties. SMSFs can contain illiquid assets, like real estate and business interests. Certain assets may need to be sold to satisfy the settlement.
Compliance issues. Splits should be compliant with superannuation law and remain in line with the fund’s trust deed. Mistakes can lead to significant tax penalties and sanctions from the Australian Tax Office.
Defined benefit funds
Defined benefit funds work differently from other types of super funds. Your retirement benefits are generally determined by a pre-determined formula rather than solely on your contributions. The formula could include factors like:
Your average salary in the few years before you retire.
How long you worked for your employer.
This means that there isn’t necessarily an account balance to point to. The parties may use an actuary to get an accurate valuation.
What super splits typically look like
There are a few ways that you may decide to split a super interest, depending on your circumstances. These include the following:
The non-member spouse may receive a lump sum amount.
They may receive a percentage whenever a splittable payment is made.
A separate super account may be set up in the non-member spouse’s name to receive payments.
The super fund may roll over the divided superannuation into a different, eligible superannuation plan.
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Conclusion
Superannuation splitting rules may be an important part of a property settlement. The split may involve a family law proceeding or a financial agreement. The process can depend on the type of fund under consideration and the valuation methods that are necessary. Once the split has been decided on, it can take several different forms.
Are you looking for family law advice?
Shanahan Family Law has over a decade of experience helping clients navigate property settlements. Contact us today for a free discovery call.
