Binding Financial Agreements and Superannuation Splitting

Separating couples may divide or split their superannuation as part of their overall property settlement arrangements. However, superannuation splitting does not convert super into cash.

Super splitting means super is transferred from one (member’s (spouse party’s)) super fund to another spouse party’s superfund and/or adjustment in member entitlements. Moreover, the funds transferred are preserved for the transferee and are then subject to normal superannuation regulations.

How to split your super

In order to split super, the trustee of the super fund must be satisfied that the transfer is in compliance with The Family Law Act 1975 and Family Law (Superannuation) Regulations 2001 (Cth).

To do this, couples may:

  1. enter into a binding financial [separation] agreement, or
  2. submit an application for Consent Orders to the FEDERAL Circuit and Family Court of Australia, or
  3. seek an order from the Court if the parties cannot reach agreement.

close-up image of a divorce application form which must also include the BFA with superannuation splitting

How to start superannuation splitting

Step 1:

First, you need to get information to value the superannuation.

You should also provide the following forms to the trustee of the super fund or have your lawyer do this on your behalf:

  • Form 6 Declaration
  • Superannuation Information Request Form
  • A copy of the proposed financial agreement or super splitting order for the Trustee’s approval

 

Procedural fairness

Superannuation splitting orders require the trustee of the relevant superannuation fund to carry out your request. As a matter of procedural fairness, the trustee of the superannuation fund must be given formal notice of a proposed superannuation splitting order before it can be made.

Step 2:

Enter into a binding financial [separation] agreement or consent orders.

Example of typical clauses contained in a BFA

ABC Super

(a)       That in accordance with sub-section 90XJ(1)(c)(i) of the Family Law Act 1975 (Cth), whenever a splittable payment becomes payable in respect of the superannuation interest of Party 1 in ABC Super, member number 123456, Party 2, or her legal personal representative will be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using the base amount of $000,000.00, and there will be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this Agreement.

(b)   That the Trustee of ABC Super must comply with the obligations imposed upon trustees of eligible superannuation plans under the Act and Family Law (Superannuation) Regulations 2001 (Cth).

(c)   That paragraphs 1(a) and 1(b) bind the Trustee of ABC Super and take effect from the operative time being the fourth business day after the date of service of this Agreement on the Trustee.

(d)   That Party 1 caused a certified copy of this Agreement to be served on the Trustee of ABC Super on or before 28 days of the date of this Agreement.

  1. The parties acknowledge that this Agreement will be made as a Part VIIIB superannuation agreement under Section 90XH of the Act and the parties agree that they will make no claim on the other parties’ superannuation at any time in the future.

The trustee of the super fund will then arrange for the super to be transferred from 1 fund to the nominated second fund of party 2.

an image of a woman who is anxious about superannuation splitting and BFA following the relationship breakdown

Need help with your Family Law Matters?

AussieLegal offers a range of family law services, including the preparation of your Binding Separation Agreement (BSA). Also called Separation Binding Financial Agreement or Separation BFA, it is essential if you need to split superannuation, transfer real estate and refinance mortgages. This service includes independent legal advice and certification for both parties compliant with the Court requirements.

We also offer assistance with the preparation of your application for Consent Orders, which is another way for you to split super.

Call us on 1300 728 200 to discuss your situation with one of our consultants.