 |
Web Hosting by Netfirms | Free Domain Names by Netfirms |
|
 |
ARTICLE: Splitting the super pie
http://finance.news.com.au/common/printpage/0,6093,5234364,00.html
Sunday Telegraph
6 October 2002
Splitting the super pie
Australians will soon be able to "split" superannuation after a divorce under new national laws.
From December 28, super will formally be included as part of a property settlement on divorce.
Nearly 40 per cent of marriages now end in divorce while the second biggest asset households have after the family home is super.
For lower income households, super represents nearly all their wealth, according to a recent study by the National Centre for Social and Economic Modelling.
Currently, super can be considered as part of a property settlement but it can't be split and experts say the result can be unfair.
"Now, a settlement can result in one partner, usually the husband, getting the super but very few of the other assets (such as the family home) while the wife gets the house but no super," says Kim Guest, technical manager at AM Corporation.
"As a result of this change in the law, there should be benefits on both sides - the husband will get some assets he can use now - like a bigger split of the property - and the wife may get less of the property but more money in retirement," she says.
Garry Watts, senior partner at family law firm Watts McCray says the change will give the courts "much greater flexibility".
He uses the example of a couple who have contributed equally to the marriage and who have equal earnings power who own a $400,000 house and $200,000 super.
Currently the non-super fund member spouse (probably the wife) may get a $300,000 share of the house while the super fund member (probably the husband) would get a $100,000 share of the house plus the super.
"After the laws come in, the courts could still do that or they could split the super so the couple get $100,000 each as well as a $200,000 share of the house each. It will also make it easier for the courts to put a value on the super which will be higher in many cases than has been assumed," he said.
Anne Holland, Relationships Australia chief executive, said the new law was "a good thing".
"It will be important for people where there is no property other than super," she said.
Lawrence Hastings, a lawyer at Clayton Utz, said couples divorcing now could take advantage of the new laws.
"If you want super to be included in your settlement then you should delay finalising your property settlement till December," he said.
However, Garry Watts said a couple who made a voluntary agreement could undo it after the new law came in effect.
"If a court has made an order before December 28 then that's final, but if you've made a binding financial agreement you may be able to undo it to re-arrange your affairs," he said.
From December 28, super can be split via a voluntary (binding financial agreement) between the couple or by the courts if the couple can't agree. Binding financial agreements (like pre-nuptial agreements), have been legal since December 2000 and allow couples to agree on the division of property - before, during or after the marriage has officially ended.
However, superannuation splitting will only be allowed for married couples - not for de facto couples - who are covered by state laws.
"De factos can't benefit from 'adjustment for the future' clauses available to married couples in property settlements which normally count super," Mr Watts said.
"But the states and the Federal Government can't agree so far on which de factos should be covered under any national de facto laws - in particular, same sex couples".
The new laws also give the husband or wife the right to request information from their estranged spouse's super fund to prevent information being "hidden" said Clayton Utz's Hastings, "but this is restricted to information like the super fund balance.
"However, the new law won't allow the super fund trustee to tell the super fund member that the information has been requested by their spouse," he said.
http://finance.news.com.au/common/story_page/0,4057,5234364%255E462,00.html