Superannuation Splitting in Divorce

The legal framework

The Family Law Act 1975 gives the family courts power to deal with a couple's superannuation as part of property proceedings. Two separate Parts cover married and de facto couples.

Part VIIIB — married couples

Part VIIIB of the Family Law Act 1975 contains the superannuation splitting scheme for married couples. It allows superannuation to be treated as property and divided by agreement or court order.

Part VIIIC — de facto couples

Part VIIIC extends superannuation splitting to de facto couples in participating jurisdictions. For Western Australian de facto couples, these provisions commenced on 28 September 2022 following the Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Act 2020.

Family Law (Superannuation) Regulations 2025

The Regulations commenced on 1 April 2025, replacing the 2001 Regulations. They set out how superannuation interests are valued, the methods and factors for valuations, and how splitting orders are implemented by trustees.

Types of superannuation orders

The court can make two distinct types of orders depending on the circumstances of your case: splitting orders and flagging orders.

Splitting order

A splitting order immediately divides the superannuation interest. A specified amount or percentage is transferred to the non-member spouse, creating a separate superannuation interest in their name. Splitting orders are typically used in a final property settlement when a clean break is preferred or when the member is close to retirement.

Flagging order

A flagging order prevents the trustee from making payments from the superannuation fund until the flag is lifted by agreement or court order. The super is preserved while parties negotiate or await final orders — most useful when an agreement has not yet been reached or the matter requires more time.

Percentage split vs base amount split

When making a splitting order, you can specify either a percentage or a base amount. Each has advantages depending on your situation.

How superannuation can be split

Superannuation can be split in two ways: by agreement or by court order.

Option 1: by agreement

Three agreement pathways are available:

• Superannuation agreement — a standalone agreement dealing specifically with superannuation, meeting the requirements of Part VIIIB or VIIIC.
• Binding Financial Agreement (BFA) — a BFA under Part VIIIA can include provisions for superannuation splitting as part of a broader property settlement.
• Consent orders — if both parties agree, they can apply to the court for consent orders that include superannuation splitting provisions. The court must approve the orders.

Option 2: by court order

If parties cannot agree, the Federal Circuit and Family Court of Australia can make orders for superannuation splitting as part of property settlement proceedings under Section 79 (married) or Section 90SM (de facto). The court will consider the value of each party's superannuation interests, contributions made by each party (financial and non-financial), future needs under Section 75(2)/90SF(3) factors, and what is just and equitable in all the circumstances.

Valuing superannuation interests

The Family Law (Superannuation) Regulations 2025 set out how superannuation interests are valued for family law purposes. The method depends on the type of fund.

Accumulation funds

For most modern superannuation accounts (accumulation or defined contribution funds), the value is generally the account balance at the relevant date. This is the most straightforward type to value.

Defined benefit funds

Defined benefit interests are more complex to value. The Regulations contain actuarial formulas and factors based on demographic and economic assumptions. These were updated in the 2025 Regulations to reflect current conditions.

Pensions and income streams

Retirement income streams, including innovative retirement products, are valued using specific methods in the Regulations. The 2025 Regulations ensure these products are captured consistently with other superannuation interests.

Key changes in the 2025 Regulations

The Family Law (Superannuation) Regulations 2025 commenced on 1 April 2025, replacing the 2001 Regulations. Four key changes affect how splitting is implemented.

• Updated valuation methods and factors — the default methods and factors used for valuing certain superannuation interests have been updated, including the demographic and economic assumptions that underpin these calculations.
• Clarified key terms — key terms including 'base amount' and 'component of a superannuation interest' have been clarified to reduce ambiguity and improve consistency in how splitting is implemented.
• Flexibility for non-member spouses — greater flexibility has been introduced in how a non-member spouse gives information to a trustee following the making of a superannuation agreement or court orders.
• Transition factor — a transition factor has been introduced to protect parties with agreements or orders made before 1 April 2025. This ensures neither the member spouse nor non-member spouse is inadvertently disadvantaged due to changes in valuation methods.

Practical steps for splitting superannuation

Once you have identified the relevant funds, these five steps apply regardless of whether you are proceeding by agreement or court order.

1. Identify all superannuation interests — both parties must disclose all superannuation interests. Use the ATO's online services or contact funds directly to obtain statements.
2. Request information from trustees — contact each superannuation fund to request family law valuation information. Funds can provide information about whether interests are splittable and their value.
3. Consider super as part of the overall settlement — superannuation is treated as property but is accessed at different times to cash or real estate. Consider preservation age, tax implications, and liquidity needs when negotiating.
4. Formalise the agreement — use a superannuation agreement, BFA, or consent orders to formalise the split. Ensure all technical requirements are met for the agreement to be binding.
5. Serve documents on trustees — once orders or agreements are finalised, serve the relevant documents on the superannuation trustee. The trustee will then implement the split.

Frequently asked questions