De-facto Couples – Did you know?
At this time de-facto couples in Western Australia cannot split Superannuation interests when they are financially separating. This is because, unlike in any other Australian state or territory, the Family Court of Western Australia does not have the power to do so.
Superannuation splitting is the process of transferring superannuation interests from one party’s superannuation fund to the other’s superannuation fund. The process of superannuation splitting often ensures that a fair and equitable split of the assets is attained, particularly when the parties do not have substantial liquid assets to ensure an equal or appropriate division of assets. In Western Australia, superannuation is not considered an asset that can be split for the purpose of a property division between de-facto couples following a separation.
This is also in contrast to the law relating to married couples in WA, which states that superannuation is considered property and allows for married spouses to split their super as part of a property settlement.
The practical effect of the current de-facto law in Western Australia is that a large number of people in de-facto relationships going through a financial settlement may be disadvantaged, particularly where superannuation forms the main asset, or one of the main assets, of the relationship. Particularly, these laws have mainly affected women who generally accumulate less superannuation due to their role as a caregiver to children opposed to consistent paid employment.
Lucky for de-facto couples, change is on the way!
In late 2018, the Commonwealth Government agrees with the State Government to introduce legislation to allow de-facto couples to split their superannuation entitlements in the same manner that married couples can.
The current draft bill can be found here:
Proceedings which are commenced before the new Act commences will operate under the existing legislation, which means superannuation is excluded from the property pool.
Proceedings commenced after the new Act commences will have superannuation automatically included in the property pool.
When with the changes commence? That remains unclear. In late 2019, the amendments were introduced to Federal parliament, however the legislation is yet to be passed through both houses. Due to the delays associated with Covid-19, it is unlikely that the changes will commence until 2021.
Do you need some more advice about how you will be impacted by the superannuation changes? Book an appointment with one of our Family Lawyers today!