Don’t take your super for granted – unless its self-managed!

Prior to December 2002, superannuation was often excluded from property settlements, as it was seen as a future income stream. However, as the understanding of financial assets evolved, lawmakers began recognising superannuation as a form of property that has a tangible value and can be divided just like other assets such as homes, cars, or investments.

Significantly, for carers of children, superannuation splitting law recognises the time parents take away from work to raise children by enabling separating spouses to transfer superannuation entitlements to the spouse who is not earning while on parental leave.

When separating, superannuation can be divided through a process known as a “superannuation splitting” order, where a percentage of one party’s superannuation is transferred to the other party’s fund. This ensures that both parties share the benefit of the superannuation accrued during the relationship. The superannuation splitting system set up for separating spouses in Australia is one of the more complex areas of family law to navigate.

Arranging a financial settlement for our clients includes considering family law, superannuation and taxation issues, and dealing with third party trustees of superannuation funds.

Superannuation splitting is often the most difficult matter to arrange without legal representation.

The Family Law Act 1975 gives the family law courts power to deal with the superannuation interests of parties, which can be ‘split’ or transferred between separating spouses on a percentage or fixed sum basis.

Separately, Regulations made by the Governor-General give effect to the Family Law Act 1975 which enables “superannuation splitting” to occur.

From 1 April 2025, the existing Regulations, the Family Law (Superannuation) Regulations 2001, are being retired and replaced by the Family Law (Superannuation) Regulations 2025.

The Regulations enable trustees of superannuation funds to enable trustees to share information about superannuation interests to member and non-member spouses to who are or may be arranging a superannuation split.

The Regulations also specify how certain superannuation entitlements are to be valued. Broadly, there are three kinds of superannuation interest in Australia:

1. Accumulation interests, which consist of cash contributions which are invested over time, and which pay a finite amount after the member reaches a certain age;
2. Defined benefit interests, which consist of cash contributions, but which pay a certain annual amount, often a percentage of an employee’s final salary, for the period of the member’s lifetime once the member reaches a certain age;
3. Self-managed interests, which are managed privately by the member through a corporate and trust structure that owns assets which can be drawn on once the member reaches a certain age.

The decision of the Full Court of the Family Court of Australia (as it then was) in Coghlan & Coghlan (2005) FLC 93–220 recognised that family law courts have a discretion to treat superannuation as part of all of the property of separating spouses, amongst the pool of other assets, or to treat superannuation as a separate pool of property when determining how to adjust property between the spouses following their separation.

The first step the court takes when treating superannuation separately from other property is to ascertain its value. There are three ways in which a superannuation interest can be valued:

1. using default methods and factors prescribed in the Regulations;
2. using methods or factors approved by the Minister specifically for certain superannuation interests; or
3. by such method as the court considers appropriate.

While the 2025 Regulations largely re-make the 2021 Regulations there are some important differences, including how superannuation interests are to be valued for family law purposes, how superannuating interests which are an income stream are dealt with, and making it easier for non-member spouses to provide information to trustees in the process of implementing a superannuation split.

The 2025 Regulations also update the methods by which certain superannuation interests are valued.

The Australian Government Actuary has said these amendments will:

“support accurate valuation of a wide range of superannuation interests based on current demographic and actuarial assumptions, the accurate calculation of non-member spouse entitlements and the provision of relevant information by superannuation trustees.”

Superannuation isn’t just a future nest egg—it’s a valuable asset that should be factored into property division, ensuring that both parties are treated fairly and equitably.

If you are unsure how your superannuation entitlements will be considered as part of a family law settlement or by a court, you may wish to take advice from before entering into negotiations or as part of your asset planning for the future.

At Fulcrum Family Law, we are experts in superannuation splitting law.

Whether you are a member of an industry fund, have a defined benefit or pension interest, have interests in overseas funds, or you have and manage an interest in a self-managed superannuation fund, together with your financial advisors, we can provide you with expert advice and help you to plan for the future.