Superannuation is considered property under Australian family law and can be split between separating partners — regardless of whose name the super is in. For many couples, super is the second-largest asset after the family home, and failing to address it in a property settlement can mean walking away from hundreds of thousands of dollars.
How super splitting works
Super can be split as part of a property settlement following separation. There are two main mechanisms:
- Consent orders: Both parties agree on how to split assets (including super) and have the agreement formalised by the Federal Circuit and Family Court of Australia
- Binding Financial Agreement (BFA): A private agreement between the parties, each with independent legal advice, that covers property (including super)
In both cases, the super fund receives a splitting order or flagging order. A splitting order transfers a specified amount from one person's super to the other. A flagging order prevents a fund from paying out super until the property settlement is resolved.
Valuing super
Getting the value right matters. For accumulation accounts (the most common type), the value is typically the account balance at an agreed date. For defined benefit accounts, the calculation is more complex — you'll usually need an actuary to determine the "withdrawal benefit" or "family law value."
Where the split super goes
The receiving party can have the split amount paid into:
- Their existing super fund
- A new super fund they set up for this purpose
- The same fund as the member (held in a new account in the receiving party's name)
The money stays in super — it doesn't get paid out as cash unless the receiving party has already met a condition of release (e.g. reached preservation age and retired).
De facto and same-sex couples
The same super splitting rules apply to de facto relationships (including same-sex) in all states and territories except Western Australia for state-based de facto laws. However, if either party is covered by federal family law (e.g. through the Family Law Act), the federal provisions generally apply.
Tax implications
A super split under family law is not a taxable event. No tax is payable on the transfer. However, once the super is in the receiving party's name, it's subject to the normal super rules — meaning it's preserved until a condition of release is met, and will be taxed according to the standard rules when eventually withdrawn.
Steps to take
- Get a valuation of all super accounts for both parties
- Include super in the overall property pool for negotiation
- Obtain legal advice — super splitting is complex and mistakes are expensive
- Update your beneficiary nominations after separation — your ex may still be listed
- Review your insurance inside super — your cover needs may have changed
Related guides
- Super splitting to your spouse
- What happens to super when you die
- Super beneficiary nominations explained