When a marriage or de facto relationship breaks down property can be divided between the parties.

Superannuation is treated as property under the Family Law Act 1975 but it differs from other types of property because it is held in a trust. Superannuation splitting laws allow superannuation to be divided when a relationship breaks down.

De facto couples in Western Australia are not subject to the superannuation splitting laws.

Superannuation splitting

Under the superannuation splitting laws, an agreement or court order to split superannuation is, in effect, an agreement or order for payment splitting.

This means that, as and when, a payment from a superannuation interest becomes payable to the member spouse (usually because a condition of release has been met, such as retirement from the paid workforce) a certain amount will be paid to the non-member spouse and the remainder will be paid to the member spouse.

Payment splitting does not create a new superannuation interest for the non-member spouse.

If there is a payment splitting agreement or order operating on a superannuation interest, the splitting laws may permit the creation of a new interest for the non-member spouse. They may also permit a transfer or roll-out of benefits for the non-member spouse to another fund.

These options are known as interest splitting. Interest splitting lets the non-member spouse access entitlements independently of the member spouse.

For Commonwealth regulated funds, Part 7A of the Superannuation Industry (Supervision) Regulations 1994 and Part 4A of the Retirement Savings Account Regulations 1997 set out the circumstances in which interest splitting options are available. The regulations also set out the process that funds and retirement savings account providers must follow.