Superannuation is an increasingly significant asset in the property pool for separated Australian couples. For many, especially those who are separating many years in their marriage or de-facto relationship, superannuation can often be the “sticking point” in trying to reach a settlement.
Superannuation & financial disclosure
As an item that is required to be included in the balance sheet and the entire asset pool, disclosure of one’s interest in superannuation funds is required to be provided.
Disclosure regarding superannuation interests can include:
- Superannuation statements
- Screenshots of current superannuation balances
- Trust deeds for self-managed superannuation funds (SMSFs)
- Trust Annual Accounts for the SMSF
- Bank statements for any accounts held by the SMSF
- Evidence of withdrawals from superannuation funds
- Valuation of the fund (via a Form 6 Superannuation Information Kit)
For many separations involving property matters, this disclosure is not always forthcoming.
The changes mentioned in the Australian Federal Budget
That is why the Australian Government has committed to improving the visibility of superannuation assets in family law proceedings.
The recently-released Australian Federal Budget 2022-2023 outlines how this commitment, under the overarching theme of improving economic security for Australians through their superannuation, is hoped to be achieved. From 1 April 2022, the Government’s reform to improve the visibility of superannuation assets in family law proceedings will come into effect.
The Australian Taxation Office will be able to share information with the Courts on superannuation assets held by parties during family law disputes.
These targeted measures are in addition to broader reforms implemented by the Government over recent years to improve equity and flexibility in the superannuation system and maximise the savings of all Australians.
How?
The Government has released legislation and explanatory material that amends the Taxation Administration Act 1953 and the Family Law Act 1975 to facilitate the identification of superannuation assets by parties to family law proceedings, leveraging information held by the Australian Tax Office (ATO).
The Treasury Laws Amendment (2021 Measure No. 6) Bill 2021 (Schedule 5) will allow the Australian Taxation Office (ATO) to release superannuation information to a family law court upon request. To obtain this information, an applicant will have to be a party to a family law property proceeding and apply to a family law court registry to request their former partner’s superannuation information, held by the ATO. Parties will then be able to use this information to seek up-to-date superannuation information from their former partner’s superannuation fund.
What is the impact?
These amendments will make it harder for parties to hide or under-disclose their superannuation assets in family law property proceedings, and will reduce the time, cost and complexity for parties seeking information about their former partner’s superannuation.
Parties to property proceedings under the Family Law Act 1975 will be able to apply to family law court registries for access to superannuation information from 1 April 2022.
This will help deliver fairer and more equitable outcomes for women going through separation proceedings by reducing the scope for former partners to under-disclose their assets. Access to this information will better support separated couples to divide their property on a just and equitable basis. This will help alleviate the financial hardship and negative impact on retirement incomes that women in particular can experience after separation.
Do you want to learn how to navigate your separation journey with as little stress, money and time as possible?
Contact us to meet with our team of Collaborative Family Lawyers today.
Written by Collaborative Family Lawyer, Stefano Cammarano.
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