Improving transparency of superannuation interests in a property settlement
1 April 2022 will see a significant change in the visibility of the superannuation entitlements of parties seeking a property settlement, once amendments to the Family Law Act 1975 (Cth) come into effect. From this date forward, a party to proceedings in the Federal Circuit and Family Court of Australia (FCFCOA) may seek an Order that the Australian Taxation Office release details of all superannuation interests held by their former partner. This is a welcome change from the previous position, which made it easier for parties to conceal their full superannuation entitlements, particularly when they held an interest in two or more funds.
There is already a legislative requirement that parties to family law property proceedings provide full disclosure of their financial assets, including their superannuation entitlements, but it is not uncommon for this requirement to be ignored. While there is currently a mechanism that allows parties to confidentially seek their former spouse's superannuation balance, which generally involves submitting a Form 6 Declaration and a Superannuation Information Form, knowledge of the fund is required so the request can be sent to the Trustee of that fund. Put simply, a party must know the name of their former spouse's fund to know where to direct the request.
These amendments to the Family Law Act will not replace the current procedures under the Act. Rather, they will provide a secondary option for parties to apply to the Registrar of the Court to request superannuation information without any requirement to supply the name of the fund. This request is then sent to the Commissioner of Taxation, who will be required to disclose the information to the parties and their lawyers.
This change is expected to reduce costs, time and stress for parties, which currently create barriers to obtaining just and equitable property settlements. It is anticipated to be of significant benefit to women leaving financially or domestically abusive situations where perpetrators seek to continue this abuse by actively concealing their assets. This is in response to a key finding of the 2018 Women's Legal Service Victoria (WLSV) report, Small Claims, Large Battles, which investigated the barriers to fair financial outcomes in the family law system, particularly for vulnerable and disadvantaged women who had a small amount of property to be divided after separation. Often, superannuation entitlements are the only asset available for division. Lander & Rogers' Family & Relationship Law group is proud to have been involved in the WLSV project and to see the real legislative changes that have been implemented as a result.
For further information and guidance on superannuation splitting as part of a property settlement, please contact a member of our team.
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