Your Retirement Fund and How it is treated in Divorce

You know what is retirement fund, don’t you? It is also called as pension fund or superannuation or just super in Australia. It is a compulsory fund that the government of Australia asks you to keep aside for your retired life. It is small chunk of your income set aside as retirement fund where your employer too contributes to it by certain percentage.

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Superannuation is governed by Federal Government of Australia and is managed by Superannuation Fund Trust. Anything related to superannuation, is decided by this Trust.

Do you know how your super is calculated?

 

Your employer contributes around 9.5% of your salary to your superannuation fund.

Ordinary time earnings (work hours, extra hours, shifts, paid leaves etc.) * 9.5% = Superannuation amount.

Generally, superannuation can be claimed when you reach your retirement age of about 60-65 years.

Marriage and Superannuation

 

However, superannuation is also considered as an investment during your divorce and figures in the financial settlements.

As per the Superannuation laws, a partner or a spouse can claim a share in superannuation as a part of financial settlement during their separation and divorce. On death of a partner or spouse, the surviving partner gets to claim the superannuation as natural successor.

According to Superannuation Laws, a spouse or a partner is in one from the below mentioned relationships:

  1. De facto relationships: where in two individuals are living together in a genuine domestic relationship and are not legally married and who don’t have any familial relationship.
  2. Legal Marriage: where two individuals are married by law.
  3. Any other legally recognised relationship like same sex or different sex partnerships, under different state laws. Such as, Partnerships mentioned in Relationship Act 2008 in Victoria state.

 

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Superannuation Claims

 

In lawful marriages, it is obvious that the spouse gets a share in superannuation of his/her spouse. In other relationships, such as, de facto relationships or others, the partners must explicitly prove that their relationship was based on genuine domestic relationship. And that the partners are / were dependent on each other financially, emotionally, and socially.

The individuals, claiming superannuation of their partners, must first prove these circumstances:

  • The partners took care of each other and contributed in their own capacity to carry out household chores, and manage other expenses.
  • The partners are/ were dependent on each other financially.
  • The partners lived as couple and were in genuine domestic relationship.
  • In the case of death of one partner, the other partner must prove that he/she was in intimate relation with the deceased partner.

Same Sex Partners and Superannuation Claims

 

Despite the circumstances, where the same sex partner is bestowed as beneficiary in the will of the deceased same sex partner, it is still legally impending to consider the partner the rightful claimer of the superannuation.

The superannuation does not form part of property or estates that is up for sharing or splitting in case of death or separation.

The individuals in the same sex de facto relationship must opt for binding nomination, and nominate their partner for a rightful share in their superannuation fund. The partners must fill the binding nomination form and renew it once, every three years.

A video on super and divorce in Australia:

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