Webb Thom & Associates Solicitors - West Ryde, Sydney Australia

Newsletters

Superannuation splitting provisions assist Family Law Property Settlements

By Anne Arthur LLB

In a recent case deciding a matrimonial property adjustment under the Family Law Act Federal Magistrate Ryan succinctly stated the intention of the Family Law Act amendments “super splitting legislation”. She pointed out that superannuation has long been regarded as a joint venture to which both parties to a marriage contribute and plan for their retirement.

“The intent of the super splitting legislation is to ensure that the artificial divide whereby one party, commonly the husband, has the sole benefit of superannuation saved for during cohabitation, no longer operates. Because of the super splitting legislation the non member party, usually the wife, can share in the benefits of retirement planning through superannuation.”

A recent case in our office was settled largely on the basis of the availability of the new provisions. Our client, the husband, at age 56, was in the retirement phase of his superannuation which he was drawing a pension. He also has an interest in a business with a substantial value.

The parties’ children had grown up and were independent and the wife continued to reside in the matrimonial home and wished to continue to do so. There was also an investment property subject to a mortgage, jointly owned by the parties.

Settlement was achieved on the basis of an agreed percentage division. The wife retained the matrimonial home and the husband the investment property with an Order providing that the wife was to receive an agreed percentage of his pension. That Order was approved by the trustee of the Superannuation Fund and the husband’s pension payments were henceforth reduced by that percentage.

The benefit of the agreement was

1. It avoided further adjustment in the wife’s favour out of the other assets which the husband could not afford to finance.
2. It therefore enabled a settlement acceptable to both parties rather than an expensive hearing with a judgement imposed by the Court.
3. The husband’s income is reduced for taxation purposes by the amount of the pension now paid to the wife.
4. The wife will continue to receive the pension payments to which she is entitled under the Orders after the death of the husband.

Anne Arthur is a family lawyer with Webb Thom & Associates of 1012 Victoria Road, West Ryde. Phone 9804 6999.