Superannuation is an area that many find perplexing, especially when intertwined with the Family Law Act 1975 and court hearings related to divorce or separation. Here’s how your superannuation, often referred to as “divorce superannuation,” works post-separation:
1. Divorce Superannuation: How It Can Be Split
Each of your superannuation balances are assets that need to be considered when detailing the assets and liabilities of your relationship. Super, like other assets you own, can be transferred between you and your partner in your property settlement, if agreed.
2. Superannuation Funds After Divorce
While superannuation can be transferred between partners as part of a property settlement, it must remain invested in superannuation. Transferring superannuation means the balance of the transferring partner is reduced, while the receiving partner’s balance increases. However, this doesn’t convert the superannuation into useable cash if you are not yet retired.
3. Accessing Superannuation Post-Divorce
You can access your superannuation when you satisfy certain conditions of release, such as reaching your preservation age and retiring, starting a transition to a retirement income stream, or turning 65.
4. Early Access To Divorce Superannuation
In special circumstances, you might be able to access your superannuation early. Common reasons include compassionate grounds or severe financial hardship.
5. Tax Implications Of Superannuation Withdrawals After Divorce
The tax on super payments depends on factors like your age at the time of payment and whether the money in your super account is tax-free or taxable. Always consult your superannuation fund before requesting a payment to understand the tax implications.
Make sure you contact your super fund before requesting a payment, so you understand the tax implications – as with planning, you can achieve your goal of receiving your superannuation payment tax-free.
Note: This is general advice only and you should seek appropriate advice specific to your individual circumstances. If you need legal advice, please see a lawyer. If you need financial advice, please seek a financial planner or contact us.