IMPROVING THE VISIBILITY OF SUPERANNUATION ASSETS IN FAMILY LAW PROPERTY PROCEEDINGS
By Denise Foster, Special Counsel and Jack Job, Law Graduate
From 1 April 2022, new laws will take effect to improve the visibility of superannuation assets in Family Law property proceedings. These are proceedings which deal with the division of property, including superannuation, between parties to a marriage or domestic (de facto) relationship.
The new laws will allow the Australia Taxation Office (ATO) to release superannuation information directly to the newly amalgamated Federal Circuit and Family Court of Australia and the Family Court of Western Australia (the Court). This will make it easier for parties to ascertain and receive their proper share of superannuation entitlements, and harder for parties to hide or under value their superannuation assets.
To obtain this information, an applicant will need to be a party to a Family Law property proceeding and make application to the Court requesting their former partner’s superannuation information held by the ATO. This will identify the superannuation fund/s, and enable the applicant to contact the trustee of the fund to obtain up-to-date information as to the nature and value of the other party’s superannuation benefits.
The new legislation will ensure that all superannuation account balances are disclosed.
What superannuation information can be obtained under the new laws?
On behalf of an applicant, the Court will be able to request the following superannuation information:
- The identity of and/or the superannuation fund name, together with the most recently reported value of each superannuation interest held by a party, and any account in a party’s name containing small amounts of ATO-held superannuation;
- Any amounts of unclaimed superannuation, superannuation guarantee shortfall components and government co-contributions for low-income earners, which are payable to or for the benefit of a party; and
- Certain amounts payable by the ATO Commissioner to a party for their benefit.
The most recently reported value of the superannuation interest will be in accordance with the most recent report to the ATO pursuant to taxation law. Accordingly, this information should not be relied upon exclusively by the parties as it may be out of date. Rather, a party should also apply directly to the superannuation trustee of the relevant fund for the most up-to-date value of the other party’s superannuation interest. Also, the information provided by the ATO is not intended as a substitute for various superannuation valuation methods as codified in the Family Law (Superannuation) Regulations 2001 and other laws.
What is the expected impact of the new laws?
These changes will help a party identify which superannuation trustees to approach for more up-to-date information regarding their partner’s superannuation interest. This will be especially helpful in cases involving domestic violence or an uncooperative partner, and will assist to reduce costs and delays otherwise incurred to obtain this information.
Access to this information will better support separated couples to divide their property on a just and equitable basis in accordance with the Family Law Act 1975.
Further, if the information supplied by the ATO reveals that a party has not disclosed superannuation assets, that party may be in breach of their duty of disclosure. If so, that party may incur a costs order, be found to be in contempt of Court, or be charged with an offence.
Ultimately, these changes will ensure a more streamlined and cost effective process for ascertaining the proper value of superannuation benefits available for division between competing parties in Family Law property proceedings.
If you or someone you know is going through a separation, we recommend you seek legal advice from MST Lawyers’ highly experienced Family Law Team. You can contact our team on (03) 8540-0200 or at firstname.lastname@example.org