It is often the case in family law matters that one of the greatest assets of the relationship is the funds that parties hold in superannuation.
The key takeaways are:
- Parties in family law proceedings have often had difficulty in finding out the superannuation interests that are held by the other party.
- This is a serious problem, as superannuation is often one of the largest assets of the relationship.
- From 1 April 2022, parties will be able to ask that the Court contact the ATO to obtain the details of the other party's superannuation.
- This will help parties easily discover the superannuation of the other party and help ensure that fairer outcomes are reached.
Whilst many people might not realise that they are entitled to seek superannuation from their former partner, it is often the case that superannuation represents an extremely important asset of the relationship. This is particularly the case for women, who do not traditionally have as much superannuation as their husbands.
Traditionally, women often have less superannuation. This is often in circumstances where a mother has been out of the workforce for the purpose of raising children. If the mother has not been a member of the workforce for several years, and the relationship comes to an end, the mother can find themselves in a position where they have little or no superannuation for retirement.
It is extremely important that parties are fully aware of the superannuation entitlements that the other party has. However, this can, unfortunately, be very difficult where one party refuses to disclose all of their relevant superannuation interests.
From 1 April 2022, it is going to become much harder for parties to hide their superannuation interests. From this date, separating parties will be able to apply to Court to seek that the Australian Taxation Office (ATO) provide details of their partner's superannuation interests.
The current regime allows for separating parties to contact the superannuation funds of their partner to obtain the balance of the superannuation held in that fund. However, issues can arise where parties have multiple superannuation funds or fail to appropriately disclose the superannuation funds in which they have interests. This often results in parties needing to seek information from several funds or to subpoena employment or taxation information to reveal the superannuation interests held. This is a costly, inefficient, lengthy, and often ineffective solution.
Under the new regime, parties will be able to request that the Court obtain details of the superannuation entitlements of the other party from the ATO. The ATO will then review the request and, if a match to the request is found, will provide the information to the Court, which can then be passed on to the requesting party.
The information that will be provided will be:
- The identity and value of each superannuation interest held by the person who is the subject of the inquiry;
- Any account in the name of the person who is the subject of the inquiry regarding small amounts of ATO held superannuation; and
- Any amount of unclaimed superannuation (such as amounts in inactive low-balance accounts), any shortfall amounts and government co-contributions payable to the person who is the subject of the inquiry.
Importantly, a party must apply to the Court for access to this information. This means that a party will not be able to contact the ATO directly. This means that these provisions will have little effect on a matter unless court proceedings have been commenced.
The new regime presents a much-improved process for those matters that are before the Court. Whilst the effectiveness of the new regime is yet to be determined, it should help parties save time and money and achieve fairer outcomes before the Court.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
