New changes to family law proceedings in Australia will mean that starting April 1, parties to post-divorce legal settlements can apply to the courts for information from the Australian Taxation Office about their ex-partner’s super.
This latest change will ensure the party that requires details of their ex-partner’s retirement savings as part of their divorce property settlement, historically women, will no longer be met with extensive delays and costly legal fees.
When a couple file for separation or divorce, their combined super can be split between them by mutual agreement or by court order — their super is treated like any other asset, like real estate or other investments.
When the division of the super is decided, the super is required to stay within the super system until a condition of release is met. It cannot be paid as cash.
The new laws will allow greater transparency around an individual’s super assets, ensuring a simpler process of dividing super and not losing out on an ex-partner’s super assets.
Historically, the process has been long and convoluted, forcing many women, particularly those from low-income households, to miss out on assets they are legally entitled to.
In the past, the legal fees required to pursue an ex-partner’s super balance cost more than the value of a split contained in a property settlement.
The procedure for splitting super assets varies across super funds, and the task of successfully completing splitting orders is challenging without legal assistance.
This week, industry super fund HESTA has announced a new streamlined, plain-language super splitting request form that does not require legal assistance, and significantly reduces the time to complete it.
More than 80 percent of HESTA 900,000 members are women, working mostly across healthcare, education and community services sectors.
The new Simpler Super Splitting forms are the first in the country, and can be used across the super and legal sectors and by the courts.
HESTA’s chief executive, Debby Blakey, believes the new form will help ensure equity in super outcomes when couples separate.
“This universal, simplified process will go a long way towards ensuring equity in super outcomes when relationships end, but we need more super funds to come on board,” Blakey said.
“Dividing super assets to date has been an unnecessarily long and complex process, often requiring expensive legal advice that can unfortunately result in many women, especially those from low-income households or who are experiencing disadvantage, walking away from their fair share of super assets”.
“Given super is often the largest or only asset in the relationship for low-income families, it means many women are potentially losing their only income in retirement beyond the Age Pension.”
Blakey wants to see other super funds adopt a universal, streamlined splitting form to make the task faster, easier and ultimately, fairer for women.
AIST CEO Eva Scheerlinck said that a number of Australian Institute of Superannuation Trustees (AIST) members are in the process of adopting the new templates.
”Simplifying the process of splitting superannuation through family law settlements will benefit all parties by making the process far more efficient, fair and cost-effective,” she said.
“We encourage all funds to do so.”
Director of legal and policy at Women’s Legal Service Victoria (WLSV) Helen Matthews, told the Herald, “Women across the country will now be able to get their fair share of super after a relationship breaks down.”
The new Simpler Super Splitting forms were created in a collaboration between a number of organisations, including HESTA, AIST, Women in Super, Link Group, and WLSV, who work with vulnerable and disadvantaged women, particularly those experiencing family violence.
The latest changes are a key reform recommended by the Claims, Large Battles report by the Women’s Legal Service Victoria in 2018, which looked at the barriers women faced in the family law system.
The report found superannuation was the only substantial asset for 21 percent of women, yet only 39 percent of women had a split of super assets after a separation, contributing to poor economic outcomes for them, such as long-term poverty and homelessness.
WLSV CEO Serina McDuff said she was pleased to see a key reform recommended by WLSV in its report starting to be implemented by the super industry and that work is already underway to roll the new process out nationally to other super funds.
“We identified through our report that women missing out on their share of superannuation after separation was contributing to poor economic outcomes, including long-term poverty and homelessness,” she said.
“With women aged over 55 the fastest-growing group of homeless people in Australia, we prioritised creating change in this area so we could positively impact women’s economic futures”.
From July 1, super payments will be awarded to 300,000 additional people working part-time and casually, after the Federal Parliament passed legislation to abolish regulation that allowed employers to avoid paying super to employees who make less than $450 a month.
Industry Super Australia believes this latest change will help close the gender super gap, which sees women retire with roughly one-third less super than men.
On average, Australian women currently retire with almost 50 per cent less superannuation than men, and 23 percent of women retire with no superannuation savings at all.