5 October 2021

The Family Law property settlement process can be difficult enough at the best of times – both emotionally and financially. However, draft legislation has recently been released by the Government to simplify the identification of superannuation assets during Family Law proceedings.

If the proposed legislation proceeds as drafted, the changes will make it harder for parties to hide or under-disclose their superannuation assets in Family Law proceedings. It will also make it easier for the parties involved to get access to the accurate superannuation information they require.

Why are the proposed changes important for women?

The proposed changes will help people who are going through Family Law proceedings to access accurate superannuation information more easily and with greater support from the courts.

This in turn should result in reduced time and complexity and lower costs when obtaining superannuation information, which could help women going through difficult separations or escaping abusive relationships receive a fairer split of the superannuation assets.

As noted in the explanatory materials included with the draft legislation, ensuring accurate and complete superannuation details are listed in the Family Law property settlements will assist with splitting of assets in a just and equitable basis. This can help improve the financial hardship and unequal retirement income outcomes that people, particularly women, often experience after separation.

What are the key legislative impacts of the proposed changes?

If the proposed legislative changes proceed, this will result in amendments to both the Taxation Administration Act 1953 and the Family Law Act 1975 and will allow information held by the Australian Tax Office (ATO) to be leveraged for Family Law purposes.

Parties to Family Law property proceedings will be able to apply to the relevant court (Family Court of Australia, Federal Circuit Court of Australia or Family Court of Western Australia) to request information from the ATO in regard to the identity and value of a former partner’s superannuation accounts.

The draft legislation also authorises the ATO to disclose this superannuation information to court registry staff for the purpose of relevant Family Law proceedings.

What information will be provided by the ATO under a Family Law request?

The superannuation information which will be provided by the ATO is likely to include:

• The name and the last-reported account balance of each superannuation interest.

• Whether each superannuation interest is in retirement or accumulation phase.

• Whether each superannuation interest is an account based or defined benefit interest.

The consultation period for the drafted legislation closed on 28 June 2021 and it is currently under review by the Government. If it proceeds, it will enable women leaving relationships to access better information about their ex-partner’s superannuation assets if they are involved in Family Law proceedings. And this can only be an improvement to the current process and should assist women to get a fairer and more equitable outcome on a consistent basis.

If you’d like more information or advice on your superannuation, please contact your adviser or get in touch with the Findex SMSF team.