“One person not disclosing their super in divorce proceedings can have disastrous financial consequences for the other,” he says.
More than 60 per cent of women suffer from financial hardship within 12 months of separation. This is often perpetuated by a lack of financial disclosure by a former partner, meaning women receive a smaller share of property to which they are entitled.
While the super pool held between two parties is considered joint property, that does not mean that both parties walk away with a 50/50 split.
“The family court will look at what is fair and equitable for both parties, which will be signed off by the courts through a consent order or a binding financial agreement,” explains Jordan Vaka, of Planning Solo, which provides divorce advice.
Considerations include what you brought into the marriage, what you contributed during the marriage, capacity after the marriage and number of dependents.
Stay at home parents who have not worked for some years are recognised as contributing equally, he adds.
The same lens is applied to both married and de facto relationships. However, the rules do not apply to de facto couples in Western Australia.
A recent study by Relationships Australia found that family therapists and lawyers have noted a jump in clients seeking counselling for divorce, while 42 per cent of people admit they have experienced a negative change in their relationship with their partner resulting from hardship conditions emerging during the COVID-19 pandemic.
COVID-19 restrictions have also led to the cancellation of many marriages. Australian Bureau of Statistics data from January to June 2020 show a 31.9 per cent decrease in unions.
Partners Wealth Group head of wealth Patrick Barry has seen a 30 per cent increase in business from couples separating in the past 18 months. “COVID-19 has definitely contributed to that,” he says.
Barry says it is important to remember that the way super is split during a divorce can be negotiated.
“There’s no hard-and-fast formula for calculating how super should be split,” he says.
However, there are complications. A commercial property held in super cannot be split, while the split for self-managed super funds can also be tricky, he says.
A person cannot exclude a partner from the splitting decision-making process, or ignore requests to redeem assets or roll super into another fund, Barry says.
Planning Solo’s Vaka says funds are usually transferred into your super fund within 28 days of a divorce settlement.
He also advises new divorcees to contact their fund and change their insurance beneficiary nomination.