Retirement planning for two
HESTA can take the guesswork out of retirement planning for you and your partner.
life
We look at how super is considered through a separation or divorce.
No-one enters a relationship thinking it will fail. But fail they do. In 2024, over 47,200 couples were granted divorces in Australia.
So why is it so important to think about superannuation if you separate or divorce?
The sobering super stats for women
Women who have taken on the bulk of caring responsibilities and time out of the workforce can often have significantly less super than their partners.
Super is a divisible asset, just like property, shares and savings. That’s why it really needs to be considered during the settlement process if you’re ending a relationship.
Women in Australia currently retire with at least 25% less superannuation than Australian men1. And Australian women between the age of 35 and 44 are the fastest growing homeless group in Australia2.
In the best case scenario, an amicable decision on how much each person gets will be reached. If not, a court order might be necessary.
How is super divided during divorce or separation?
When couples separate, super can typically be split as part of joint property, but it’s not mandatory.
If separating couples do go on to split their super, in the best-case scenario, an amicable decision on how much each person gets will be reached. If not, a court order to might be necessary.
Splitting super is the most common way that couples apportion accumulated assets during divorce or separation. Super splitting typically follows these steps:
- Find out how much super is in your former partner’s super account or accounts. You can request that the court obtains this information from the ATO.
- Reach an agreement with your partner then seek a Consent Order from the court (it’s a good idea to get legal advice). If you can’t agree, then apply for a court order. There are a number of factors that may be taken into account when determining how super will be split, including non-financial contributions to the relationship, such as taking care of children. A court may also consider the financial position each of you will be in after the divorce or separation.
- Send a copy of the Consent Order or court order to the super fund or funds.
Making super fair
For many women, super is the only asset they can claim from their former partner, yet many walk away from accessing it because dividing super assets through the family law system can be complex. It also often requires legal advice, which can be costly.
This can result in many women, especially those from low-income households or who are most vulnerable, simply walking away from their rightful share of super assets. This can mean losing their only income in retirement beyond the Age Pension.
HESTA was one of the first Australian super funds to adopt the Simpler Super Splitting initiative. This offers a simple, plain language form for court orders that can be used across the super and legal sectors and by the courts. Members can access the form through their lawyer or relevant proceedings.
Do you need to start a conversation about your super?
HESTA super experts can provide advice about your super at no extra cost. It’s all part of the service.
watch the video: divorce and separation
Marthes Pattman, Member Education Manager:
We work our whole lives in anticipation of the ultimate goal: retirement and relaxation with the ones we love.
But sometimes things don't work out the way we plan.
No one enters a relationship thinking it will fail, but fail they do.
On average, around 50,000 couples divorce each year.
So why is it important to think about superannuation if you separate or divorce?
Well, on average, women in Australia currently retire with less superannuation than Australian men, and older women are at greater risk of becoming homeless.
You need to ensure you look after your own interests.
Divorce or separation can be tough. It's not just the emotional stress, but also the challenges of staying organised, which can be very overwhelming.
Remember, planning for your future takes an entirely new direction when you separate or divorce, and you need to remember your super counts as an asset.
How superannuation is split during a divorce or separation could have a long-term impact on your financial future during retirement.
When couples separate, super can generally be split as part of a couple's joint property.
Even though your super is in your name, super sets itself apart from conventional assets.
If you have a de facto partner or spouse, it's treated as a joint asset.
Additionally, there are superannuation splitting laws that provide the legal framework that guides the division of superannuation when an eligible relationship ends.
It's important to note that superannuation isn't converted into a cash asset when you separate.
It stays in a nominated super fund and it's subject to superannuation laws, meaning it generally can't be used until retirement age is reached.
If you're going through a divorce or separation, we’re here to help.
In fact, HESTA was the first Australian super fund to adopt the Simpler Super Splitting initiative.
This offers members a simple, plain language form for court orders that can be used across the super and the legal sectors and by the courts.
We strongly recommend seeking advice from HESTA's super specialists before you begin the super splitting process, as there are other implications to consider depending on your age.
The way super splitting works generally follows these steps:
1. You find out how much super your former partner has. You might need to request the court obtains this information for you from the ATO.
2. You reach an agreement with your former partner and then seek a consent order from the court.
3. Finally, you send a copy of the consent order or court order to the applicable super funds.
You can find out more information about separation and super on our website.
There are some other things to consider when going through a divorce or separation:
1. Think about any debts like loans, credit cards, and bills that might be in your name that you may not be responsible for moving forward.
2. Your ex-partner might have multiple super accounts that need to be considered as part of their total super pool.
3. Updating your binding or non-binding beneficiary on your super account.
4. HESTA has partnered with Infoxchange, the not-for-profit social enterprise behind Ask Izzy. Ask Izzy connects people in need with housing, a meal, financial help, family violence support, counselling, and much more. It's a free directory, which you can use anonymously and includes thousands of services available to the community at locations closest to you around Australia. Search for Ask Izzy on our website.
Super can be one of the biggest investments you and your former partner have, so make sure you consider super as part of any separation or divorce.
Remember, we’re here for you. Contact us and we'll help you get the right advice.
make a time to speak with an expert
Our team can help you with any and every part of your super.
you might also like
Meet Julie-Anne
Former nurse and HESTA member Julie-Anne has been increasing her financial literacy through reading, online videos and super presentations. Read her story.