Changes to super rules for divorce

By Craig Scarlett
ADF members will soon be able to split their superannuation as part of a divorce settlement following a marriage breakdown.

Recent changes to family law now allow superannuation to be treated as an asset and split between the parties of the marriage in much the same way as other property.

Both parties can agree to adjust the division of other property to compensate for superannuation imbalances.

They can agree on a division of superannuation assets themselves, or they can have the Family Law Court determine the division of superannuation interests as part of the property settlement.

Changes are being made to the MSBS and DFRDB scheme rules that will allow a member’s superannuation entitlements to be split, by setting up a new account for the non-member spouse.

Under the proposed arrangements, the member’s entitlements will be adjusted by an amount that corresponds to that transferred to the former spouse.

Each account will then operate independently according to the prevailing scheme rules.

A bill to effect these changes was introduced into parliament in December last year.

Timing for the passage of the bill is uncertain but it is expected to be passed some time this year.

In the meantime, generic valuation provisions in the family law (Superannuation) legislation will apply to property settlements agreed after December 28, 2002.

Members should be aware that when parliament agrees to the above changes and the associated regulations and rules are approved, members might be able to revisit the agreement using the scheme-specific arrangements as an alternative.

This is on the proviso that no benefits have been paid in the interim.

As individual circumstances differ from member to member, it is strongly recommended that legal advice be sought from a qualified family law practitioner in relation to the treatment of superannuation in the event of marriage breakdown.