Superannuation splitting for separated WA de facto couples
This article provides an overview of the current position in relation to superannuation splitting for separated WA de facto couples, together with information about changes that are expected to occur in the period ahead.
Why is de facto superannuation complex?
One of the factors that contributes to the complexity in relation to superannuation for parties who have been in a de facto relationship in WA, is a division of power between the two Parliaments:
- the WA Parliament has power to make laws in relation to parties who have been in a de facto relationship;
- the Commonwealth Parliament has power to make law in relation to superannuation.
Consequently, creating a scheme for de facto superannuation requires the two Parliaments to work cooperatively together.
What is the current position?
The table below provides a summary in relation to the current availability of superannuation splitting:
|Western Australia||Other Australian States & Territories|
|For parties who have been married||Available||Available|
|For parties who have been in a de facto relationship||Coming||Available|
What has happened so far?
A number of steps have already been taken in the direction of making superannuation splitting available for separated WA de facto couples, as follows:
|26 June 2006||The WA Parliament offered a referral of powers to the Commonwealth Parliament (to enable the Commonwealth Parliament to pass laws to make superannuation splitting available to separated WA de facto couples).||Commonwealth Powers (De Facto Relationships) Act 2006 (WA)|
|21 November 2020||The referral offered in 2006 became effective.||Commonwealth Powers (De Facto Relationships) Act 2006 Commencement Proclamation 2020 (WA).|
|3 December 2020||The Commonwealth Parliament passed legislation to accept the referral.||Family Law Amendment (Western Australia De Facto Superannuation Splitting & Bankruptcy) Act 2020 (Cth)|
|10 December 2020||The Commonwealth Parliament made further consequential amendments||Treasury Laws Amendment (2020 Measures No. 6) Bill 2020 (Cth)|
What remains to be done?
The following steps still need to be completed before the scheme can commence:
|The WA Parliament needs to pass further legislation in relation to some of the finer details about the operation of the scheme.||At the time of preparing this article in early December 2020, there are no further sittings of the WA Parliament scheduled to be held in the remainder of 2020. It is anticipated that a State election will be held in early 2021. It is not yet known whether the Parliament will sit again before the election. It may not be until the second half of 2021 (or possibly later) before the further legislation is passed.|
|A Proclamation needs to be made for the Commonwealth legislation to commence.||It is expected that this proclamation will not be made until the further State legislation is in place (see row above).|
Who will be eligible?
Parties who have been in a de facto relationship in WA will be eligible to seek superannuation splitting if:
- they are separated;
- they have not made a Financial Agreement; and
- there are no final Family Court Orders made between them.
The other eligibility criteria are (deliberately) in alignment with the general eligibility criteria for seeking other financial relief (alteration of property interests and/or spousal maintenance):
- the Application will, ordinarily, need to be made within 2 years after the end of the relationship;
- the duration of the relationship must have been for at least 2 years (or the parties must be able to satisfy an alternate criteria);
- one or both of the parties must be resident in WA on the day the Application is made to the Court; and
- one or both of the parties must have resided in WA for at least one third of the duration of the relationship (or the parties must be able to satisfy an alternate criteria).
If you are reading commentary on the new scheme, care needs to be taken in relation to the time at which the material was written. This is because there were changes made to the eligibility criteria. In an earlier draft (which did not get included in the final legislation as passed), there were going to be restrictions on parties accessing the scheme if they had already commenced court proceedings. Those restrictions were not included in the final version of the legislation as passed.
What if I already have an existing court case underway?
The key criteria for eligibility to access the new scheme will be whether final Orders have been made.
Due to a lack of resources, cases in the Family Court routinely take between 2 and 3 years from when an Application is filed (the start of a case) and when final Orders are made (the end of the case). It is entirely possible that if you have a case at an early stage, by the time it reaches the later stages, the other necessary steps will have been taken (see above) and the scheme will then be available.
On the other hand, if you have a case that is already at a relatively late stage and the making if final Orders is already imminent, then it is possible that you might arrive at a stage where final Orders are going to be made before all of the remaining steps have been completed and consequently, before the new scheme has become available. In those circumstances, it may be possible to consider seeking to have the case adjourned until after the scheme has become available.
What if I have an existing Financial Agreement?
Parties who have already entered into a Financial Agreement at the time when the new scheme commences, will not ordinarily be able to access the scheme. In other words, the existence of the Financial Agreement will, in most circumstances, operate as a barrier to accessing court to seek a splitting Order.
This is consistent with the purpose of the Financial Agreements scheme. Entering into a Financial Agreement is intended to avoid the parties becoming involved in court proceedings.
If the parties to an existing Financial Agreement particularly wanted to be able to access superannuation splitting, then terminating the existing Financial Agreement would be an option. However, in most circumstances that would require the agreement of parties (and the necessary formalities will need to be complied with).
What if I am making a new Financial Agreement?
If you are making a Financial Agreement, whether the superannuation splitting scheme will be available will depend upon the timing of the making of the Agreement:
- If the Agreement is made before the scheme commences, then the scheme will not be available (in other words the Agreement cannot be made in anticipation of the scheme becoming available);
- If the Agreement is made after the scheme has commenced, then the scheme will be available.
William Sloan I Director I Accredited Family Law Specialist