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Superannuation for separated de facto couples in Western Australia

Superannuation for separated de facto couples in Western Australia

In Western Australia, separated de facto couples are unable to split their superannuation in a property settlement until such superannuation has vested in them (ie. can be accessed under the relevant superannuation laws) unlike in all other States. The reason behind this is somewhat complicated but essentially this is as a result of the operation of the Constitution and the non-referral of powers by the WA Parliament (B and G (2010) FCWA 33 paragraph 6). So for de facto couples in Western Australia, each party retains the full benefit of their respective superannuation in a property settlement.

Superannuation of de facto parties in Western Australia is not considered property for the purpose of a property settlement. Instead, superannuation is considered a “financial resource” (s205ZD(3)(f)(ii) of the Family Court Act 1997 (WA)) and an adjustment may be made in favour of either party resulting in them receiving a greater proportion of the non-superannuation pool of assets due to one party having greater superannuation entitlements.

Superannuation of de facto parties in Western Australia may be considered property and available for division in a property settlement if the superannuation is to be treated as vested, having regard to the parties age and circumstances (eg. they have reached their preservation ages) (Forrest & Forrest & Ors (2013) FCWA 6 paragraph 7). In those circumstances the Family Court may make an Order requiring a party to transfer some or all of their superannuation to another party or deal with their superannuation in a certain way or restrict a party from dealing with their superannuation in a certain way.

As superannuation cannot be split for de factos in Western Australia before vesting, one option to avoid this problem is an application to the Family Court to adjourn proceedings for a property settlement if there is likely to be a “significant change in circumstances” of either party in the future and if that change is more likely to do justice between the parties (Family Court Act 1997 (WA) s205ZG(5)). In considering the adjournment the Court may have regard to the parties’ respective superannuation entitlements and any property to be received from a discretionary trust (Family Court Act 1997 (WA) s205ZG(7)).

One of the problems with the current inability to split superannuation for de factos in Western Australia before vesting is that if a de facto party diverts additional assets or income into their superannuation leading up to or after separation then this may in turn result in such assets or income not being susceptible to a splitting Order had the parties otherwise been married.

A party may seek to set aside transactions into a superannuation fund which is made or proposed to be made to defeat any existing or anticipated Order or which, irrespective of intention, is likely to defeat any such Order (Family Court Act 1997 (WA) s222):

“…The relevant Order must be existing or anticipated and an anticipated claim is not sufficient. The test is whether the Order in question is one which would be anticipated by the reasonable disponer at the time of the deposition, properly considering all the circumstances of the case.

For the disposition to defeat or be likely to defeat the anticipated Order, it much be shown that the anticipated Order cannot otherwise be satisfied, without the disposition being set aside.

The onus is on the Applicant to establish the necessary elements. Even if all of the requirements of the section are satisfied, the grant of relief is purely discretionary” (Campbell & Louis (2017) FCWA 44 paragraphs 52 to 55).

While the wording of section 222 of the Family Court Act 1997 (WA) for de facto parties in Western Australia differs slightly from the wording of s 106B of the Family Law Act 1975 (Cth) for married parties in Western Australia, the differences are not of substance and authorities in which the application of s 106B has been considered are usually relevant (Campbell & Louis (2017) FCWA 44 paragraphs 51).

Another problem with the inability to split superannuation in Western Australia for de factos can result in what is known as ‘forum shopping’. That is, one party may seek to have their matter heard in a different State to fall under the Family Law Act 1975 (Cth) in order to enable superannuation splitting Orders to be made and gain an advantage. Caution must be taken in this regard as it will have to be established that the particular State has jurisdiction to hear the matter and that it is the most appropriate forum. Legal advice is required on this issue.

The Family Lawyer’s Practitioners’ Association of Western Australia (“FLPAWA”) is presently in consultation with the State Government and other interested parties to enable de facto parties in Western Australia to split their superannuation before vesting as part of a property settlement. Kim Wilson & Co have representatives on FLPAWA and are involved in these consultations.

 

Adam Somerville-Brown Senior Associate  adam.somerville-brown@kimwilson.com.au

 

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