The Federal Government has passed through Parliament legislation which will improve the visibility of superannuation assets in family law proceedings.
The Treasury Laws Amendment (2021 Measure No. 6) Bill 2021(Schedule 5) would allow the Australian Taxation Office (ATO) to release super information to a family law court upon request.
To obtain this information, an applicant would have to be a party to a family law property proceeding and apply to a family law court registry to request their former partner’s superannuation information, held by the ATO.
Parties to property proceedings under the Family Law Act 1975 would be able to apply to family law court registries for access to super information from 1 April, 2022.
The Minister for Financial Services, Superannuation and the Digital Economy, Senator Jane Hume, said super was an increasingly significant asset in the property pool for separated Australian couples.
“These amendments will make it harder for parties to hide or under-disclose their superannuation assets in family law property proceedings, and will reduce the time, cost and complexity for parties seeking information about their former partner’s superannuation,” Hume said.
“Access to this information will better support separated couples to divide their property on a just and equitable basis.
“This will help alleviate the financial hardship and negative impact on retirement incomes that women in particular can experience after separation.”
Shadow Assistant Treasurer, Stephen Jones said it was concerning it took the Morrison Government four years to pass the legislation since it was originally announced, despite bipartisan support.
“Countless women, who generally have lower superannuation balances than their male partners, have paid a hefty price for that delay,” Jones said.
“While the Government dithered, they faced increased costs, prolonged proceedings and lower settlements than they were entitled to.”
“In particular, Labor expects these changes to help women at risk of domestic violence. We know financial dependency is a major barrier to women leaving violent relationships. Giving quicker access to fairer financial settlements will at last help remove that barrier for many at-risk women.”
Association of Superannuation Funds Australia (ASFA) chief executive, Martin Fahy, said: “The ability to split superannuation on separation or divorce is one of the most important measures to ensure equity and fairness for parties who have experienced the breakdown of a relationship. We support the implementation of any mechanism that assists parties to be able to split their super more easily and fairly.
"The measures are particularly important for vulnerable individuals and will go some way to ensuring they have a more secure long-term financial future.”
Industry Super Australia said: “New super splitting laws passage today will help women get their fair share of superannuation assets when a relationship breaks down and is a positive step to address the gender savings gap – but more must be done to ensure women do not continue to retire with woefully inadequate savings.
“Since 2018 Women’s Legal Service Victoria, and the super industry have pushed for the introduction of laws that would make it easier for parties in family court matters to identify and easily split superannuation savings.
“These laws are a big win for survivors of family violence and will stop perpetrators being able to hide assets. Previously many women gave up on chasing assets they are entitled to.”
Super Consumers Australia, which previously backed the proposal, welcomed the passage of the bill.
Xavier O’Halloran, Super Consumers director, said one person not disclosing their super in divorce proceedings could have disastrous financial consequences for the other.
“This change fixes a problem that overwhelmingly impacts women,” O’Halloran said.
“Women typically have lower super balances due to inequalities in pay and unpaid caring roles. It remains vital that we address these root causes, but today’s reform is an important step towards greater equality.
“Right now, many women are retiring in poverty. Women over 55 are the fastest growing group experiencing homelessness in Australia. Removing the ability for former spouses to hide their super will help address part of this inequity.”
The bill had also saw support from the Australian Institute of Superannuation Trustees (AIST), Women in Super (WIS), Women’s Legal Service of Victoria (WLSV), HESTA, the Economic Abuse Reference Group, and Financial Counselling Australia.
The next step, said Georgia Brumby, advocacy director at Industry Super Australia, would be to address super being paid on Commonwealth Paid Parental Leave.
“For far too long women have found it too hard to get a fair share of financial assets like super when a relationship ends, so this is a positive development.
“The last thing anyone needs in a stressful time, like divorce, is to be confronted with a complex and costly process to get assets they may be legally entitled to.”
“This will go a little way to helping women recover some of the savings they sacrifice by taking time out of the workforce to raise a family, and now the government needs to end the hidden super sting of not paying super on its parental leave scheme.”