Superannuation splitting in Australia: orders, agreements and the right number.

How superannuation splitting works in Australia

Part VIIIB of the Family Law Act 1975 creates the legal machinery for splitting super between former spouses. It applies to both married and de facto couples (the de facto provisions sit in Part VIIIAB but operate identically). The mechanism is unique to super because the trustee — not a party to the relationship — has to action the split.

What counts as a 'splittable interest'

Almost every Australian super interest is splittable: accumulation accounts, defined benefit interests, retirement-phase pensions, SMSFs, approved deposit funds and RSAs. A small number of small interests (under the regulatory threshold, currently A$5,000) and certain non-member-spouse interests are excluded.

Base-amount vs percentage split

For accumulation interests, a base-amount split is usually preferred: it transfers a known dollar figure and is administratively simple. For defined benefit interests, a percentage split is more common because the splittable payment depends on factors not yet known (e.g. retirement date, final salary). The choice has real-world consequences for market risk and certainty.

Procedural fairness for the trustee

Procedural fairness to the trustee comes before orders are made. For consent orders, the trustee must usually receive notice of the proposed terms at least 28 days before filing, unless it consents in writing (Family Law Rules 2021 r 10.06(4)); separate notice rules apply where the matter goes to a hearing. Implementing the split after orders are made is a different step, handled by the fund under its own processes.

Tax treatment

The ATO explains that when super is split, each party is then taxed separately on their own benefit, and the tax-free and taxable proportions of the original interest carry across to the new interest. Tax treatment depends on individual circumstances — get tax advice before relying on it.