A superannuation splitting order or agreement is an order or agreement for the division of the sum held in the superannuation fund either by way of a percentage division/split or a dollar division/split.

Once an order/agreement is made, that order/agreement must be served on the trustee of the superannuation fund as prescribed by the Rules. The trustee must then transfer the amount (either $ or %) from the owner’s name into the name of the other fund similar to a transfer from a bank account. The transfer may be by way of the creation of a new interest in the fund on behalf of the non-member spouse or by rolling over the amount to another superannuation fund in which the non-member spouse already has an interest. Each superannuation fund has its own laws in this regard and investigation must be undertaken prior to an order/agreement being made as to the rules/laws of the fund.

See also the Superannuation Industry (Supervision) Amendment Regulations 2001 (No 3) (Cth) and the Superannuation Industry (Supervision) Amendment Regulations 2002 (No 5) (Cth) .

A flagging order is similar to an injunction which prohibits the trustee of the relevant superannuation fund from making payments without the trustee and/or the owner of the superannuation interest first obtaining an order from the court permitting such payment.

There are many different types of funds considered within the super splitting scheme. However, not all of these different types of funds are mutually exclusive.

In family law proceedings the majority of the funds are either:

• accumulated interests (the most common type of fund);

• defined benefit funds (which are increasingly rare and usually only found in government superannuation funds); or

• self-managed funds (which are becoming increasingly popular as the Australian population ages).

Funds can also change during the life of the account. For example, in the case of Campbell v Superannuation Complaints Tribunal the Federal Court determined that a superannuation scheme which was a defined benefit scheme, had become an accumulation interest after the payment phase commenced due to the member becoming eligible for a pension as a result of injury.

It is important that practitioners identify the type of superannuation fund in which the parties have interests as the way the superannuation is valued is different depending on the type of fund and nature of the interest.

For example, when a party has an accumulated interest in a fund, the most recent superannuation statement or a Form 6 Declaration (Declaration to accompany application to trustee for information about a superannuation interest) completed by the superannuation fund may be sufficient for the purposes of a valuation, whereas if the interest is held in a defined benefit fund or a self-managed fund a formal valuation by a qualified accountant will need to be obtained.

Practice Tips:

• Western Australia has not referred its powers to the Commonwealth in relation to de facto relationships. Instead it has enacted provisions under the Family Court Act 1997 (WA) to deal with property disputes between de facto partners (Pt 5A , Family Court Act 1997 (WA)). This does not include the ability of the court to make any orders in relation to superannuation of the sort commonly identified and utilized by parties under the Family Law Act 1975 (Cth).

• Accordingly, in Western Australia the Family Court of WA takes into account superannuation interests as a financial resource in the same way as the Family Court of Australia did prior to 28 December 2002 and the operation of Pt VIIIB of the Family Law Act.