Moving in together is an exciting time for people in relationships. Probably the last thing on your mind is what can happen in the event of a breakup.
But it’s worth knowing that if you separate, your ex may be able to file a legal claim for half your retirement under certain circumstances.
and for all states (except Western Australia), you are not required to be married, have children, or have a household together; Even people in real relationships can have their super split when they break up.
For the purposes of family law, a de facto relationship occurs when you and your partner live together as a couple on a de facto domestic basis but are not married.
The retirement of both the partners is included in the pool of assets divided upon separation. Super often young people are the biggest financial asset, so make sure you know what the law says on this question.
Here’s what you need to know.
by order of the court, or by agreement
Splitting the super could become a bigger issue in the coming years, as the mandatory employer contribution gets ratcheted up. When retirement was made mandatory about 30 years ago, the employer contribution was 3%. As of July, they have hit 10%. So these assets are getting bigger, faster.
According to the Federal Attorney-General’s website, retirement can be divided into either:
an order of the Federal Circuit and Family Court of Australia (or the Family Court of Western Australia for married couples in Western Australia); Or
A retirement agreement (a financial agreement that deals with a retirement interest).
The Family Law Act 1975 empowers the Family Court to deal with the retirement interests of spouses (including actually spouses).
Retirement generally cannot be taken as a cash payment; In most cases, it is transferred to the recipient’s own retirement account.
Read more: People are using artificial intelligence to help resolve divorce. Are you?
These laws were designed to tackle the long-standing problem where a man in a relationship – usually a woman – would have a small amount for his partner.
This is because, in one generation, it was especially common for women to give up work and spend many of their productive years as primary caregivers of their children. Even now, women are more likely than men to reduce their working hours to raise a family and have a fraction of the retirement of their male partners.
The laws are meant to ensure equality in the event a relationship is established and to improve the life of a person with less financial power after the relationship ends.
But society has changed and we are more likely to part ways and be partners again. Along with this, the greater involvement in it means that these cases are coming up more often now than before.
How do these laws apply to me?
You don’t need to be married to potentially split your assets.
This applies if you have a child together or have been in an actual relationship for at least two years. The definition of a substantive relationship under Section 4AA of the Family Law Act 1975 is based on whether you were living together in a genuine domestic relationship.
According to the Act, a person is in a substantive relationship with another person if:
(a) the persons are not legally married to each other; And
(b) the persons do not belong to the family
(c) having regard to all the circumstances of their relationship, they are concerned as a couple living together on a genuine domestic basis.
The circumstances of the relationship are determined and include matters such as how you organize your finances, whether you have children, your commitment to a life together and whether other people will see you as a couple.
So consider these issues before moving in together or taking steps to strengthen your relationship.
Remember that any division isn’t necessarily a half-half. You can make a settlement without going to court, but if you do end up in court the judge will take into account the relevant circumstances, including whether you have children, direct and indirect financial contributions to the relationship, and the ongoing needs of each party.
And if a relationship has ended in bitterness, the judge will be mindful of the possibility that a legal claim to an ex-partner’s super may be part of a retaliatory effort to cause distress, and will be taken into account. Is.
open your eyes go inside
It is not common for people in new or real relationships to produce legal documents to protect themselves.
Go in with your eyes open, but you have to have a certain amount of faith. Engaged couples sometimes consider drawing up a financial settlement (a prenuptial agreement), which can address issues such as super.
You can read more about retirement and your rights in the event of a breakup at the website of the federal attorney general, who has also produced a “Frequently Asked Questions” factsheet on the matter.
You can also:
Search online for factsheets on the issue prepared by your state government
Contact a legal aid organization in your state or a free legal helpline such as LawAccess NSW or its equivalent in Victoria.
Remember, a financial agreement—before or after the breakup—is not binding if both parties have not received financial advice.
Couples who have already gone through the hardships of divorce, separation, or widowhood may be more likely to make legal arrangements to choose what will happen in the event of their separation or death, especially if they make sure Want that children are financially secure from that relationship.
And absolutely everyone – young and old – should take a serious look at where your Super will go if you die. It’s important to make sure your super goes where you want it.
Read more: Voluntary super: a good way to increase women’s dependence on men