Superannuation flagging on separation
On separation — super interest splittable under Pt VIIIB Family Law Act.
Who must comply
Trustees of eligible superannuation plans holding an interest of a separating member, who must give information, observe payment flags and implement splits; and separating spouses and de facto partners, and their lawyers, using agreements or court orders to deal with super.
What triggers it
A spouse's information request with the prescribed declaration; service of a superannuation agreement, flag lifting agreement, splitting order or flagging order on the trustee; or a successor fund transfer of a flagged interest.
When due
Information must be provided in accordance with the regulations after a valid application; a payment flag applies from the operative time until lifted; notification of the next splittable payment is due within the period set in a flagging order.
Evidence required
Information requests, declarations and the trustee's responses (which must not disclose the member's address to the spouse); served superannuation agreements, flag lifting agreements and court orders; records showing no splittable payment was made while a flag operated; notices to member and non-member spouses; payment split calculations and implementation records.
Max penalty
A trustee who makes a splittable payment while a payment flag is operating, fails to provide required information, or discloses the member's address to the spouse commits an offence of 50 penalty units ($18,200), or 250 penalty units ($91,000) for a body corporate under s 4B(3) of the Crimes Act 1914 (Family Law Act 1975 ss 90XL(4), 90XZB).
Summary
Part VIIIB of the Family Law Act 1975 allows splittable payments from a superannuation interest to be allocated between the parties to a marriage or de facto relationship, either by agreement or by court order, and overrides any contrary law or trust deed. A superannuation interest is treated as property for property settlement. A payment split can be made by a superannuation agreement or flag lifting agreement, or by a court splitting order. A payment flag freezes the interest: under a flagging agreement, or a court flagging order under s 90XU, the trustee must not make any splittable payment until the flag is lifted by agreement served on the trustee or ended by the court, and may be ordered to notify both spouses when a payment next becomes payable. Trustees must also answer prescribed information requests so parties can negotiate.
Enforced by
Source legislation
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Frequently asked questions
- Who must comply with Superannuation flagging on separation?
- Trustees of eligible superannuation plans holding an interest of a separating member, who must give information, observe payment flags and implement splits; and separating spouses and de facto partners, and their lawyers, using agreements or court orders to deal with super.
- What triggers Superannuation flagging on separation?
- A spouse's information request with the prescribed declaration; service of a superannuation agreement, flag lifting agreement, splitting order or flagging order on the trustee; or a successor fund transfer of a flagged interest.
- When is Superannuation flagging on separation due?
- Information must be provided in accordance with the regulations after a valid application; a payment flag applies from the operative time until lifted; notification of the next splittable payment is due within the period set in a flagging order.
- What is the maximum penalty for Superannuation flagging on separation?
- A trustee who makes a splittable payment while a payment flag is operating, fails to provide required information, or discloses the member's address to the spouse commits an offence of 50 penalty units ($18,200), or 250 penalty units ($91,000) for a body corporate under s 4B(3) of the Crimes Act 1914 (Family Law Act 1975 ss 90XL(4), 90XZB).
- What evidence is required for Superannuation flagging on separation?
- Information requests, declarations and the trustee's responses (which must not disclose the member's address to the spouse); served superannuation agreements, flag lifting agreements and court orders; records showing no splittable payment was made while a flag operated; notices to member and non-member spouses; payment split calculations and implementation records.
Source: https://www.legislation.gov.au/C2004A00275/latest/text. Rules Mate is not a law firm. Always verify against the live regulator source before acting.