It’s shocking to see the divorce rate steadily climb from 2020 to 2023. The number of divorces in Australia rose to 56,244 in 2021, a 1.9% rise from the previous year, while over 47,000 divorce petitions were filed with the Federal Circuit and Family court today.

Most significantly, with divorces comes property splits agreements. Unfortunately, the existence of divorce superannuation is not commonly known for superannuation entitlements are eligible to be treated as ‘property’ and can be split between separating parties at the time of a property settlement.

image to that shows two people divorcing and may be conversing about contract of divorce superannuation as well

How is superannuation split in divorce?

Superannuation can only be split if it’s of ‘splittable’ interest in accordance with s90XE(2) & 90YG. This means it should have a super value of over $5k and is not of consideration for payments on compassionate ground, disability payments nor overseas superannuation funds. 


Parties become payable to or on behalf of the member spouse from his or her interest in the Superannuation within the meaning of Section 90XE or s90YG of the Act. Whereas, payments to the non-member spouse will be determined in accordance with Division 6 of the Family Code.

Who does the divorce superannuation splitting laws apply to?

It applies to: 

  • People who are legally married and want to divorce; 
  • People who are legally married but have separated but have yet to divorced; and
  • People in de facto relationships (including same sex couples) who want to divorce and finalise the division of their property in Western Australia

How do I implement a superannuation split?

There are 2 different ways:

  • Court Order; or 
  • Written Binding Financial Agreement (BFA) between parties

The best strategy for executing a client’s desired superannuation split will vary from case to case. Most matters can be resolved amicably, without the need for a Family Court hearing, through the use of a consent order or a binding financial arrangement (‘BFA’).

What are the differences between Court Order & BFA?

Most of the time, getting a consent order tends to be easier and inexpensive than getting a binding financial agreement (BFA). This is because Consent orders are often times backed by an application that is filled out on a specific form that can be used in the Family Court. Binding Financial Agreements, on the other hand, must be written based on the specifics of each case. In some situations, you don’t need a lawyer to get a consent order.

In order for Binding Financial Agreements to be legally binding and meet the requirements of the Family Law Act, both parties must hire their own lawyers. Many people wrongly think that binding financial agreements (BFAs) are just another option to look at when a court may not grant orders on the terms that the parties present.


Despite rising marriage rates, more unmarried couples are signing BFAs before or during their relationships to avoid the time, money, and emotional toll of negotiating the end of a romantic partnership. Though, it is important to note the BFA provision addressing superannuation interests will become effective after a marital or de facto relationship has been formed. (S.90XH(4), S.90XHA(4)) ,

Benefits of Binding Financial Agreement?

Here are some benefits BFA provides: 

  • It allows an increased certainty about how assets will be split when a couple breaks up;
  • Provides risk reduction of  couple needing to go to court in order to divide their assets, which can be expensive, time-consuming, and stressful; and 
  • the ability to put away assets owned before the relationship or assets that were given to them.

Methods to split superannuation

  • Base amount payment split
    • Specifies a set of dollar amount that is to be paid to or for the non-member spouse
  • Percentage interest payment split
    • Specifies a percentage of each splittable payment that is to be paid to the non-member spouse

The base amount payment split is better for a member spouse whose superannuation benefits have grown a lot between the time the relationship starts to encounter trouble and the time the superannuation split is finalised. This is because the parties to the agreement may be able to say that the superannuation interests are split based on a certain amount or formula at a certain point in time, and that any growth or appreciation of the superannuation interest after that point stays with the member spouse.

On the other hand, when the market is going down, the member spouse usually wants to use a percentage split method because it means both of them will share the impact of any detrimental market condition. 

SMSF Obligation

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After all this, the SIS Act and SIS Regulations must be complied with at all times by the SMSF (as well as the SMSF trustee or directors of the trustee company). It can be stressful to manage an SMSF yourself especially after an increase or decrease of your retirement savings account, so why not tune into Mint Super Audit to ease your burden.

For further information about common SMSF mistakes to avoid, click here.

In the event that you require assistance in resolving such concerns or in acquiring additional clarification, please do not hesitate to get in touch with us here at Mint Super Audit. We offer face-to-face super audit consultations in addition to our online super audit services.