Relationship breakdowns and Superannuation

Filed in Articles, Individuals, Superannuation by on October 15, 2013 0 Comments

1The ATO define a spouse as “A spouse includes another person, although not legally married to the person, who lived with the person on a genuine domestic basis in a relationship as a couple (whether of the same or different sex).”

If there is a breakdown of a relationship with your spouse in regards to your superannuation it depends on whether you are in a:

  • A super fund regulated by the Australian Prudential Regulation Authority (APRA) (Industry fund)
  • A Self-Managed Super Fund (An SMSF)

APRA fund:

The Family Law Act 1975 and the Superannuation Industry (Supervision) Act 1993 (SISA) provide for an interest in superannuation (super interest) or a super payment to be divided or split by agreement or court order in the event of a relationship breakdown.A member’s super interest is defined as their ‘interest in a superannuation fund’ – generally, an account will constitute an interest in the fund. Super agreements and court orders specify how a member’s super interest in the fund, or how a super payment is to be split between the member and non-member spouse.


An SMSF works like any other super fund but the responsibility of managing it rests solely with the trustees – the trustees have control and responsibility for the fund’s investment decisions. Despite any difficulties that have arisen as a result of the breakdown with your spouse you must continue to act in the best interests of all members at all times. You must continue to act in accordance with the super laws and the trust deed of your fund.

You cannot:

  • exclude another trustee from the decision-making process
  • ignore requests to redeem assets and roll money over to another regulated complying super fund
  • take any action that is not allowed by Superannuation Industry (Supervision) Act 1993 (SISA) or the SMSF’s trust deed.

If you act in any illegal manner your SMSF can be made non-complying and will be subject to significant tax consequences. You could also be disqualified as a trustee, effectively stopping you from running an SMSF in the future.

The ATO states that the Commissioner has previously made a determination that allows a trustee to acquire assets from a related party of the fund as a result of marriage breakdown. Amended legislation has broadened the scope to allow the acquisition of assets from a related party arising from the breakdown of opposite-sex and same-sex de facto relationships.In addition, changes have been made to allow for the application of the transitional exemption provisions in relation to in-house assets where assets are acquired as the result of a relationship breakdown. These changes apply to assets acquired on or after 17 November 2010.

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