When it comes to the complex area of superannuation and family law disputes there have been positive changes in recent years. But splitting super assets is still far harder than it needs to be.
This is especially so for vulnerable, cash-strapped women in relationships that end badly.
According to the Women’s Legal Service of Victoria (WLSV) the growth in value of superannuation balances in the community has led to an increase in family law disputes involving superannuation and many women being short changed when it comes to super splitting.
WLSV frequently deals with situations where a former husband or partner simply ignores requests to provide details of their superannuation assets and is able to walk away with what could be the former couple’s only asset.
Unfortunately, legal action isn’t an option for many women. In one WLSV pro-bono case, a woman applying for a super split entitlement of $40,000 faced legal costs of $50,500, leaving her in debt.
Even when super balances are big enough to justify court costs, the search for a partner’s super can be tricky due to multiple accounts or having to track down various employers to obtain account details.
A few years ago, WLSV set up a ‘Small Claims, Big Battles’ project that researched and identified the systemic problems faced by vulnerable women seeking family law property settlements. As part of this project, WLSV is working with super industry stakeholders to examine ways to improving outcomes from family law super splits, including a streamlined small claims process through the courts. This group – which includes AIST, Women in Super, HESTA, Industry Super Australia (ISA), and legal firm, Mills Oakley – is working on a range of improvements including a standardised simplified super splitting order template, that is much more user friendly and accepted by both the courts and the superannuation industry. WLSV is hopeful such a template could evolve into a DIY kit – much like a DIY kit for wills – that could be completed by an individual without involving costly legal advice.
Currently, super funds have different forms requiring completion by those seeking information about their former spouse or partner’s super. These forms can be complex to navigate and, traditionally, some super funds have charged fees to provide information on balances and for processing super splitting decisions. If the spouse has more than one super fund, as is often the case, multiple forms are required.
Encouragingly, the wider super industry is getting behind the project. Last month WLSV presented the super splitting project to member funds of the AIST Policy Committee and it was extremely well received.
Many funds have since begun looking at fees involved in super splitting and the industry is assisting to develop a standardised form.
The Government is also taking steps in the right direction. Its 2018 Women’s Economic Security Statement allocated $5.9 million to federal family courts to conduct a two-year trial of simpler and faster processes for resolving family law property cases. A further $3.3 million has been allocated to the Australian Tax Office to develop an electronic information-sharing system to give the family law court improved visibility of parties’ superannuation assets when making property orders.
The ATO information sharing scheme reform requires a bill to be passed in Parliament before the scheme commences in July this year. It is hoped this Bill can be prioritised in coming months.