Has your relationship recently broken down?
Were you and your partner in a de facto relationship?
Do you understand how your assets will be divided following your break up?
A relationship breakdown is inevitably a stressful and emotional time, and to add even more fuel to the fire, you and your former partner need to sort out how your assets will be divided. This can be done in a few ways, namely through a binding financial agreement or court orders.
Overview: superannuation splitting
When it comes to de facto partners in Western Australia, an issue arises in regards to superannuation splitting. In all other states, superannuation is treated as property pursuant to the Family Law Act 1975 (“Act”). This means that superannuation is part of the asset pool and gets divided accordingly. The Act also gives Courts the power to make orders in relation to the splitting of superannuation following a relationship breakdown.
The legislation in WA is slightly different because de facto couples here do not fall under the Family Law Act 1975. This is because the Family Law Act 1975 is Commonwealth legislation and WA didn’t hand over the power to legislate in this area to the Commonwealth.
In WA, de facto couples fall under the Family Court Act 1997, in which superannuation is defined as a “financial resource” rather than being treated as property. As a result of this seemingly small difference in the definition, superannuation of de facto couples in WA is not counted as part of their asset pool in the event of a separation.
Referral of powers
A referral of powers occurs when a state government voluntarily hands over particular responsibilities to the Commonwealth government pursuant to section 51 (xxxvii) of the Australian Constitution.
The Constitution stipulates in section 51 (xxi) and (xxii) that the Commonwealth government has the power to make laws regarding marriage, divorce and matrimonial causes such as child custody and parental rights. By contrast, de facto partnerships are not mentioned in section 51 of the Constitution because making laws about de facto couples was originally a state power rather than a Commonwealth power. In time, however, all of the states except WA have referred this power to the Commonwealth.
The Family Law Act 1975 is Commonwealth legislation that covers family law matters including marriage and, for all states except WA, de facto partnerships. In WA, the Family Law Act 1975 does not apply to de facto couples because such couples fall under the power of the state rather than the Commonwealth. Instead, de facto couples in WA must follow state legislation, namely the Family Court Act 1997.
The two different pieces of legislation are the reason that de facto couples in WA have slightly different rules governing them than de facto couples in the rest of Australia. Consequently, when de facto couples in WA separate their superannuation is not counted as part of their asset pool, whereas in all other states it is.
Change is coming
Conversation is currently taking place in government at both a state and federal level regarding superannuation splitting of de facto couples in WA. Christian Porter, the Federal Attorney-General, has been negotiating with the WA state government to bring de facto couples in WA under the superannuation splitting laws covered in the Family Law Act 1975.
As it stands, de facto couples in WA are at a disadvantage compared with the rest of the country because their superannuation is not included in their asset pool and thus cannot be split following a separation. The proposed change will enable West Australians in a de facto relationship, of which there are roughly 200,000 (as of 2016) to fall under the rules of the Family Law Act 1975, which will in turn bring them into line with the rest of Australia.
If you or someone you know is going through a separation, please do not hesitate to contact Lynn & Brown Lawyers. Our friendly and highly skilled staff of family lawyers will be happy to assist you.
About the authors:
This article has been co-authored by Chelsea McNeill and Jacqueline Brown at Lynn & Brown Lawyers. Chelsea is in her third year of studying Law at Murdoch University. Jacqui is a Perth lawyer and director, and has over 20 years’ experience in legal practice and practices in family law, mediation and estate planning. Jacqui is also a Nationally Accredited Mediator and a Notary Public.