When Superannuation Becomes a Hidden Asset in Property Settlements

The family home typically dominates discussions about property division. Yet superannuation often represents an equally substantial portion of the asset pool. Despite this, it remains one of the most frequently overlooked elements of property settlements.

Understanding how superannuation is treated under Australian family law, and taking early steps to ensure proper disclosure, can significantly affect your settlement outcome.

Superannuation as Property Under the Family Law Act

Under the Family Law Act 1975 (Cth), superannuation is classified as property and must be included in the total asset pool when couples separate. This applies to both married couples and de facto partners across Australia.

However, superannuation differs from other assets in important ways. It is held in trust and cannot simply be withdrawn and divided like bank accounts. When superannuation is split, the receiving party's share remains subject to preservation rules, meaning it typically cannot be accessed until retirement age.

This distinction matters. A spouse receiving $200,000 in superannuation cannot use those funds to purchase a home or meet immediate living expenses. Once split, it is still subject to the usual superannuation laws. The parties and the courts  must weigh the practical value of superannuation against immediately accessible assets when determining a just and equitable division.

Why Superannuation Gets Overlooked

Several factors contribute to superannuation being undervalued or ignored during property settlements.

Many people simply do not know their own superannuation balance, let alone their former partner's. The intangible nature of superannuation means that for many it lacks the emotional significance attached to the family home.

There is also a common misconception that superannuation accumulated before the relationship should be excluded from the property pool. This is incorrect. Under Australian family law, all superannuation interests are considered regardless of when they were earned.

The complexity of certain products adds another barrier. While accumulation funds are straightforward to value, defined benefit schemes, self-managed superannuation funds, and income stream products require expert valuation.

The Valuation Process

The Family Law (Superannuation) Regulations 2025, which commenced on 1 April 2025, set out the methods for valuing superannuation interests.

For accumulation funds, which are the most common type, valuation is simple: the account balance on a recent statement provides the value. More complex interests require additional work. Self-managed superannuation funds typically need valuation by an accountant, while defined benefit schemes may require actuarial assessment.

Parties can submit a Form 6 Declaration and Superannuation Information Request Form directly to the fund trustee. Since April 2022, parties in property settlement proceedings can also request information through the Federal Circuit and Family Court of Australia, which obtains records directly from the ATO.

The Splitting Process

Once valued, superannuation can be dealt with in several ways.

Superannuation splitting allows a portion of one party's superannuation to be transferred to the other party's fund. This can be achieved through a superannuation agreement (as part of a binding financial agreement with independent legal advice) or through court orders.

Alternatively, parties may choose superannuation offsetting, where one party retains their full balance while the other receives a greater share of non-superannuation assets. This approach suits parties who need immediate access to funds rather than retirement savings.

Superannuation flagging places a hold on a member's interest to prevent it being paid out until the property settlement is finalised.

Disclosure: Your Legal Obligation and Protection

Full and frank financial disclosure is fundamental to property proceedings under the Family Law Act. This duty has been strengthened by the Family Law Amendment Act 2024, which elevated disclosure obligations into the primary legislation.

Parties must disclose all superannuation interests, even where they do not intend to seek a split. Failure to provide complete disclosure can result in serious consequences: courts may draw adverse inferences, refuse to make orders in favour of the non-disclosing party, or impose costs penalties.

The visibility of superannuation legislation introduced in April 2022 has made concealment far more difficult. Courts can now access ATO records showing all superannuation interests held by either party.

Practical Steps to Protect Your Position

If you are separating, gather your superannuation information through your MyGov account, which provides a consolidated view of all accounts. Request information about your former partner's superannuation through proper channels (either via the ATO visibility mechanism through the Commonwealth Courts Portal if in proceedings, or directly from superannuation funds).

Seek legal advice before agreeing to any property settlement – as your Camden family lawyers (and surrounding suburbs) the Espino team can help. The treatment of superannuation depends on your individual circumstances, age, and retirement timeline.

Superannuation is rarely hidden deliberately, but it is routinely undervalued in the emotional turbulence of separation. Given that it represents a major component of most Australians' wealth, with the superannuation guarantee now at 12 per cent of earnings, its proper treatment in property settlements has never been more important.