Superannuation reform is looming as the Government releases draft legislation for the long-anticipated changes relating to superannuation and family law. Specifically, the reforms will enable a party to a proceeding in the family courts to request their ex’s superannuation information from the Australian Tax Office. The legislation has been welcomed by stakeholders who say the laws will make a significant difference to the wellbeing of vulnerable Australian women.
This legislation was originally due to be released in 2020 but was delayed. Experts say it’s high time that the reform was implemented.
Seeking accurate superannuation information has been difficult, if not impossible, for many parties as they go through the family law system. It has been a time-consuming, costly and complex process, and not always successful at preventing dishonest or abusive partners hiding or under-disclosing their super assets.
With super frequently the most valuable asset in a relationship, the new legislation is expected to provide courts with “a single, reliable source of truth about which super funds their former spouse is a member of”.
Tania Clarke, Manager of Policy & Campaigns at Women’s Legal Service Victoria, said:
“Once this legislation is passed, it will be harder for perpetrators of family violence to hide information about their superannuation accounts, as the court will be able to get that information directly from the ATO.
“For many of our clients this reform will be the difference between walking away from a relationship with nothing, and getting a fair split of super assets that will help them recover financially from years of abuse.”
The move has also been welcomed by The Australian Institute of Superannuation Trustees and Women’s Legal Service Victoria. CEO Eva Scheerlinck congratulated the Government on the draft legislation, adding the scheme, following on from the recent Budget announcement to remove the $450 monthly income threshold for compulsory super contributions, was “another important step in improving the retirement outcomes of women”.
The Government is being urged to introduce the legislation as quickly as possible, preferably in the August sittings of Parliament. Experts also called on the Government to work with all stakeholders on the practical aspects of the process.
While this reform should make it easier to identify super assets for women going through a difficult separation or escaping an abusive relationship, it’s important to note that there is still a need for further superannuation reform. Unfortunately, women are still at a disadvantage when it comes to super.
Influenced by such things as gender pay inequity and women’s careers being impacted by caring duties, women tend to have far less super or savings than men. They are also disadvantaged by super and tax concession arrangements, whereby high income earners get a 30% tax break from the government. By contrast, half the female workforce earns less than $40,000 a year, meaning these women don’t receive any super boost from tax concessions. If women earn less than $450 per month, they don’t receive any super contributions at all. As the Australian Financial Review has put it:
“These contribution and tax differences compound over a working life, leaving women with less savings at retirement and vulnerable if they have a marriage breakdown, lose their employment or suffer ill-health.”
There are still calls to increase the superannuation guarantee to 12%, which industry experts have said their modelling showed would translate to “an increase of $30,000 at retirement for a low income young woman today, or a woman who has had time out of the workforce or worked part-time while caring for kids”.
Source: Mirage News
Do you need help with a property or superannuation matter, such as obtaining a superannuation valuation for a family law matter? Please contact Canberra family lawyer Cristina Huesch or one of our other experienced solicitors here at Alliance Family Law on (02) 6223 2400 to discuss your matter further.
Please note our blogs are not legal advice. For information on how to obtain the correct legal advice, please contact Alliance Family Law.