By Angela Hayes, Associate, Kim Wilson & Co Family Lawyers
In Western Australia separated de facto couples have been unable to split their superannuation entitlements in a family law property settlement matter until such entitlements had vested in them (ie. could be accessed under the relevant superannuation laws) unlike all other States. The reason behind this is somewhat complicated but essentially this is as a result of the operation of the Constitution and the non-referral of powers by the Western Australia Parliament. For de facto couples in Western Australia, each party generally retained the full benefit of their respective superannuation entitlement in a property settlement.
In 2006, the Western Australia Parliament provided a narrow referral of power to the Commonwealth for de facto superannuation splitting. This narrow referral was not accepted by previous governments as it did not extend to other de facto financial matters.
In March 2018, the Western Australia Government and Federal Government agreed to a limited referral of power which would enable de facto parties to split their unvested superannuation entitlements, bringing Western Australia into line with the rest of Australia.
On 27 November 2019, the Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Bill 2019 (the Bill) was introduced into Federal Parliament. Separating de facto couples in Western Australia will be able to split their superannuation entitlements under the proposal. Attorney-General Christian Porter said the draft laws would also allow de facto couples to have bankruptcy matters dealt with at the same time as family law proceedings, creating national consistency for de facto relationships. The legislation would avoid the need to pursue these matters as separate proceedings in two different courts.
The date of commencement of any court proceedings between de facto couples may have an impact on whether superannuation splitting is available in the circumstances of their case. The Bill provides proposed transitional provisions which will take effect once the Act passes. The transitional provisions propose, in effect:
- Superannuation splitting will not be available where court proceedings have already been commenced before the amendments take effect. On the other hand, if court proceedings are commenced after the amendments take effect, then splitting may be available.
- There will also be a mechanism to allow parties to “opt in” even if the proceedings have been commenced before the amendments take effect, subject to being able to satisfy certain conditions.
The Bill is still before the Commonwealth Parliament and may be subject to amendment before it passes. At this stage, it is unclear when the Act will pass and the new laws commence to in effect allow superannuation splitting for de facto couples in Western Australia.