RETIREMENT - SUPERANNUATION
Recently Parliament passed a Bill to allow divorcing couples to split their superannuation in the same way as their other assets. While it received much publicity, the basic principles have not changed significantly since the ground breaking case of "Crapp & Crapp" in 1979.
A major problem with superannuation is the uncertainty of the amount, and the Crapp case was a classic example. Crapp was a Qantas pilot whose large superannuation benefit was one of the couple's biggest financial resources after a long marriage, but the trouble was that it was not due for 11 years from the time of the court hearing. Also, the value of it then depended on his final salary, which at the time of the hearing was impossible to estimate accurately.
To make it more complicated, until this bill was passed the courts have tended to regard superannuation as a resource of the marriage, not an asset that can be divided. Thus it has been reluctant to make specific orders regarding superannuation but, if possible, will take the presence of superannuation into account when splitting up the other assets. For example, if an investment property owned by the couple was worth $150 000, and the superannuation benefit was worth $150 000, the spouse without superannuation may be awarded the property to balance things up.
The Family Court has wide discretion and will consider the length of the marriage, the extent to which the superannuation fund has grown during that marriage, the ability of the wife to contribute to her own financial needs, and the other assets of both parties. It will consider also probable future changes in the situation of either party. For example, one of them may be expecting a large inheritance or may intend to remarry.
The age of the parties is carefully considered, for superannuation may have little relevance if both are young, but assume great significance if they are close to retirement.
If the court is satisfied that a spouse is adequately provided for, it may disregard the superannuation altogether. In the case of Nolan and Ingram the wife had been married to a teacher who was expecting a large superannuation payout. She remarried another teacher in a similar position and the court held that she had merely exchanged one financial resource for an equivalent one. This approach is fine where the situation is simple, but does not work so well where there are insufficient other assets.
But there is one problem that looms over all the others. Superannuation is generally inaccessible until one stops work after age 55; therefore a couple may split their superannuation and still achieve an iniquitous outcome.
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