Superannuation (your "super") is often the largest or second-largest asset in Australian relationships, especially for couples over 40. Under the Family Law Act 1975, super is treated as property and can be divided between parties just like a house or bank account.
A BFA lets you specify exactly how super will be treated if you separate. Here's the technical breakdown:
Legal Basis: Part VIIIB
Superannuation splitting sits in Part VIIIB of the Family Law Act. A financial agreement can include a superannuation agreement (section 90XH for married couples, section 90XHA for de facto couples), and section 90XJ sets out how a payment split is expressed. Older material cites the 90MA-90MZ numbering, which was renumbered to the 90XA-90XZ series in 2020.
A BFA can:
- Specify how a superannuation interest is to be split
- Quarantine pre-existing super balances
- Treat super differently from other property
Key principle: A superannuation interest isn't property in the ordinary sense, which is the reason Part VIIIB had to be enacted at all. It is treated as property for the purposes of that Part, so it can be divided between you, but only through the mechanisms Part VIIIB sets out.
How Super Can Be Split in a BFA
What myBFA can draft for you. Option 2 is available on every agreement. Option 1 is available when you're separating or divorcing, expressed as a set dollar amount out of one party's fund rather than a percentage. Option 4 isn't a super clause at all, just a choice about how you divide everything else, though be aware our figures leave super out of the pool so you'd be working that trade-off out yourselves. Option 3 isn't something we draft, and neither is a percentage split.
Superannuation splitting also isn't available on an agreement made before or during a relationship. Those agreements record that each party keeps their own super. A split in a prenup or a postnup is legally possible, it just isn't something we can prepare for you here, so you'd need that agreement drafted outside myBFA.
Option 1: Split Proportionally
Divide all super 50/50 (or any other ratio).
Example clause:
"Each party's superannuation interests shall be split 60/40 in favour of Party A, with the split to be effected by base amount flagging and splitting orders under Part VIIIB of the Family Law Act."
Option 2: Each Party Keeps Their Own
No super splitting: each party retains their own super balances.
Example clause:
"Each party shall retain their respective superannuation interests as at the date of this agreement, with no further claims to the other party's superannuation."
Option 3: Split Only Contributions Made During the Relationship
Protect pre-existing super, but split contributions made during the relationship.
Example clause:
"Party A's superannuation balance as at the commencement of the relationship ($250,000) shall remain their separate property. Any growth or contributions made during the relationship shall be split 50/50."
This requires valuing super at the start of the relationship (use super fund statements or actuarial valuations).
Option 4: Offset Super Against Other Assets
One party keeps all the super, the other gets more of the house or other assets.
Example:
Party A has $400k in super. Party B has $200k in super. Instead of splitting super, Party B gets an extra $100k worth of equity in the family home.
Superannuation Splitting Mechanics (Part VIIIB)
If your BFA provides for super splitting, you'll need to follow Part VIIIB of the Family Law Act, which governs the mechanics of dividing super.
Step 1: Identify Super Interests
List all super funds for both parties:
- Fund name and contact details
- Member number
- Type of fund (accumulation, defined benefit, self-managed super fund)
- Current balance (as at the BFA signing date)
Step 2: Determine Splitting Method
Base Amount Splitting
A dollar amount is transferred from one party's super to the other's super fund.
Example:
Party A has $300k in super. The BFA specifies Party B receives $100k. That's a base amount split.
Percentage Splitting
A percentage of one party's super is transferred.
Example:
Party A has $300k in super. The BFA specifies Party B receives 30%. That's $90k.
Step 3: Flagging Order (Optional)
A "flagging order" prevents one party from accessing their super (e.g., by early release or retirement) before the splitting order is finalised. This protects the other party from super being dissipated.
BFAs can include flagging provisions, but they're rare (usually used in contested court proceedings).
Step 4: Notify Super Funds
Once the BFA is signed, you (or your lawyer) must notify the relevant super funds:
- Send a copy of the BFA (or the relevant super splitting clauses)
- Provide superannuation splitting instructions
- Complete fund-specific forms
Each super fund has its own procedures for implementing splits. Some funds are fast (weeks). Others are slow (months). Self-managed super funds (SMSFs) can be particularly complicated.
Special Cases: Defined Benefit Schemes & SMSFs
Defined Benefit Schemes
These are complex because the benefit depends on factors like years of service, final salary, and actuarial calculations. Splitting defined benefit super requires:
- An actuarial valuation (cost: $2,000–$5,000)
- Careful drafting of the BFA to specify the splitting method
- Coordination with the super fund's rules
Pro tip: If either party has defined benefit super (e.g., government, police, or corporate schemes), get specialist advice.
Self-Managed Super Funds (SMSFs)
SMSFs are trusts, so splitting them is more complex than retail or industry funds. Options include:
- Splitting the SMSF assets directly
- One party rolling out their share to a retail fund
- Winding up the SMSF and dividing the proceeds
Pro tip: SMSFs often hold illiquid assets (e.g., property, private company shares). Splitting these requires valuation and potential restructuring.
Tax and Super Splits
Splitting super under Part VIIIB doesn't usually produce a tax bill at the time of the split. The money moves from one superannuation interest to another rather than being paid out to anyone, and rollover relief is generally available for capital gains that would otherwise arise.
That isn't the same as a split being tax-free. The benefit is still taxed when it is eventually withdrawn, according to its tax-free and taxable components. Contribution caps, transfer balance caps, preservation age and the assets sitting inside an SMSF can each raise issues of their own.
We don't advise on tax, and neither does your letter of advice. The advice you receive on your agreement covers its legal effect, not income tax, capital gains tax, GST, duty or any other revenue consequence. Ask your accountant what a split means for you before you sign.
Common BFA Super Clauses
Clause 1: Simple 50/50 Split
"The parties agree that all superannuation interests held by either party as at the date of separation shall be split equally (50/50) by way of base amount splitting orders under Part VIIIB of the Family Law Act."
Clause 2: No Super Splitting
"Each party shall retain their respective superannuation interests, and no party shall make any claim against the other party's superannuation."
Clause 3: Offset Against Property
"In consideration of Party A retaining all of their superannuation interests ($400,000), Party B shall receive an additional $100,000 from the proceeds of sale of the family home."
Why Super Matters in BFAs
- It's big: Average Aussie has $150k–$250k in super at retirement
- It's often forgotten: Couples focus on the house and forget super
- It's divisible: Courts routinely split super 50/50 (or adjust based on contributions and future needs)
If you don't address super in your BFA, and you later separate, it's still divisible under s. 79 and Part VIIIB. Better to address it upfront.
The Bottom Line
Super is property. It's divisible. Your BFA should address it.
Whether you split it equally, keep your own, or use an offset, make sure your BFA has a clear super clause. And if either party has defined benefit super or an SMSF, get specialist advice: don't wing it.
Your lawyer will make sure the super provisions are legally compliant and enforceable.
