Previously, de facto couples in Western Australia have been unable to split their superannuation in a property settlement. Whichever party worked and personally earnt the super is therefore entitled to retain it and the other party has no claim to these funds. However, as of 18 August 2022, the WA Parliament has finally passed legislation allowing for de facto couples in WA to split super assets.
With more than 200,000 de facto couples in WA, the inability to split superannuation has resulted in serious inequity between separated parties. This has particularly disadvantaged women, who are more likely to take time out of the workforce to birth and care for children and, on average, have less super than men. The prevalence of homelessness in older women is rising, and the comparative lack of super is a leading cause.
However, being unable to split super can also cause inequity in situations where, since one party is not entitled to a share of the other party’s super, they may retain a larger portion of the non-super assets. The other party may then be left with significant assets which they cannot access for several years, as they are held within their superannuation.
This is not the case elsewhere in Australia and, in fact, WA is significantly outdated with respect to the splitting of superannuation. Legislation was introduced in 2002 allowing all married couples (even in WA) to split their super, and de facto couples in all other Australian states have been able to split super assets since 2009.
The Federal Parliament passed a bill in December 2020 which would allow WA to introduce super splitting, pending further legislation being passed by the Western Australian Parliament. Following several years of pressure from lawyers and stakeholders, these new laws have now been passed by our State Parliament, allowing the Family Court of Western Australia to make orders for the splitting of superannuation assets with respect to de facto couples.
While the reform has been passed in the State Parliament, it is yet to take effect. The ability for de facto couples in WA to split super will commence on a date yet to be announced.