Divorce and your West State Super
If you already know what happens to your super when you divorce, we will now take a closer look at what will happen to your West State Super account.
The way your super is handled depends on whether your Family Law Court order is dated before or after 28 December 2002.
First, the Family Law split is calculated
If your Family Law Court order was dated before 28 December 2002, the split is based on the amount or formula stated in the court order.
If your Family Law Court order is dated on or after 28 December 2002, the base amount to be paid from your West State Super account will be adjusted to reflect the investment performance (i.e. change in unit prices) of your account between the operative date1 and the payment date.
This means that the amount may go up and down in reaction to market movements. We use the following formula:
Member’s units at operative date x unit price at payment date = West State Super entitlement.
If a percentage is used, the calculation is based on applying the percentage to the account balance on the date of processing or a date instructed on the court order.
Interest is then calculated, if necessary
If your Family Law Court order was dated before 28 December 2002, any interest and adjustments will depend on the instructions of the court order. If there is no mention of interest in your court order, then no interest will be calculated or paid.
If your Family Law Court order is dated on or after 28 December 2002, the base amount is adjusted for investment performance, which is reflected in the unit price rather than in the form of interest. This is because West State Super is a unitised fund.
Who is liable for the tax?
If your Family Law Court order was dated before 28 December 2002, tax law treats your Family Law split as a re-direction of your super benefit.
This means the super lump-sum payment is treated as if being made to you and not the ex-spouse. The tax withheld is based on your age because you will be liable for the tax. The Payment Summary is issued to you. Your ex-spouse receives the net amount with no further tax to pay.
Unless the court order addresses this issue, you as the member pays all the tax.
If your Family Law Court order is dated on or after 28 December 2002, tax law treats your Family Law split as if the payment is your ex-spouse’s super benefit.
When the super benefit is rolled over to a taxed fund, the receiving fund will pay 15% tax on the taxable component - untaxed element. This is because West State Super is an untaxed fund, and untaxed funds are generally taxed when the benefit is paid or rolled over to a taxed fund, not while the money is accumulating.
When will the split take place?
If your Family Law Court order was dated before 28 December 2002, we can only make the split once you have claimed your super benefit (i.e. generally at retirement). We must receive the Irrevocable Authority from you before we can release funds to your ex-spouse.
If your Family Law Court order is dated on or after 28 December 2002, we can split your benefit once we have received the original or certified copy of the sealed court order, the payment instructions and certified ID.
If using an agreement, you and your ex-spouse must also supply certificates from your respective legal advisers confirming that you have been provided with independent legal advice.
How is the amount paid to your ex-spouse?
If your Family Law Court order was dated before 28 December 2002, your ex-spouse will be paid their portion of the split amount by cheque or electronic funds transfer (EFT) once we have all documents and you have access to your benefit (generally when you retire).
The amount is paid to your ex-spouse regardless of their age.
If your Family Law Court order is dated on or after 28 December 2002, a letter is sent to your ex-spouse asking for payment details. We will wait 28 days to hear from them about whether they would like to:
- Transfer the amount to a current GESB account
- Transfer the amount over to another complying super fund they nominate
- Transfer the amount to the Australian Taxation Office (ATO) as a voluntary fund transfer, if your ex-spouse isn’t a GESB member and hasn’t chosen a super fund to pay the money into
You can visit the ATO website for more information.
When is the amount paid to your ex-spouse?
If your Family Law Court order was dated before 28 December 2002, your ex-spouse will be paid once you access your benefit (generally at retirement) and once we have received the sealed court orders and your Irrevocable Authority.
If your Family Law Court order is dated on or after 28 December 2002, your ex-spouse can apply to have the amount paid to them once they meet a condition of release of their chosen super fund, usually once they reach retirement age.
If you’re using an agreement, you and your ex-spouse also need to provide certificates from your respective legal advisers confirming that you have received independent legal advice.
1 This is the commencement of recognition of the ex-spouse’s entitlement. For a court order, the operative date is usually the date specified within the court order. For a Splitting Agreement, the operative date is the beginning of the fourth day of business after the day in which a copy of the agreement, together with other prescribed documents, is served on the trustee, together with a copy of the Decree Nisi or Separation Declaration.
Thank you for printing this page. Remember to come back to gesb.wa.gov.au for the latest information as our content is updated regularly. This information is correct as at 04 August 2021.