Most working Australians have some superannuation and for many their superannuation can be quite a substantial part of their financial future. Before 2002, dealing with superannuation entitlements often posed problems in family law financial settlements because there was no ability to divide them. The outcome usually was that the husband (usually the one with the greater super) would get a lesser share of the other property to compensate for his greater share of the super.
This system led to disputes about how much adjustment should be made in today's money (able to be used today) in exchange for tomorrow's retirement benefits (not able to be used today). The 2002 changes to the law allowed superannuation to be "split" so that, for example, a portion of the husband's super would become the wife's super so as to achieve some sort of balance. A split can be achieved either by a court order or by a Superannuation Agreement between the parties and so long as the required formalities are met, the fund manager must implement the division.
How does it all work in practice? Once the fund manager receives the paperwork, the superannuation benefit in question must be divided as required and a separate interest is created in the wife's name. The other interest is of course reduced by the same amount and a split may be couched either as a fixed amount or as a percentage.
The wife in this situation may move her new entitlement to her choice of fund and if the split comes from a Self-Managed Fund, she may have to. Whatever arrangements are made, the split amount remains superannuation, and can only be accessed in accordance with the superannuation rules which the government has established.
Remember that since 2009, de facto and same sex couples in most states come under the Family Law Act and so splits are available for them also in appropriate cases.
Human nature being what it is, there will be situations where a party with reasonable superannuation benefits may try to get at those benefits in order to prevent a likely split. In such a case, a court can make what is known as a flagging order which has the effect of preventing any dealings with the benefits without court permission.
Most Australians have what is known as an accumulation fund where the benefits are the contributions to their fund as well as the earnings on those contributions. There are also funds known as defined benefits funds where regardless of contributions, the benefit is a percentage of final salary. Such funds are usually for employees of the government or very large employers, and are going out of favour.
The ability to divide superannuation is an important part of d seeking to achieve a fair and appropriate outcome in property matters, but it has added a layer of complication to the process no matter if the outcome is achieved by the court process or by a negotiated settlement.