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Compliance & Regulation

Court confirms super splitting can’t involve third party

A recent decision handed down by the Family Court of Australia has confirmed superannuation assets cannot be split for the benefit of a third party.

The court finding resulted from the case of Stant and Stant and Anor heard in September.

The case dealt with a situation where Mr Stant owed his former mother-in-law, Ms Mulberry, an amount of $540.729.92.

In an effort to settle some of the debt, it was proposed $220,000 be taken out of Mr Stant’s superannuation account with legalsuper and paid into another account within the same fund to be created in the name of Ms Mulberry.

The presiding judge, Justice Janine Stevenson, ruled he could not make the proposed orders.

According to the judge: “Section 92MS(2) [of the Family Law Act 1975] provides that the court is able to make orders concerning the parties’ superannuation benefits only in accordance with part VIIIB of the act.

“The object of part VIIIB is to allow splittable payments only between spouses or parties to a de facto relationship (section 90MA).

“Section 90MT permits splittable payments to ‘the non-member spouse’, which would include a non-member former de facto partner.

“There is no mandate in section 90MT for a splittable payment to a third party.”

Townsends Business and Corporate Lawyers special counsel Michael Hallinan said he suspected the arrangement was proposed as Mr Stant’s superannuation benefits were the only means by which he could partially extinguish the debt he owed Ms Mulberry.

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