29 October 2018

De facto delays so de rigueur

Over the coming months, you are going to see a lot of people in collapsed de facto relationships in WA trying to delay the finalisation of their property settlements.

On the flip side, their partners will be pressing to resolve things at a breakneck pace.

Federal Attorney General Christian Porter last week unveiled a change in law to remedy a long-term inequality which currently prevents separated de facto couples in WA from splitting superannuation entitlements when dividing assets.

In property settlements for married couples around the country, super is already included in the pool of available assets and those entitlements can be transferred from one spouse to the other to enable a fair division of the overall family wealth.

This is also the position for de facto couples in all states except WA. Here, because superannuation cannot be transferred between those couples, it is not included in the asset pool.

Where a significant portion of the family wealth is held in super, this has the ability to significantly disadvantage the more financially vulnerable partner.

This disadvantage is particularly common in WA at the moment given the depressed property market where many have little or no equity in their home.

Both the State and Commonwealth Attorney Generals’ have now publicly declared their support for a change in the current federal laws.

This brings to a power struggle between the WA State and Federal Governments’ which has been raging for more than 10 years and has, until recently, prevented the problem being corrected.

The changes will be a second lot of welcome relief for people on the poorer side of a relationship breakdown.

The legalisation of same sex marriage following last year’s breakthrough plebiscite means thousands of people no longer have no choice but to cop the short end of the super stick in a break-up.

Like any married couple, superannuation is included in the pool of assets to be divided between the same-sex spouses and can be transferred from one spouse to the other.

Like their heterosexual compatriots, same-sex Sandgropers with small super savings stand to lose big time in a de facto relationship carve-up in WA right now.

And all de facto couples will continue to be on the wrong end of the law for at least another year.

The Federal Attorney Christian Porter said he will make the necessary legislative amendments to allow de facto couples in Western Australia to split super in 2019 with a view to the law coming into effect for the start of 2020.

Given the number of people disadvantaged by the current law, it might be the first time litigants in the Family Court of WA are actually happy about the delays.