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Superannuation taken as a Pension: Part of the pool or financial resource?

In Russo & Wylie [2016] FamCAFC 227, the Full Court heard an appeal against property orders made by Judge Cole. Judge Cole’s orders divided property between the parties on the basis that the Appellant was to receive 57% of the asset pool, and the Respondent was to receive 43% of the asset pool. In order to achieve this division of property, the Respondent was required to pay $103,000 to the Appellant.

At the time of the hearing, the Respondent was receiving approximately $33,000 per annum from his Military Superannuation Benefit Scheme (‘MSBS’) defined benefit which was being paid to him as an indexed pension. The Respondent’s total beneficial interest in the scheme was valued at $416,804. Both parties sought that the Court did not make a splitting order under s 90MT of the Family Law Act in relation to the benefit. If the Court had made such an order, the annual pension payment would be divided between the parties. Both parties accepted that the benefit should be retained by the Respondent, however, the Appellant sought to have the benefit included in the general pool of assets and the Respondent sought to have the benefit excluded from the pool of remaining assets.

Judge Cole found in favour of the Respondent and excluded the Respondent’s superannuation interest from the pool of dividable assets. Instead, Judge Cole made an adjustment in favour of the Appellant with reference to the MSBS benefit as a financial resource available to the Respondent. Judge Cole found that it would not be just and equitable to make an order which would result in 42% of the Respondent’s assets being inaccessible to him as the asset was only accessible by his weekly pension payment.

The Full Court upheld Judge Cole’s decision noting that both parties sought that there be no splitting order as to the MSBS benefit. In consideration of the both parties seeking the same, the Full Court noted that Judge Cole acted in accordance with established case law.

 

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