Super Accrued During Relationship
The question of what superannuation accrued during a relationship
is quite frequently asked for Family Law financial negotiations. Unfortunately even more
often I suspect that the family law value at the start of the relationship is simply deducted
from the current value. This will not give you the value that will accrue from a zwro balance
at the start of the relationship. It does not adjust for how the start balance will have grown
with earnings even if no additional contributions are made to that component. In financial
calcualtions it is essential to take both time and quantity into account.
A convenient way to adjust for earnings is to use
the interest rates applicable to "Base Amount" Family Law debts. These are
determined by the Australian Government Actuary under Regulation 45D
of the Family Law (Superannuation) Regulations 2001 and published each year. The
rate for 2022/23 has just been released and is 4.7%
An example will show why it is important to polish up
these accrued during relationship questions. Let's (sa) that the value of
superannuation entitlements at 30/6/2022 was $800,000 and the value at 1/7/2003
- the start of the relationship - was $100,000. The result of accrued during
relationship is not $700,000. Rather it is calculated as follow:
| Period: | Start Value | Interest Rate | End Value |
| 1/7/2003 to 30/06/2004 | $100,000 | 7.1% | $107,100 |
| 1/7/2004 to 30/06/2005 | $107,100 | 7.8% | $115,454 |
| 1/7/2005 to 30/06/2006 | $115,454 | 7.3% | $123,882 |
| 1/7/2006 to 30/06/2007 | $123,882 | 7.0% | $132,554 |
| 1/7/2007 to 30/06/2008 | $132,554 | 6.0% | $140,507 |
| 1/7/2008 to 30/06/2009 | $140,507 | 7.3% | $150,764 |
| 1/7/2009 to 30/06/2010 | $150,764 | 8.2% | $163,127 |
| 1/7/2010 to 30/06/2011 | $163,127 | 8.3% | $176,666 |
| 1/7/2011 to 30/06/2012 | $176,666 | 6.3% | $187,796 |
| 1/7/2012 to 30/06/2013 | $187,796 | 6.9% | $200,754 |
| 1/7/2013 to 30/06/2014 | $200,754 | 7.3% | $215,409 |
| 1/7/2014 to 30/06/2015 | $215,409 | 5.5% | $227,041 |
| 1/7/2015 to 30/06/2016 | $227,041 | 5.3% | $239,074 |
| 1/7/2016 to 30/06/2017 | $239,074 | 4.1% | $248,876 |
| 1/7/2017 to 30/06/2018 | $248,867 | 4.7% | $260,573 |
| 1/7/2018 to 30/06/2019 | $260,573 | 4.9% | $273,342 |
| 1/7/2019 to 30/06/2020 | $273,342 | 4.8% | $286,462 |
| 1/7/2020 to 30/06/2021 | $286,462 | 5.7% | $302,790 |
| 1/7/2021 to 30/06/2022 | $302,790 | 5.7% | $320,049 |
A more realistic value for the negotiations is
$800,000 minus $320,049 equals $479,951 - not $700,000!!!
NetActuary can assist with these calculations,
that often have a period after seperation date excluded also. A report
into this aspect is $165 inclusive of gst. Please contact brian@netactuary.com.au
for more information.