Taxation of divorce order-related Pension benefits

It is Government’s policy to promote the “clean-break” principle in respect of the taxation of all amounts assigned in terms of divorce orders. This means that in principle, each party to a divorce order should be subject to tax on the portion of the pension interest that each party ultimately receives.

Government Employees Pension Fund (GEPF)

The GEPF introduce the “clean-break” principle for the division of pension benefits. On 14 December 2011 the The GEP Law Amendment Act 2011 amended the law to provide for the implementation of the “clean-break” principle.  This means that former spouses of members contributing to the Government Employee Pension Fund (GEPF) can now claim their share of the fund as stipulated in their divorce order and don’t have to wait until retirement, resignation or death.

Divorce orders issued before 13 September 2007

Transitional rules were implemented to exempt from tax amounts payable to a non-member ex-spouse by private sector funds under divorce orders issued before 13 September 2007. However, the exemption only applied if the non-member ex-spouse claimed the benefit on or after 1 March 2009. The purpose of the exemption was to shield non-member ex-spouses from unanticipated tax consequences that would result if the non-member ex-spouse was suddenly subject to tax on his/her portion of the lump sum benefit. The effect of the transitional rules will be extended so that any amount that becomes payable on or after 1 March 2012 in terms of a divorce order that was issued before 13 September 2007 will be free from tax.  The principle will apply regardless of the timing of the payment to the non-member ex-spouse, and regardless of whether the retirement fund from which the amount became payable has implemented the “clean-break” principle.

Tax regime applicable as from 1 March 2012

The tax regime described below will apply to all amounts assigned in terms of a divorce order (granted under section 7(8)(a) of the Divorce Act, No. 70 of 1979):

  • If an amount becomes payable by a retirement fund on or after 1 March 2012 to a non-member ex-spouse, that person (and not the member ex-spouse) will be subject to tax in respect of that amount.
  • No tax will be payable on any amount that becomes payable on or after 1 March 2012 in terms of a divorce order that was issued before 13 September 2007.
  • Should a non-member spouse owe the South African Revenue Service (SARS) any tax, this will be deducted from the benefit by SARS, regardless of whether the parties divorced before or after 13 September 2007.

These changes will apply to all public and private sector funds, regardless of whether or not the fund at issue has introduced the “clean-break” principle.

Administrative considerations

The South African Revenue Service is in a position to provide tax directives on the basis described below:

  • The retirement fund or the administrator of the retirement fund must apply for a tax directive in the name of the non-member ex-spouse in the case of an amount assigned in terms of a divorce order that becomes payable by the retirement fund to the non-member ex-spouse on or after 1 March 2012.
  • Any amount that becomes payable by a retirement fund to a non-member ex-spouse on or after 1 March 2012, in terms of a divorce order that was issued before 13 September 2007, will be free from tax.
  • The intention is to apply Formula C to pension interest payable by the public sector fund to either the non-member or the member ex-spouse on a continuing basis.

Summary

In short this means the following:

  • Divorces before 13 September 2007 are tax free.  In other words, you will not be taxed on your share of the fund.
  • Divorces after 13 September 2007 will be taxed according to Formula C:
    • The first R22 500 is tax free.
    • From R22 501 – R600 000 = 18% tax
    • From R600 001 – R900 000 = R27% tax
    • From R900 001+ = 36% tax

SourceNational Treasury

Xpression Assist can help ensure that all documents are submitted correctly and timely to ensure that your claim is processed as efficiently as possible.

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54 thoughts on “GEPF Clean Break Divorce Benefit Claims And Taxation”

      1. Good day, I would like a clean break divorce form. Kgokon******.com 061****** got divorced 2015, never claimed for his pension. E took early pension.

        1. Xpression Assist

          Good day Boitumelo, I can assist you to submit your claim. I have sent you an email with further information on how I can assist. Regards

    1. Can you please help I got a devorce on the 3 of March this year and I went to the GEPF on the 13 of April to claim since then nothing happened I didn’t get the money and I don’t know what to do now where to go. Thanks petty

      1. Good day Petty, it is unusual for a divorce claim to take that long to be paid out. It might be that there is an error on your application. I can follow-up at GEPF to check what is causing the delay. I have sent you an email with information on my services. Regards

  1. I got divorced in 2011, was told i must wait till my ex go on pension but yesterday i was told by maintenance court I can claim my 50 percent, what must I do? Please I need some advice. Thanx

  2. I really needed to enquire for the payment to my ex wife gloria thuli manganye i think i might’ve been robbed my pensions numbers 9801**** please investigate it was not supposed to that huge amount because she already claimed some other once

    1. Xpression Assist

      Dear Lucas, please note that I do not work at GEPF nor do I assist with disputes and/or investigations. I suggest you contact GEPF directly with your query. Their offices are currently closed to the public due to the National Lockdown. Regards

    1. Xpression Assist

      Dear GJ Mafotsa, I do not have the Clean break choice form, it is only obtainable from GEPF. Members who had their divorce dealt with in terms of the debt approach and who were divorced before 1 August 2019, have until 22 MAY 2020 to exercise their choice should they wish to remain on the debt approach or move to the service reduction approach. Affected members have been sent communication to exercise their choice. If you have not received such communication please contact their call centre on 0800 117 669 OR email cleanbreakenquiries@gpaa.gov.za to request or submit your Choice Forms.

  3. In case both parties are members of GEPF, one member resigned got pension. Now the member is back with GEPF. what will be divorce percentage.

    1. Xpression Assist

      Dear Maria, depending on your marriage regime you should be able to claim 50% but I suggest you discuss this with your attorney for sound legal advice. Regards

  4. Good day

    Can you please confirm that my 2 nd Clean break option has been attended to and an updated Pension certificate will be issued?

    1. Xpression Assist

      Dear Juan, this is not the GEPF’s website. You are welcome to contact me should you need my assistance with a pending matter. Alternatively please contact GEPF directly.

        1. Xpression Assist

          Good day Peliwe, I can most definitely assist you to lodge your claim successfully. I have sent you an email with further information. Regards Janene

          1. Good day I like to know in case of divorce my gepf will be deducted from retirement benefit or death benefit
            Regard
            Mr Mafojane

          2. Xpression Assist

            Good day Mafojane, please note I do now work at the GEPF but offer a service at a fee assisting clients with their claim. I suggest you contact GEPF directly with your query and get proper answers on their rules and regulations. Regards

    1. Dear John, please note I do not work at the GEPF; I am a private consultant assisting with claims. Once you submitted all the required documents at GEPF, they have 60 days to finalize and pay-out the benefit.

  5. Got divorced in 2020, I was faxed over R70.000 as a non member of GEpf . Am I supposed to be taxed? How do I claim back the money?

    1. Good day Duncan, yes a divorce claim is taxable and the non-member (claimant) is liable for the tax (for divorces after September 2007). Please discuss further tax returns with your tax consultant. Regards

  6. good day

    my husband is gepf. we are currently going through a divorce. please can you advise me if the pension is about maximum 300k for me how much tax will I have to pay on that.

    1. Good day Fazana, unfortunately I cannot confirm how much the tax will be. The following information however was given to me regarding taxation:
      • The first R22 500 is tax free.
      • From R22 501 – R600 000 = 18% tax
      • From R600 001 – R900 000 = R27% tax
      • From R900 001+ = 36% tax

  7. Hey , I recently got divorced and I was wondering how long it’ll take for it to be in my bank account. I submitted all required documents in Sep 2022

    1. Good day Luthando, the GEPF has 60 days to finalize a divorce claim. I can assist by following up on the pending claim to determine what is causing the delay. I have sent you an email with information on how I can be of assistance. Regards, Janene

    1. Good day Vuyani, I can most definitely assist you to lodge your claim at GEPF and ensure it is finalized timeously. I have sent you an email with more information on the service I render. Regards, Janene

    1. Xpression Assist

      Good day Stefaans, the GEPF is currently experiencing a huge backlog and claims are taking longer than usual to finalize. I have sent you an email with information on how I can assist you. Regards, Janene

        1. Xpression Assist

          Good day Eso, I can’t say for certain what is causing the delay but I can follow-up on your behalf to determine the cause. I have sent you an email with more information on how I can assist. Regards, Janene

    1. Xpression Assist

      Good day Khanyisile, you can still claim with the condition that the claim is stipulated in your divorce decree and your ex-spouse is still in service. I have sent you an email with informaiton on how I can assist. Regards, Janene

  8. Khalabayi Chauke

    Good night
    I have 17 years working at government department and i have put in uncontested divorce claim through my lawyer. in a normal circumstances how long does it takes to finalize this claim.

    1. Xpression Assist

      Good day Khalabayi, thank for your query, the GEPF has 60 days to finalize a divorce claim. I have sent you an email with details on how I can assist you to submit your divorce claim. Regards

  9. Hi, i sent a divorce claim to GEPF end of May, i called today and was told there was no letter endorsement or instruction to GEPF where as i did send all the documents with settlement of divorce.and claim form.
    Please advise.

    1. I can assist by following-up at GEPF to determine the “error” noted on the system and then give you feedback on how to rectify it – there’s no need for you to go back to the Call Centre in Cape Town.

  10. Hi there
    Married in Community of property and filed for divorce. What is the calculation for my 50%. Is it 50% of his total pension or 50% of the interest because that’s what my husband says. I don’t trust him.

  11. Good day my divorce decree state that The Defendant is entitled to a 50% of pension interest of the plaintiff held in the GEPF as o date of divorce does it mean that 50% of accumulated resignation is going to be paid out please i need a clarity on that

    1. Good day, I do not work at the GEPF but offer a service assisting clients with their claim. I suggest you contact the GEPF directly or go onto their website for further information. Regards

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