Simpson & Simpson
[2014] FamCA 521
•16 July 2014
FAMILY COURT OF AUSTRALIA
| SIMPSON & SIMPSON | [2014] FamCA 521 |
| FAMILY LAW – PROPERTY – Agreement reached between the parties as to division of the non-superannuation matrimonial assets FAMILY LAW – SUPERANNUATION – What entitlement does each party have to the other parties’ superannuation entitlements – Whether the superannuation entitlements were accrued during the marriage and what contributions did each party make to those funds if accrued during the marriage – Where the husband has a Public service invalidity defined benefit pension and a member contribution – Where the husband is retired from public service on medical grounds |
| Family Law Act 1975 (Cth) ss 72, 74, 75(2), 79, 90MT(2), 90MZD |
| Bevan & Bevan [2013] FamCAFC 116 Crawford & Crawford (2013) 48 Fam LR 539 Stanford v Stanford (2012) 247 CLR 108 Trott & Trott (2006) FLC 93-263; DJ & AJ (2006) FLC 93-289 |
| APPLICANT: | Ms Simpson |
| RESPONDENT: | Mr Simpson |
| FILE NUMBER: | PAC | 4480 | of | 2013 |
| DATE DELIVERED: | 16 July 2014 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 20 June 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Campton |
| SOLICITOR FOR THE APPLICANT: | Mills Oakley Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Levet |
| SOLICITOR FOR THE RESPONDENT: | Sarah Bevan Family Lawyers |
Orders
BY CONSENT IT IS ORDERED THAT:
That the wife and the husband’s litigation guardian shall forthwith do all things and give all instructions as are necessary to cause the balance of proceeds of sale held on trust for the husband and the wife to be applied in the following priority:-
1.1In payment of the sum of $25,000 to Ms B, the wife’s grandmother, in discharge of her loan;
1.2In payment of the sum of $18,000 to Mr C, the wife’s father, in discharge of his loan;
1.3In payment of the balance to the wife.
That save and except as to any superannuation and any disability benefit entitlements, each party shall retain as against the other all property in their respective possession or control as at the date of these Orders.
THE COURT FURTHER ORDERS THAT:
That in accordance with section 90MT(1)(b) of the Family Law Act 1975 (Cth) (“the Act”), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of the Respondent husband from his interest, including his interest in the form of the pension benefit and his interest in the form of a preserved member benefit, in The Public Service Superannuation and Benefits Scheme, the Applicant wife is entitled to be paid by the Trustee of The Public Service Superannuation and Benefits Scheme eighteen (18) per cent of the splittable payment and there shall be a corresponding reduction in the amount the Respondent husband would be entitled to receive but for these Orders.
That the Trustee of The Public Service Superannuation and Benefits Scheme do all such acts and things and sign all such documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation Regulations) 2001 (Cth) the entitlement awarded to the Applicant wife in the immediately preceding clause of this Order; and
(b)Pay the entitlement whenever the trustee makes a splittable payment from the Respondent husband’s interest in The Public Service Superannuation and Benefits Scheme.
That these Orders have effect from the operative time and the operative time is the fourth business day following service of a copy of the sealed Orders on the Trustee of The Public Service Superannuation and Benefits Scheme.
That the parties do all such things and sign all such documents as may be necessary to give effect to these Orders.
That the husband’s application for spouse maintenance be dismissed.
All outstanding applications are dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Simpson & Simpson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 4480 of 2013
| Ms Simpson |
Applicant
And
| Mr Simpson |
Respondent
REASONS FOR JUDGMENT
As a consequence of injuries whilst on overseas public service the husband in these proceedings, who is presently aged 39, has a significantly diminished life expectancy. This is by reason of a combination of psychiatric and mental illnesses and the treatment required for same. The husband has additional risks associated with chronic depression in terms of increased suicidality from deliberate and inadvertent overdoses of psychiatric and pain relieving medications.
On 17 March 2014 the husband’s mother was appointed his Case Guardian for the purposes of the proceedings.
At present he is in receipt of a public service pension and it is that pension that is the substance of dispute as between the Applicant wife and the Respondent husband in these property settlement proceedings.
The parties’ commenced cohabitation in 2000, married in 2001 and separated on 25 June 2012. There are two children of the marriage, presently aged seven and a half and six, with both children residing with the wife.
The wife is presently in full-time employment earning about $75,000 per annum. However, as a consequence of the parties not accumulating significant assets during the relationship, she and the children reside in rented premises and she struggles to meet the day-to-day commitments of herself and the children.
The parties agreed that the present matrimonial pool available for consideration comprised the following:
Assets:
Joint Net proceeds of the matrimonial home $51,116
Wife Motor vehicle 1 $28,450
Wife NAB bank account $ 844
Wife Jewellery $ 5,000
Wife Household contents $20,000
Husband NAB bank account $ 3,600
Husband Motor vehicle 2 $ 6,000
Husband Household contents $10,000
Husband Gun collection $10,000
$135,010
Liabilities:
Joint Debt to Mr C $18,000
Joint Debt to Ms B $25,000
Wife Various credit card debts $25,741
$68,741
Superannuation
Wife Energy super $ 122,815
Wife NGS super $ 11,314
Husband Public Service defined benefit pension $1,318,350
Husband Public Service member contribution $ 51,861
$1,504,340
At the commencement of trial the parties had agreed to a division of the non-superannuation asset pool as a matter of practical utility and the Court was invited to make orders by consent providing, in summary, as follows:
a)That the net proceeds of sale held on trust be paid as follows:
i)In payment of $25,000 to Ms B in discharge of her loan;
ii)In payment of $18,000 to Mr C in discharge of his loan;
iii)In payment of the balance to the wife.
b)That save and except as to any superannuation and any disability benefit entitlements, each party shall retain as against the other or property in their respective possession or control as at the date of these orders.
The Court was invited to consider the parties’ respective superannuation entitlements without regard to what the parties had agreed as to division of the non-superannuation pool.
The Applicant wife as to superannuation sought, in summary, the following orders:
a)That there be a splitting order as to 50 per cent of the husband’s entitlement in the Public Service Superannuation and Benefit Scheme (PSBS) to include both the periodic pension and defined benefit member contribution in favour of the wife;
b)That the operative time for the splitting order be the date of the order is made; and
c)That, in the alternative, the husband pay or cause to be paid to the wife a fortnightly amount representing one half of his net fortnightly pension entitlement from the PSBS.
The husband for his part sought the following orders, in summary, in relation to the parties’ respective superannuation entitlements:
a)That there be a splitting order as to 50 per cent of the wife’s entitlement in the NGS Super in favour of the husband;
b)That there be a splitting order as to 50 per cent of the wife’s entitlement in Energy Super in favour of the husband;
c)That there be a splitting order as to 50 per cent of the husband’s entitlement in the husband’s defined benefit member contribution component in the PSBS fund in favour of the wife;
d)That there be no splitting order in relation to the husband’s periodic pension entitlement in the PSBS fund; and
e)That in the event that there is a splitting order in relation to the husband’s periodic pension entitlement in the PSBS fund, the wife pay the husband spousal maintenance in a sum equivalent to the amount of the reduction in the husband’s pension as a consequence of the splitting order.
It is common ground between the parties that as a consequence of advices received from the Family Law Unit of the PSBS fund that any splitting order made in relation to the husband’s entitlements in the fund would apply equally to both the pension and the member accumulation benefit component.
It is also common ground between the parties that any split in relation to the defined benefit component in favour of the wife would result in either the wife as the non-member spouse being able to roll out any resultant sum to her own fund subject to any requirement that portion of that sum be preserved in the PSBS for the wife as non-member spouse until she reaches the age of 55.
It is further agreed that any split of the husband’s invalidity pension would result in the wife as the non-member spouse becoming entitled to a PSBS associate pension with effect from the operative time with such pension payable for the life of the non-member spouse. Such pension is non-commutable and has no reversionary component in that the associate pension ceases to be paid on the death of the wife as non-member spouse.
It is also agreed that the pension payable to the husband at present and if a splitting order is made any portion of that pension payable to the wife forms part of both parties’ taxable income for tax purposes.
Background
As a consequence of the husband being in receipt of an invalidity pension, it is necessary to give brief consideration to the background circumstances leading up to the receipt of that benefit.
Prior to the commencement of the parties’ cohabitation in March 2000 the husband had been employed overseas and had been in the public service since July 1994. Whilst overseas the husband was involved in a motor vehicle accident and suffered a back injury as a result of the vehicle in which he was travelling rolling.
The parties commenced living together in D Town, Queensland with the husband’s employment overseas ending in early March 2002. During this second employment the husband was again involved in a further motor vehicle accident.
Subsequently and in August 2002 the parties moved to Sydney before returning to Brisbane to reside in February 2005. Whilst in Sydney in mid-2004 the husband went on exchange in the Country E for three months.
Following the parties commencing to reside in Brisbane the husband was again employed overseas in May 2006 for six months. The husband returned to Australia in November 2006.
The wife after commencing to reside in Brisbane was diagnosed with breast cancer and commenced radiotherapy in 2005. Following the birth of the second child the wife in April 2009 underwent a bilateral mastectomy. At present she is to be reviewed each five years. As a consequence of this health issue the wife is unable to obtain life insurance, save for insurance that excludes death from any form of cancer.
The first child of the marriage was born in 2007. The wife gradually returned to full-time work following the birth of this child.
The husband was employed overseas again in September 2007 and returned just prior to the birth of the youngest child in 2008. On the husband’s return he was suffering a bulging disc in his back. He thereafter had numerous medical procedures and in 2008 underwent a laminectomy and discectomy. In 2011 he had a spinal fusion. It was these disabilities that led to him being subsequently medically retrenched.
Whilst the husband was employed overseas he received supplementary tax-free income payments that were applied for the benefit of the family.
The second child of the marriage was born in 2008 and the wife again returned to full-time work gradually following the birth of this child.
In September 2009 the husband retired on medical grounds from the public service.
Thereafter, the husband commenced to receive his invalidity pension benefit. His defined benefit lump sum component is preserved until he reaches the age of 60 years.
The husband’s invalidity pension benefit is not commutable to a lump sum and his eligibility to receive such benefit is subject to review until such time as he attains the age of 60 years. It is common ground between the parties that there is little prospect that his eligibility for the invalidity pension will be subject to an adverse review.
In the event of the husband’s death and that he is survived by an eligible spouse, that spouse will receive 67 per cent of the invalidity pension payments during her lifetime. In the event of the husband’s death with no surviving eligible spouse then the children of the marriage will receive a total of 80 per cent of his invalidity pension until the age of 25 in the event they are full-time students until that age.
Subsequent to the husband’s medical discharge, his initial invalidity pension was $30,365 per annum. He was later reassessed and his current pension benefit is approximately $66,825 per annum.
As a consequence of the chronic pain from his back injury and being prescribed strong pain medication, the husband became addicted to opiates. He has overdosed on his prescription drugs on numerous occasions and has continued to overdose subsequent to separation. He was admitted to hospital following post-separation overdoses in October 2013 and November 2013. In January 2014 the husband underwent further remedial back surgery but the surgery was not successful in relieving his chronic pain.
The husband also suffers from post-traumatic stress disorder arising from his active service in the Public service, his injuries and pain and addiction to medication.
In late May 2012 the husband moved to reside with his mother on the F Town, Queensland, returning to live in the matrimonial home for a period from about December 2012.
The parties separated in June 2012 and in October 2012 the wife and the children moved to Sydney so that the wife had support of her extended family.
There was subsequently procrastination between the parties in relation to mortgage payments and sale of the matrimonial home and it was not until the wife sought interim orders as to sale that the property was placed on the market and subsequently sold in January 2014. The husband stopped making three-quarters of the mortgage payments on the home in October 2013 and at the time of sale significant arrears in council and water rates had accrued.
At the time of separation the wife was working for G Pty Ltd on an income of about $130,000 per annum.
Subsequent to separation and in January 2013 the wife commenced work in Sydney on a full-time basis as head of marketing for a Sydney private school earning about $80,000 per annum after tax. In addition, she receives child support payments from the husband, a small family tax benefit per week and about $12 per week from the Government.
Subsequent to separation the wife has had the sole burden of the care of the parties’ two children, with the husband only seeing the children briefly in September 2013 and again in January 2013.
The husband presently resides with his mother, aged 71, in F Town in Queensland and substantially his medical and medication expenses are funded by the Government. The husband asserts that it is not sustainable for him to remain in his mother’s care on a full-time basis and that he will need to make provision into the future for additional care costs and appropriate rental costs which he estimates to be in the vicinity of $350-$400 per week.
The Superannuation issue
Given that the parties have dealt with the non-superannuation pool by agreement, the question for determination then is what are the parties’ respective entitlements in relation to superannuation?
It is contended on behalf of the Respondent husband that it is appropriate for the Court not to deal simply with the property of the parties on a two pools approach, that is a non-superannuation asset pool and a superannuation asset pool, but to adopt a three pools approach with the non-superannuation asset pool as the first pool, the wife’s accumulation superannuation benefits as the second pool and the husband’s entitlements under the PSBS as the third pool.
The Applicant wife took no issue with this approach and, indeed, made submissions that clearly recognised the different characteristics as to contribution relating to the two discrete superannuation pools.
The approach to the determination of an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) is set out in Stanford&Stanford (2012) 247 CLR 108 and that decision was the subject of detailed consideration by the Full Court in Bevan & Bevan [2013] FamCAFC 116.
The Court should firstly identify the present assets, financial resources and liabilities of the parties.
The Court should then consider whether, having regard to the circumstances before it, it would be unjust and unfair not to make orders for alteration of the property interests of the parties having regard to the provisions of s 79(2) of the Act. Both parties seek disparate orders in relation to property, in particular in relation to the division of the superannuation entitlements. It is appropriate that orders be made to resolve the dispute.
The Court can then proceed to consider the contributions by each of the parties as contemplated by s 79(4)(a) – (c) of the Act.
Having determined the contribution-based entitlements of the parties, the Court can then consider the various factors set out in s 75(2) of the Act and whether any further adjustment to the parties’ contribution-based entitlements is appropriate.
The Court is then required to consider the justice and equity of the proposed orders and whether in all the circumstances the orders to be made are appropriate.
The parties have resolved by agreement property issues relating to the non-superannuation asset pool as referred to above.
Superannuation
The superannuation entitlements of the parties are as follows:
Wife Energy Super $ 122,815
Wife NGS super $ 11,314
Husband Public service defined benefit pension $1,318,350
Husband Public service member contribution $ 51,861
$1,504,340
The Wife’s Superannuation
The total value of the wife’s accumulation superannuation interests is $134,129.
At the commencement of cohabitation the wife had just completed her tertiary studies. There is no evidence as to the value of any accumulated superannuation by the wife as at the date of cohabitation. It is to be inferred that any superannuation interest at that time held by the wife was negligible.
During cohabitation the wife accumulated superannuation as a consequence of her various terms of employment up to separation and thereafter to date of trial.
From her present gross salary of $2,213 per week the wife contributes $203 per week to her superannuation to the Non-Government Schools Superannuation Fund. She has been a member of that fund since the commencement of her present employment post-separation when she took up a salaried position with a private school. Accordingly, her entitlement in this fund of $11,314 is solely as a consequence of her own contributions through employer and after-tax contributions post-separation.
The strong inference from the history of the relationship set out above is that the overwhelming portion of the wife’s entitlement in Energy Super accrued during cohabitation with a small component representing income earned in the fund post-separation.
The wife’s interest in the Energy Super fund accumulated in circumstances where, notwithstanding her primary care for the children during periods when the husband was employed overseas and when he was incapacitated by injury, particularly after his voluntary resignation from the public service, she continued to work and accumulate superannuation. In such circumstances, the wife’s contributions to this superannuation fund should be seen as superior to those of the husband.
The wife’s NGS superannuation benefit represents about 8.5 per cent of her overall superannuation entitlements.
Overall, contributions to the wife’s superannuation benefits are assessed as 70 per cent to the wife and 30 per cent to the husband.
The Husband’s Superannuation
The husband’s superannuation comprises of the following components:
Husband Public service defined benefit pension $1,318,350
Husband Public service member contribution $ 51,861
The Public service Member Contribution
At about the time of cohabitation, the husband’s public service member contribution interest in the PSBS scheme was $53,849. This interest comprised an employee benefit of $40,088 that represented the husband’s salary at that time multiplied by an accrued benefit multiple relevant to his period of service at that time. The remainder of his benefit was his member benefit of $13,761 that comprised his contributions from salary. It is not contended that the wife made any contribution to this benefit available to the husband at the time of cohabitation.
Over the period of cohabitation, the husband’s public service member contribution further accumulated to the date of the husband’s retirement from the Public service in September 2009 to $47,318. What was previously the husband’s employee benefit was subsumed into the pension benefit received by him after retirement.
Shortly after retirement, the husband received the non-preserved portion of his member contribution of $10,268, representing his pre-1999 benefit accrued to June 2009. These funds were applied by him for matrimonial purposes. As at September 2009 the balance of the husband’s member benefit was $37,050. At the time of separation this amount had increased to $43,882 and at trial had further increased to $51,861.
The husband’s present member benefit, as a consequence of his pre-cohabitation benefit being already paid out the present balance of the fund, accumulated during cohabitation. The balance accrued as a consequence of contributions from his salary during the cohabitation and until separation and thereafter as a consequence of interest received. Having regard to the circumstances of the cohabitation referred to above, it is appropriate to regard the party’s contributions to the present member benefit as equal.
The Husband’s Defined Benefit Pension
The PSBS scheme is a defined benefit superannuation plan for public service employees and is funded by the Consolidated Revenue Fund.
The pension entitlement is calculated on the basis of the product of two factors – final average salary and the accrued benefit multiple. The accrued benefit multiple is a multiple which is increased according to the years of service and when applied to the final average salary results in a final benefit.
Where an employee becomes unable to continue in service by reason of incapacity, the multiple just before incapacity may not be very large as a consequence of a short period of service. In this case, at the time of incapacity the husband had been in service for about 15 years. The PSBS rules will increase the multiple assuming that the employee would have continued in the service to retirement age. That increased multiple is then applied to the final average salary to obtain the benefit. This has occurred in the husband’s case with the applicable multiple being the multiple that would have applied had he remained in employment until the age of 60. By applying that multiple to his salary at the date of his voluntary retirement from service, a pension payment became payable, which as at 22 August 2012 was $65,188 per annum and at trial was $67,895 per annum.
The husband is subject to regular medical reviews up to the age of 55, but it is common ground that there will be no change to his invalidity classification into the future.
At age 60 the husband’s pension benefit ceases to be paid as an invalidity benefit and becomes simply a superannuation pension benefit. He is unable to commute the pension benefit to a lump sum.
The husband’s present invalidity benefit is subject to the normal incidence of taxation, but upon attaining the age of 60, the husband obtains the benefit of a 10 per cent tax offset in relation to the benefit thereafter being received.
The husband’s interest in the PSBS scheme is in the payment phase. Pursuant to the requirements of s 90MT(2) of the Act, a valuation of the husband’s interest was obtained. The valuation was undertaken in relation to fund-specific factors approved in relation to the PSBS scheme. The valuation so arrived at and agreed for the purposes of these proceedings is $1,318,350.
Notwithstanding the valuation arrived at by applying the provisions of the legislation, the nature, form and characteristics of the husband’s pension needs to be considered in evaluating the party’s contributions to that pension and in determining what orders are ultimately just and equitable (See Trott & Trott (2006) FLC 93-263; DJ & AJ (2006) FLC 93-289; Wheeldon & Wheeldon [2011] FamCA 40; Semperton & Semperton (2012) 47 Fam LR 626; and Crawford & Crawford (2013) 48 Fam LR 539, Lane & Lemott [2013] FamCA 604).
The husband is presently aged 39. The invalidity nature of his pension entitlement will continue until he attains the age of 60, in 21 years’ time, and thereafter, the pension will lose its invalidity characteristic and become a superannuation pension indexed for the life of the husband. The husband’s pension stream, no matter which characteristic is attached to it, is incapable of commutation.
A consequence of any splitting order can only be that a percentage of the husband’s pension entitlement is thereafter paid as a periodic payment to the wife with such payment comprising part of her taxable income.
The authorities referred to above recognise the different qualities of contributions made by the non-member spouse in respect of the invalidity and non-invalidity component of a pension stream. The contributions of the non-member spouse in relation to an invalidity component have been regarded as inferior to those of the member spouse where the pension substitutes for current income pending retirement.
The husband, before invalidity resignation, was in the PSBS scheme for 15 years.
For about two-thirds of that period he was cohabiting with the wife. Over that period in normal circumstances, the wife in her role within the home, particularly in circumstances where there were young children and the husband was absent from the home during periods of employment overseas, would have been regarded as making a significant contribution to the accumulation of the husband’s superannuation benefits.
The husband was in the public service for 15 years during which time he made superannuation contributions from salary, as referred to above, in the other component of his benefit. In relation to the pension aspect of his benefit, his length of service is only one component of the calculation leading to payment of the pension. The formula comprises a multiple of his salary at resignation and the salary multiple to be applied was inflated as though he had been employed until the age of 60, some 21 years hence.
It is to be inferred that the wife’s role within the home and with the children facilitated to some extent the husband remaining in service. It is to be inferred that over his years of service his salary increased from the time of cohabitation.
Having regard to the above considerations contributions to the husband’s pension are assessed at 20 per cent to the wife and 80 per cent to the husband.
Superannuation Overview
As a consequence of the contribution findings set out above, the parties contribution-based entitlements in relation to superannuation can be summarised as follows:
Wife Husband
Wife’s Super: $ 93,890 (70 per cent) $ 40,238 (30 per cent)
Husband:
Member Benefit $ 25,930 (50 per cent) $ 25,930 (50 per cent)
Pension $263,670 (20 per cent) $1,054,680 (80 per cent)
$383,490 $1,120,848
The Subjective Factors
The wife is 35 years of age and the husband 39 years of age. The wife has previously suffered from breast cancer, but it appears that she is in remission and subject to 5 yearly reviews. The husband is in poor health circumstances both physically and psychologically.
It is not contended that the wife is unable to continue her full-time employment into the future. It is agreed that the husband will not return to employment. The wife is in receipt of a gross annual salary of approximately $115,000. Her income will be superior to that of the husband.
The husband’s invalidity pension has been considered above as a notional asset with a capitalised value. The husband’s income otherwise comprises a Government benefit of $626 per week. The modest property pool has been referred to above and has been divided by agreement by the parties. Otherwise, their property consists of the superannuation benefits considered above.
The wife has the ongoing care of the two children of the marriage, who are now aged seven and six. The husband has had minimal contact with the children since separation, indeed, on only two occasions. He professes an intention to resume his relationship with the children once his health circumstances improve. Regrettably, that appears to be a remote prospect. Thus, the parenting burden in relation to the children of the marriage will fall upon the wife for a significant period of years into the future.
The wife’s income comprises at present her gross salary of $2,213 per week, a family tax benefit of $52 per week, child support of $175 per week and a small Government benefit of $25 per week, in total $2,465 per week. Her commitments necessary to enable her to support herself and the children are as follows:
Tax $ 621
Rent $ 635
Superannuation contribution $ 203
Health insurance $ 58
Contents and car insurance $ 26
Car registration $ 20
Credit card payments $ 140
Living and household expenses $1,605 (Part N)
$3,308
The wife was not cross-examined in relation to her asserted weekly expenses.
Despite her appearing to have a significant shortfall of income against expenses since moving to Sydney, she has a small amount of funds at bank and credit card debt of about $25,000. At separation, she receive a severance payment of $37,410 that was applied to payment of a credit card debt, legal expenses and relocation expenses with a balance of about $15,000 applied to living expenses for herself and the children. The incurring of credit card debt and expenditure of the capital sum explain, to an extent, the shortfall in her income as against her assessment of expenses. A debt to her father was incurred for legal fees and her rental bond.
It is of note that she continues to make, after tax, superannuation contributions of $203 per week. The inference is that her asserted expenses are more a reasonable wish list than an accurate representation of actual expenditure.
The husband’s income presently comprises his Government benefit of $626 per week and his invalidity pension payments of $1,304 per week, in total $1,930 per week.
His commitments for his necessary support are set out in his Financial Statement. He was not cross-examined in this regard. Those commitments are:
Tax $ 399
Car rego and insurance $ 19
Child support $ 226
Storage expenses $ 105
Living and household expenses $ 340
$1,089
An unexplained figure of $615 as to “living expenses” is included in his Financial Statement. This sum is identical to the income of his mother referred to in paragraph 51 of his affidavit. His detailed Part N living expenses are set out in that document and total $340. The lesser figure, being an itemised sum, has been adopted.
The husband gives evidence that he would like to live independently in rented premises of his own. His health circumstances certainly contraindicate that circumstance. At present, there is a significant surplus of income over expenditure, more than sufficient to allow him to meet his expenses even if he was paying rent at some time into the future.
Neither party has the responsibility of supporting any other person.
The parties’ respective superannuation entitlements and the husband’s entitlement to a government benefit has been considered above.
Regrettably, as a consequence of there being no significant accumulation of assets over the relationship, the wife resides of necessity in rented premises and the husband with his mother.
The wife fashions her property claim as to superannuation in the alternative either as to a splitting order as to 50 per cent of the husband’s superannuation interests or an injunction causing the husband to pay to her one half of his net fortnightly pension entitlement. As a splitting order is to be made reflecting her entitlement with a consequent payment to the wife direct by the fund there is no need for the injunctive relief sought.
The husband, on the other hand, seeks an order for spousal maintenance to the extent that his invalidity pension is reduced by any splitting order. Clearly, that contention awaits a determination as to his capacity to reasonably support himself once his overall income circumstances are known.
It is not contended by either party that a payment of maintenance to the other would increase that parties’ earning capacity or facilitate that party undertaking a course of education or training.
The wife is in full-time employment having after separation moved to Sydney. It is not contended by her that the marriage has affected her earning capacity. The husband’s present circumstances solely relate to his injuries and not as a consequence of the marriage.
Neither party is cohabiting with another person.
As to proposed property orders, the parties themselves have, as a matter of utility, resolved the issue as to the non-superannuation pool. The wife will receive a small capital sum, offset mostly by her accumulated debt.
Otherwise, the Court has above made findings as to the contribution-based entitlement of each of the parties in relation to the superannuation assets. The result of such entitlement is that the husband will continue to receive a significant invalidity pension until the age of 60 and, thereafter, a superannuation pension indexed for life.
The wife is entitled to a splitting order in relation to the husband’s pension with a consequent reduction in his pension entitlement. Such a payment will continue for her lifetime. A consequence of such an order is that an identical percentage is split to the wife from the husband’s capital preserved member benefit. After the split of the husband’s superannuation, the superannuation pool would be:
Wife Husband
Wife’s Super: $ 93,890 (70 per cent) $ 40,238 (30 per cent)
Husband:
Member Benefit $ 10,372 (20 per cent) $ 41,488 (80 per cent)
Pension $263,670 (20 per cent) $1,054,680 (80 per cent)
$367,932 $1,136,406
However, there is no evidence before the Court that notice has been afforded to the trustee of the wife’s superannuation fund in relation to the splitting orders sought by the husband as against the wife’s funds as required by s 90MZD of the Act. Accordingly, it is not open to the Court to make the orders sought by the husband in relation to the wife’s funds.
The result sees the wife requiring a further adjustment of $15,578 in her favour to make up her contribution-based entitlement. This can be offset against the husband’s notional entitlement to a split from the wife’s fund leaving a balance of $24,660 splittable to him. This represents about 2 per cent of the husband’s overall superannuation entitlements. By reducing the split in relation to the husband’s superannuation in favour of the wife by 2 per cent, the following result is achieved:
Wife Husband
Wife’s Super: $134,128 (100 per cent) $0
Husband:
Member Benefit $ 9,334 (18 per cent) $ 42,525 (82 per cent)
Pension $237,303 (18 per cent) $1,081,047 (82 per cent)
$380,765 $1,123,572
This result sufficiently approximates the parties’ contribution-based entitlements.
Both parties will retain capital preserved superannuation amounts. The wife will have no entitlement to access to her funds, except in a case of hardship, until her normal vesting date many years into the future. Similarly, the husband will be unable to access his capital superannuation funds until his normal vesting date or in circumstances of hardship.
The wife will receive a split of the husband’s pension equating to about $235 per week, with the husband suffering a consequent reduction in his pension.
The husband presently pays child support for the children. There will be a modest reduction in his liability as a consequence of the split of his pension, but the wife will receive a larger steady pension stream in lieu.
It is common ground that the husband has a significantly diminished life expectancy. In the event of his untimely death, either the wife, in the event that the husband does not re-partner or the parties divorce, or the children will have an expectancy as to part of his pension entitlement.
The orders proposed will have no effect on the “earning capacity” of the wife, who will continue in the full-time workforce. The husband will continue to receive pension entitlements, subject to a small diminution.
In considering the above matters, on balance there should be no further adjustment to the contribution-based entitlements of the parties.
The parties having dealt with the non-superannuation pool by agreement, it is just and equitable and appropriate that a splitting order be made in relation to the husband’s superannuation interest to give effect to the outcome contemplated in [100] –[102] above.
Orders will be made accordingly.
Spouse Maintenance
Section 74(1) of the Act provides:
In proceedings with respect to the maintenance of a party to a
marriage, the Court may make such order as it considers proper for
the provision of maintenance in accordance with this Part.Section 72(1) of the Act provides:
A party to a marriage is liable to maintain the other party, to the
extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate
gainful employment; or(c) for any other adequate reason, having regard to any relevant matter referred to in sub-section 75(2).
The s 75(2) considerations have been considered above in detail.
The husband sought an order to as it were compensate him from any reduction in his pension entitlement. That order may only be available to him if he can demonstrate he could not support himself adequately otherwise.
A consideration of the husband’s circumstances after the proposed splitting order does not lead to the conclusion he is unable to support himself adequately. Indeed, he has, after a reduction in his pension of $235 per week, a surplus of about $1,232 per week before prospective rent.
The husband’s application for a periodic spouse maintenance order is thereby dismissed.
I certify that the preceding one hundred and eighteen (118) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 16 July 2014.
Legal Associate:
Date: 16 July 2014
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