Family Law (Superannuation) Amendment Regulations 2003 (No. 3) 2003 No. 342
EXPLANATORY STATEMENT
STATUTORY RULES 2003 No. 342
ISSUED BY THE AUTHORITY OF THE ATTORNEY-GENERAL
FAMILY LAW ACT 1975
FAMILY LAW (SUPERANNUATION) AMENDMENT REGULATIONS 2003 (No. 3)
Subsection 125(1) of the Family Law Act 1975 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Part VIIIB of the Act provides for the division of superannuation between parties to a marriage on marriage breakdown or divorce.
The Family Law (Superannuation) Regulations 2001 (the Principal Regulations) contain much of the detail of the legislative scheme for the division of superannuation on marriage breakdown or divorce, including provisions for the method for valuing superannuation interests.
The purpose of the Regulations is:
• to clarify that one of the powers in the Principal Regulations enabling methods or factors to be approved for valuing superannuation interests may be exercised to approve in relation to an interest that is made up of a component that is a defined benefit interest and a component that is an accumulation interest; and
• remove the need to remake any approvals made to date under that power.
Details of the Regulations are as follows:
Regulation 1 is formal.
Regulation 2 provides for the commencement of the Regulations on gazettal.
Regulation 3 provides for the amendment of the Principal Regulations by Schedule 1.
Schedule 1
Items 1 to 3: Subregulation 5(1), Subregulation 5(2)
Item 1 replaces the definition of the term `defined benefit interest' in subregulation 5(1) of the Principal Regulations with a definition of the term in new subregulations 5(1) and 5(1A).
The new subregulations re-draw the definition as a consequence of the amendment to subregulation 38(1) made by Item 4. In doing so, it makes it clear that a superannuation interest, as originally intended when the Principal Regulations were made in 2001, is not to be taken to be a defined benefit interest by reason alone that it contains a component that is a defined benefit interest.
Items 2 and 3 make a drafting change to subregulation 5(2) consequential on the insertion of new subregulation 5(1A) by Item 1.
Item 4: Subregulation 38(1)
This item re-draws subregulation 38(1) of the Principal Regulations to clarify that the power in regulation 38 enabling the Minister to approve methods or factors that are to be used to determine the value of a superannuation interest that is a defined benefit interest may be exercised to approve methods or factors to be used for valuing a superannuation interest that is made up of a component that is a defined benefit interest and a component that is an accumulation interest.
Item 5: Subregulation 38(3), note
This item omits the note following subregulation 38(3) of the Principal Regulations, which is included, in a revised form, following new subregulation 38(4) (see Item 6).
Item 6: After subregulation 38(3)
This item inserts a new subregulation 38(4) into the Principal Regulations to remove the need to remake any approvals made to date under regulation 38 of the Principal Regulations. Two of the approvals made under regulation 38, contained in the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003, contain methods for valuing superannuation interests that are made up of a component that is a defined benefit interest and a component that is an accumulation interest.
The item also includes the note formerly at the end of regulation 38 of the Principal Regulations, with revisions as a result of the re-drawing of subregulation 38(1) (see Item 4).
Overview
The Family Law (Superannuation) Amendment Regulations 2003 (No. 3) were enacted to address specific issues in the valuation of superannuation interests within the context of marriage breakdown or divorce, as governed by the Family Law Act 1975. The Family Law Act 1975, administered by the Australian Parliament, was designed to provide for a fair and efficient system for resolving family law matters, including the equitable division of assets. These Regulations aim to ensure clarity in the valuation process for superannuation interests that comprise both defined benefit and accumulation components, thereby facilitating more precise and consistent outcomes in family law proceedings. The policy objective is to streamline the process of valuing complex superannuation interests, thereby enhancing the efficiency and fairness of the family law system.
Scope and Application
The Family Law (Superannuation) Amendment Regulations 2003 (No. 3) applies to all parties involved in the division of superannuation interests under the Family Law Act 1975, particularly in the context of marriage breakdown or divorce. This amendment pertains to the valuation of superannuation interests that comprise both defined benefit and accumulation components. The regulations affect financial institutions, trustees, and individuals who are subject to the Family Law Act. These regulations extend across Australia as they amend Commonwealth legislation. The primary exclusion is that these regulations do not apply to superannuation interests that are not subject to the division provisions under the Family Law Act. The amendment does not introduce new exclusions but rather refines existing provisions. The application of these regulations is further defined and potentially extended through subordinate instruments, which may include specific methods or factors for valuing superannuation interests, as prescribed by the Minister under regulation 38.
Key Provisions
The main operative sections of the Family Law (Superannuation) Amendment Regulations 2003 (No. 3) include the formal regulation (Regulation 1) and the commencement of the regulations upon gazettal (Regulation 2). The substantive amendments are found in Schedule 1, which includes changes to the definition of 'defined benefit interest' in subregulation 5(1) of the Principal Regulations (Item 1) and consequential changes to subregulation 5(2) (Items 2 and 3). Additionally, subregulation 38(1) is re-drawn to clarify the Minister’s power to approve methods or factors for valuing a superannuation interest made up of a defined benefit interest and an accumulation interest (Item 4). The note following subregulation 38(3) is omitted (Item 5), and a new subregulation 38(4) is inserted to prevent the need for remaking previous approvals under regulation 38 (Item 6).
These regulations impose several obligations on parties involved in the division of superannuation interests upon the breakdown of a marriage. Firstly, they mandate that the definition of 'defined benefit interest' is clarified to ensure it encompasses superannuation interests made up of both defined benefit and accumulation components. Secondly, they require the Minister to approve methods or factors for valuing such mixed superannuation interests. The regulations also ensure that previously made approvals under regulation 38 remain valid, thereby reducing administrative burdens and ensuring continuity in the application of the regulatory framework.
The Family Law (Superannuation) Amendment Regulations 2003 (No. 3) do not explicitly state offences, penalties, or consequences for breach. However, the underlying Family Law Act 1975 provides a framework for enforcement. Non-compliance with the Act's provisions, including these regulations, could result in various civil or criminal consequences depending on the nature and severity of the breach. For instance, civil penalties may include fines, and in severe cases, criminal penalties such as imprisonment could be imposed. The exact penalties would be determined by the courts based on the specific circumstances of any breach.