EXPLANATORY STATEMENT
Select Legislative Instrument 2005 No. 69
ISSUED BY AUTHORITY OF THE ATTORNEY-GENERAL
Family Law Act 1975
Family Law (Superannuation) Amendment Regulations 2005 (No. 1)
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 valuing superannuation interests and determining the entitlement of parties when superannuation is divided.
The purpose of the Family Law (Superannuation) Amendment Regulations 2005
(No. 1) (the Amendment Regulations) is to amend the Principal Regulations to narrow the class of superannuation interests in the Queensland Parliamentary Superannuation Fund that are prescribed as percentage-only interests.
Interests that are prescribed as percentage-only can only be split, under Part VIIIB of the Act, by reference to a percentage of future payments to be made to the member spouse. They are also valued in property settlement proceedings under the Act by expert opinion evidence, rather than in accordance with valuation methods set out in the Principal Regulations.
The Queensland Government Superannuation Office requested, before Part VIIIB of the Act commenced in December 2002, that interests in the Queensland Parliamentary Superannuation Fund be prescribed as percentage-only interests as an interim measure while it further considered valuation methods for superannuation interests in the Fund.
Interests in the Queensland Parliamentary Superannuation Fund were prescribed as percentage-only interests by the Family Law (Superannuation) Amendment Regulations 2002 (No. 2).
As part of a package of measures, including amendments to the Parliamentary Contributory Superannuation Act 1970 (Qld) (the Queensland Act) made in 2003, the Queensland Government Superannuation Office subsequently requested the Commonwealth to prescribe a narrower class of superannuation interests in the Fund as percentage-only interests, and to approve, under the Principal Regulations, methods for valuing interests that current members of the Queensland Legislative Assembly, who have accrued future superannuation pension entitlements, have in the Fund.
The Amendment Regulations amends the Principal Regulations to limit the prescription of a superannuation interest in the Queensland Parliamentary Superannuation Fund as a percentage-only interest to:
- an interest held by a member of the Queensland Legislative Assembly who has less than 8 years service as such a member; and
- an interest held by a member of that Assembly who has 8 or more years of service where the interest was subject to a splitting order or agreement under Part VIIIB of the Act while it was a percentage-only interest and that order or agreement has not been terminated, set aside or paid out under amendments made to the Queensland Act in 2003.
Approval of the valuation methods requested by the Queensland Government Superannuation Office for interests in the Fund would be given under a separate instrument – amending the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003 – made under regulation 38 of the Principal Regulations.
The Amendment Regulations refers to the Queensland Act. That Act may be viewed at the following website:
http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/ParliContSupA70.pdf
A copy of the Queensland Act may be purchased from Goprint, through its bookshop, which is located at 371 Vulture Street, Woolloongabba, Queensland (telephone: 07 3246 3399).
Consultation on the content of the instrument was undertaken under section 17 of the Legislative Instruments Act 2003 with the Australian Government Actuary, the Queensland State Actuary and the Queensland Government Superannuation Office, by way of exchange of correspondence and discussions.
Overview
The Family Law (Superannuation) Amendment Regulations 2005 (No. 1) were enacted to amend the Family Law (Superannuation) Regulations 2001, which detail the legislative scheme for the division of superannuation interests between parties on marriage breakdown or divorce under the Family Law Act 1975. The Family Law Act 1975 was established to provide for a unified family law system in Australia, addressing various issues related to the dissolution of marriage, property settlement, and maintenance. The specific problem these regulations aim to address is the valuation and division of superannuation interests, particularly those in the Queensland Parliamentary Superannuation Fund, to align with the changes in the Queensland Parliamentary Contributory Superannuation Act 1970. The policy objective of these amendments is to narrow the class of superannuation interests prescribed as percentage-only interests, thereby affecting how these interests are valued and split in family law proceedings. These regulations were made by the Governor-General in accordance with the authority granted under the Family Law Act 1975 and were developed following consultations with relevant stakeholders including the Australian Government Actuary, the Queensland State Actuary, and the Queensland Government Superannuation Office.
Scope and Application
The Family Law (Superannuation) Amendment Regulations 2005 (No. 1) pertains to the regulation of superannuation interests within the context of marriage breakdown or divorce under the Family Law Act 1975. These regulations specifically target superannuation interests held within the Queensland Parliamentary Superannuation Fund, aiming to refine the classification of these interests as percentage-only interests. The Amendment Regulations modify the existing Family Law (Superannuation) Regulations 2001 to narrow the scope of superannuation interests in the Queensland Parliamentary Superannuation Fund that are considered percentage-only interests. Such interests can only be divided based on a percentage of future payments to be made to the member spouse and are valued through expert opinion evidence rather than the valuation methods outlined in the Principal Regulations. This amendment responds to a request from the Queensland Government Superannuation Office, which seeks to align the treatment of these superannuation interests with updated valuation methods established under the Parliamentary Contributory Superannuation Act 1970 (Qld). The changes are designed to apply to members of the Queensland Legislative Assembly, specifically those with less than eight years of service and those with eight or more years of service whose interests were previously subject to a splitting order or agreement that has not been terminated or set aside. The regulation also references the Queensland Act and indicates that approval of the requested valuation methods will be addressed in a separate instrument.
Key Provisions
The Family Law (Superannuation) Amendment Regulations 2005 (No. 1) amends the Family Law (Superannuation) Regulations 2001 (Principal Regulations) by narrowing the class of superannuation interests in the Queensland Parliamentary Superannuation Fund that are prescribed as percentage-only interests (reg 3). Specifically, these are limited to interests held by a member of the Queensland Legislative Assembly who has less than 8 years of service (reg 3(1)(a)), and those who have 8 or more years of service where the interest was subject to a splitting order or agreement under the Family Law Act 1975 (the Act) while it was a percentage-only interest, and that order or agreement has not been terminated, set aside or paid out under amendments made to the Parliamentary Contributory Superannuation Act 1970 (Qld) (Queensland Act) in 2003 (reg 3(1)(b)). This amendment reflects the Queensland Government Superannuation Office’s request to prescribe a narrower class of superannuation interests as percentage-only interests.
Under the Act, these percentage-only interests can only be split by reference to a percentage of future payments to be made to the member spouse (s 125(1)). Additionally, these interests are valued in property settlement proceedings by expert opinion evidence, rather than using the valuation methods set out in the Principal Regulations. The Amendment Regulations do not alter the way these interests are valued; instead, they focus on which interests qualify as percentage-only.
The Amendment Regulations impose obligations on the parties and entities they govern by specifying which superannuation interests in the Queensland Parliamentary Superannuation Fund are eligible to be treated as percentage-only interests for the purposes of the Act. This eligibility directly affects the division of superannuation during property settlement proceedings. The regulations ensure that only certain superannuation interests are subject to the percentage-based division method, thereby providing clarity and consistency in the application of the Act.
There are no specific offences, penalties, or civil/criminal consequences outlined in the Amendment Regulations for non-compliance with the prescribed definitions of percentage-only interests. However, any failure to adhere to the regulations in the division of superannuation could lead to legal disputes and the need for court intervention to determine the correct application of the Act. Courts may also be involved in cases where the valuation of percentage-only interests is contested, potentially leading to additional costs and delays in property settlement proceedings.