Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2010

Administered by Attorney-General's Department

Legislation au F2010L01500 In force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

FAMILY LAW (SUPERANNUATION) (INTEREST RATE FOR ADJUSTMENT PERIOD) DETERMINATION 2010

 

ISSUED BY AUTHORITY OF THE AUSTRALIAN GOVERNMENT ACTUARY

 

 

In this instrument the Australian Government Actuary makes a number of determinations under regulation 45D of the Family Law (Superannuation) Regulations 2001 (the FLS Regulations) relating to the adjustment of entitlements of divorced or separated spouses under certain orders or agreements splitting particular kinds of future superannuation benefits made in property settlements under the Family Law Act 1975 (the Act).

 

The determinations relate to orders or agreements providing for a base amount split of future superannuation benefits, one of two kinds of splits that can be made under the Act of most types of superannuation, payable in respect of a defined benefit superannuation interest or an interest in a self managed superannuation fund. 

 

Under a base amount split, a base amount is:

 

  • allocated by the court before making an order; or
  • specified in the agreement by the spouses;

and is then adjusted, on an annual basis (or for a part year, where necessary), until:

  • superannuation benefits are payable to the spouse – the member spouse – who has the superannuation interest; or
  • the member spouse’s interest is split, at some earlier time, under the Superannuation Industry (Supervision) Regulations 1994, the Retirement Savings Regulations 1997, or pursuant to the governing rules of the relevant superannuation fund or scheme in accordance with regulation 14G of the FLS Regulations. 

The entitlement of the non-member spouse for whose benefit the order or agreement has been made, when any of those events occurs, is linked to the adjusted base amount under the order or agreement at that time.

A defined benefit superannuation interest is one, essentially, where the benefits payable in respect of the interest are linked to the member’s period of membership and salary on cessation of membership of the fund or scheme in which the interest is held.

A self managed superannuation fund is a fund with fewer than 5 members that satisfies certain conditions under the Superannuation Industry (Supervision) Act 1993.

Where the interest that is subject to an order or agreement is a defined benefit superannuation interest or an interest in a self managed superannuation fund, regulation 45D of the FLS Regulations provides for the Australian Government Actuary to determine:

  • the interest rate for the adjustment of a base amount for any 12 month adjustment period that is a financial year (subregulation 45D(3));
  • the method by which the interest rate is to be calculated for any adjustment period that is less than 12 months that begins and ends within a financial year (subregulation 45D(4)); and
  • the method by which the interest rate is to be calculated for any adjustment period that begins in one financial year and ends in the following financial year (subregulation 45D(6)).

In paragraph (a) of the instrument, the Australian Government Actuary determines, under subregulation 45D(3) of the FLS Regulations, that the interest rate is 0.083 where the adjustment period is the financial year beginning on 1 July 2010.  This rate is 2.5 percentage points above the percentage change in the original estimate of full-time adult ordinary times earnings for all persons in Australia as published by the Australian Bureau of Statistics for the year ending with the February 2010 quarter.

In paragraph (b) and Schedule 1 of the instrument, the Australian Government Actuary determines, under subregulation 45D(4) of the FLS Regulations, the method for calculating the interest rate where the adjustment period is less than 12 months and begins and ends in the 2010/2011 financial year.  The method provides for the calculation of a rate by reference to a rate that is 2.5 percentage points above the percentage change in the original estimate of full-time adult ordinary times earnings for all persons in Australia as published by the Australian Bureau of Statistics for the year ending with the February 2010 quarter.

In paragraph (c) and Schedule 2 of the instrument, the Australian Government Actuary determines, under subregulation 45D(6) of the FLS Regulations, the method for calculating the interest rate where the adjustment period is exactly 12 months and begins in the 2009/2010 financial year and ends in the 2010/2011 financial year. 

In paragraph (d) and Schedule 3 of the instrument, the Australian Government Actuary determines, under subregulation 45D(6) of the FLS Regulations, the method for calculating the interest rate where the adjustment period is less than 12 months and begins in the 2009/2010 financial year and ends in the 2010/2011 financial year.

The methods determined under subregulation 45D(6) of the FLS Regulations provide for the calculation of rates by reference to the following rates:

  • a rate that is 2.5 percentage points above the percentage change in the original estimate of full-time adult ordinary time earnings for all persons in Australia as published by the Australian Bureau of Statistics for the year ending with the February 2009 quarter; and
  • a rate that is 2.5 percentage points above the percentage change in the original estimate of full-time adult ordinary time earnings for all persons in Australia as published by the Australian Bureau of Statistics for the year ending with the February 2010 quarter.

In November 2009, the Australian Bureau of Statistics released revised estimates of average weekly earnings.  The retrospective revisions affected the original estimate average weekly earnings series which are used in calculating the interest rates for family law purposes.  In particular, the annual percentage change in full-time adult ordinary time earnings to February 2009 was decreased from 5.7 to 5.6.  This revision would potentially affect both the 2009 and 2010 Determinations.  Given the administrative cost and confusion that a retrospective adjustment to the 2009 Determination would cause, there is no intention to revise the interest rate determined for the 2009/10 financial year.

Consultation on the content of the instrument was undertaken under section 17 of the Legislative Instruments Act 2003 with the Attorney-General’s Department by way of exchange of correspondence and discussions.

 

Overview

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2010 was enacted to address the need for consistent and fair adjustment of superannuation entitlements in family law property settlements. Issued under the authority of the Australian Government Actuary, this instrument provides the necessary interest rates and calculation methods for adjusting base amounts in base amount splits of future superannuation benefits. These splits are made in property settlements under the Family Law Act 1975 and involve defined benefit superannuation interests or interests in self-managed superannuation funds. The policy objective is to ensure that the adjustments are made using a transparent and predictable methodology, taking into account the changes in full-time adult ordinary time earnings as published by the Australian Bureau of Statistics. This helps maintain the integrity and fairness of the superannuation entitlements for divorced or separated spouses.

Scope and Application

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2010 applies to orders or agreements that split future superannuation benefits under the Family Law Act 1975, specifically those involving base amount splits of defined benefit superannuation interests or interests in self-managed superannuation funds. This determination is made under the Family Law (Superannuation) Regulations 2001 by the Australian Government Actuary. It applies nationally across Australia and is applicable to property settlements involving divorced or separated spouses. The instrument sets out specific interest rates and methods for adjusting these rates over various periods, aiming to ensure the entitlements of non-member spouses are fairly adjusted in line with changes in earnings as measured by the Australian Bureau of Statistics. This legislation does not specify any exclusions or exemptions, but its application is limited to the financial years mentioned in the instrument. The instrument also notes that the interest rate for the 2009/2010 financial year will not be revised despite recent changes in the Australian Bureau of Statistics' estimates to avoid administrative complications.

Key Provisions

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2010 sets out the interest rates and methods for adjusting base amounts under orders or agreements made in property settlements under the Family Law Act 1975. Section 1 of the instrument specifies that these adjustments apply to orders or agreements that involve splitting future superannuation benefits, specifically defined benefit superannuation interests or interests in self-managed superannuation funds. The Australian Government Actuary is mandated to determine these interest rates under regulation 45D of the Family Law (Superannuation) Regulations 2001. For the financial year starting 1 July 2010, the interest rate is set at 0.083, calculated as 2.5 percentage points above the percentage change in full-time adult ordinary times earnings for Australia as reported by the Australian Bureau of Statistics for the year ending February 2010. The obligations under this Act primarily involve the Australian Government Actuary, who must calculate and determine the interest rates for the adjustment periods as outlined. This includes calculating rates for adjustment periods that are less than 12 months, fall within a financial year, or span across financial years. The Actuary must ensure that these rates are based on the percentage changes in full-time adult ordinary times earnings, with an additional 2.5 percentage points added to these changes. Additionally, the Act requires that these calculations and determinations be made transparently and be based on the most recent data from the Australian Bureau of Statistics. In the event of non-compliance with the provisions of this Act, specific penalties or consequences are not outlined within the text. However, any failure to adhere to the established interest rates or methods for adjustment could potentially result in legal disputes or disputes in family law proceedings concerning property settlements. The implications of such non-compliance would likely be addressed in the context of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, where breaches could lead to court-ordered penalties or corrective measures to ensure compliance with the intended provisions of the Act.

Legal classification tags

Area of Law
Family Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Regulatory Standards
Reporting & Disclosure Obligations

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.