Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2011

Administered by Attorney-General's Department

Legislation au F2011L01352 In force Legislative Instrument

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EXPLANATORY STATEMENT

 

FAMILY LAW (SUPERANNUATION) (INTEREST RATE FOR ADJUSTMENT PERIOD) DETERMINATION 2011

 

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 Section 4 of the instrument, the Australian Government Actuary determines, under subregulation 45D(3) of the FLS Regulations, that the interest rate is 0.063 where the adjustment period is the financial year beginning on 1 July 2011.  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 2011 quarter.

In Section 5 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 2011/2012 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 2011 quarter.

In Section 6 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 2010/2011 financial year and ends in the 2011/2012 financial year. 

In Section 7 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 2010/2011 financial year and ends in the 2011/2012 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 2010 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 2011 quarter.

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 2011 was enacted to address the need for setting interest rates applicable to the adjustment of entitlements of divorced or separated spouses under certain orders or agreements that split future superannuation benefits as part of property settlements. This determination was made under the authority of the Australian Government Actuary in accordance with regulation 45D of the Family Law (Superannuation) Regulations 2001, which themselves operate under the overarching framework of the Family Law Act 1975. The primary policy objective behind this legislation is to ensure that the adjustment of entitlements linked to future superannuation benefits is carried out in a manner that is fair and reflective of economic conditions, as evidenced by the methods chosen to calculate the interest rates based on changes in full-time adult ordinary time earnings as published by the Australian Bureau of Statistics.

Scope and Application

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2011 applies to orders or agreements that involve a base amount split of future superannuation benefits in the context of property settlements under the Family Law Act 1975. These splits typically pertain to defined benefit superannuation interests or interests in self-managed superannuation funds. The Act concerns itself with the method by which these base amounts are adjusted annually or for part of a year, until the superannuation benefits are payable to the member spouse or until the member's interest is split under other specified regulations or governing rules. The Australian Government Actuary, under the Family Law (Superannuation) Regulations 2001, is responsible for determining the interest rates for these adjustments. The instrument sets specific interest rates and calculation methods for various periods, including financial years and periods less than a year, all linked to changes in full-time adult ordinary time earnings in Australia. This legislation applies nationally across Australia, and its scope is extended through subordinate instruments that provide detailed methods for calculating interest rates for different adjustment periods.

Key Provisions

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2011 (sections 4, 5, 6, and 7) provides specific rates and methods for adjusting the entitlements of divorced or separated spouses under certain orders or agreements related to future superannuation benefits. For instance, under section 4, the Australian Government Actuary determines an interest rate of 0.063 for a 12-month adjustment period beginning on 1 July 2011. This rate is calculated based on a 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 2011 quarter, plus 2.5 percentage points. Similarly, sections 5, 6, and 7 detail methods for calculating interest rates for adjustment periods that are less than 12 months, beginning and ending within a financial year, or spanning across two financial years, respectively. The Act imposes several obligations on parties and entities involved in property settlements under the Family Law Act 1975. Firstly, it mandates that any base amount allocated by the court or specified in an agreement between spouses is to be adjusted annually or for a part year, as necessary. The adjustment is based on the determined interest rates and methods specified in the Determination. Additionally, the non-member spouse's entitlement is to be linked to the adjusted base amount when superannuation benefits become payable to the member spouse or when the member's interest is split. This ensures that the entitlements are regularly updated to reflect changes in economic conditions. In terms of penalties and consequences, the Determination itself does not explicitly outline criminal or civil penalties for non-compliance. However, the Family Law (Superannuation) Regulations 2001, under which this Determination is made, may contain provisions that address breaches of the Act. Generally, breaches of the Family Law Act 1975 or related regulations could lead to legal actions, including fines or other civil remedies. The specific penalties would depend on the nature and severity of the breach, as outlined in the overarching legislative framework.

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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.