Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2014

Administered by Attorney-General's Department

Legislation au F2014L00708 In force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

FAMILY LAW (SUPERANNUATION) (INTEREST RATE FOR ADJUSTMENT PERIOD) DETERMINATION 2014

 

ISSUED BY AUTHORITY OF THE AUSTRALIAN GOVERNMENT ACTUARY

In this instrument the Australian Government Actuary made a number of determinations under regulation 45D of the Family Law (Superannuation) Regulations 2001 (the FLS Regulations). The determinations relate to the adjustment of superannuation entitlements of separated and divorced spouses, and of separated de facto couples (except in Western Australia).  The entitlements are provided under certain orders or agreements that split particular kinds of future superannuation benefits made in property settlements under the Family Law Act 1975 (the Family Law 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 Family Law 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 which satisfies the definition at regulation 5 of the FLS Regulations.  It is typically one 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)).

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

The Determination commenced on 1 July 2014.

The Determination is a legislative instrument for the purposes of the LIA.

Details of the Determination are as follows:

Section 1 — Name of Determination

Section 1 provides that the title of the instrument is the Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2014.

Section 2 — Commencement

Section 2 provides that the instrument commenced on 1 July 2014.

Section 3 – Authority

Section 3 provides that the instrument was made under regulation 45D of the Family Law (Superannuation) Regulations 2001 (the FLS Regulations).

Section 4 — Definition

Section 4 provides that in this instrument where the term Regulations is used it means the FLS Regulations.

Section 5 — Adjustment period – financial year

In Section 5 of the instrument, the Australian Government Actuary determines, under subregulation 45D(3) of the FLS Regulations, that the interest rate is  0.054 where the adjustment period is the financial year beginning on 1 July 2014.  This rate 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 November 2013 quarter.

Section 6 — Adjustment period – less than 12 months within financial year

In Section 6 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 financial year beginning on 1 July 2014.  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 time earnings for all persons in Australia as published by the Australian Bureau of Statistics for the year ending with the November 2013 quarter.

Section 7 — Adjustment period – 12 months not within 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 exactly 12 months and begins in the  financial year beginning on 1 July 2013 and ends in the financial year beginning on 1 July 2014.

Section 8 — Adjustment period – less than 12 months not within financial year

In Section 8 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 financial year beginning on 1 July 2013 and ends in the financial year beginning on 1 July 2014.

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 ‘amended percentage change’ as adopted for the Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2013.  The amended percentage change is calculated by reference to the percentage increase in the original estimate of full-time adult ordinary time earnings for all persons in Australia as published by the Australian Bureau of Statistics over the nine months ending with the November 2012 reference period.  This rate applies for that part of the adjustment period that is in the financial year beginning on 1 July 2013; 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 November 2013 reference period (for that part of the adjustment period that is in the financial year beginning on 1 July 2014).


STATEMENT OF COMPATIBILITY FOR A BILL OR LEGISLATIVE INSTRUMENT THAT DOES NOT RAISE ANY HUMAN RIGHTS ISSUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This material is provided to persons who have a role in Commonwealth legislation, policy and programs as general guidance only and is not to be relied upon as legal advice.  Commonwealth agencies subject to the Legal Services Directions 2005 requiring legal advice in relation to matters raised in connection with this template must seek that advice in accordance with the Directions.

 

Overview

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2014 was enacted to address the issue of setting interest rates for the adjustment of superannuation entitlements in family law matters, specifically under the Family Law Act 1975. This legislative instrument was issued by authority of the Australian Government Actuary and made under regulation 45D of the Family Law (Superannuation) Regulations 2001. The primary policy objective is to ensure the fair and accurate adjustment of superannuation entitlements for separated and divorced spouses, and separated de facto couples, by determining appropriate interest rates based on economic indicators such as the percentage change in full-time adult ordinary time earnings. This determination helps maintain the value of superannuation entitlements in line with economic conditions, thereby supporting the equitable division of assets in family law proceedings.

Scope and Application

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2014 applies to the adjustment of superannuation entitlements for separated and divorced spouses, and separated de facto couples (except in Western Australia) under certain orders or agreements that split future superannuation benefits in property settlements. These orders or agreements pertain to base amount splits of future superannuation benefits, which are applicable to most types of superannuation, including defined benefit superannuation interests and interests in self-managed superannuation funds. The Determination specifies the interest rates for adjusting base amounts based on different periods, calculated in accordance with the Family Law (Superannuation) Regulations 2001. This instrument, which commenced on 1 July 2014, provides a legislative framework for the Australian Government Actuary to determine these interest rates, ensuring that the entitlements of non-member spouses are linked to the adjusted base amounts when the specified events occur. The rates are calculated with reference to the percentage change in full-time adult ordinary time earnings in Australia, published by the Australian Bureau of Statistics. The instrument does not explicitly mention any exclusions or exemptions, nor does it extend its application through subordinate instruments.

Key Provisions

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2014 outlines the interest rates that apply to the adjustment of superannuation entitlements for separated or divorced spouses and de facto partners, excluding those in Western Australia. These adjustments occur under specific orders or agreements related to property settlements made under the Family Law Act 1975, particularly for base amount splits of future superannuation benefits. According to section 5 of the Determination, the interest rate for adjustment periods that align with a financial year (such as the year beginning 1 July 2014) is set at 0.054, which is 2.5 percentage points above the percentage change in the full-time adult ordinary time earnings for all persons in Australia, as reported by the Australian Bureau of Statistics for the year ending November 2013. For shorter adjustment periods within a financial year, as specified in section 6, the interest rate is calculated similarly, but it is adjusted to fit the shorter period. In cases where the adjustment period spans across two financial years, as described in sections 7 and 8, the rate is calculated using a combination of the percentage changes from the preceding and current financial years, each adjusted by 2.5 percentage points. The Determination imposes specific obligations on the parties involved, including the Australian Government Actuary, who is responsible for determining the interest rates under the Family Law (Superannuation) Regulations 2001. These obligations require the Actuary to establish the interest rates based on the prescribed formulae, ensuring that the rates are calculated accurately and consistently. Courts and parties involved in family law proceedings must adhere to these rates when making or implementing orders or agreements that involve the splitting of superannuation benefits. The accuracy and timely calculation of these interest rates are crucial for ensuring the fair distribution of superannuation entitlements between separated spouses or de facto partners. Breach of the obligations set out in the Determination may lead to civil consequences, although the Determination does not explicitly outline specific penalties or enforcement mechanisms. However, failure to adhere to the prescribed interest rates could result in disputes or challenges in family law proceedings, potentially leading to court interventions to rectify any discrepancies. The Determination's focus is on providing a clear and consistent framework for calculating interest rates, thereby avoiding potential legal disputes and ensuring the equitable treatment of parties involved in superannuation splits.

Legal classification tags

Area of Law
Family Law
Instrument
Statutory Instrument
Concepts
Definitions & Interpretation
Regulatory Standards
Enforcement Powers

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.