Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2019

Administered by Attorney-General's Department

Legislation au F2019L00818 In force Legislative Instrument

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EXPLANATORY STATEMENT

FAMILY LAW (SUPERANNUATION) (INTEREST RATE FOR ADJUSTMENT PERIOD) DETERMINATION 2019

ISSUED BY AUTHORITY OF THE AUSTRALIAN GOVERNMENT ACTUARY

  1.                 In this instrument the Australian Government Actuary made a number of determinations under regulation 45D of the Family Law (Superannuation) Regulations 2001 (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 (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.
  2.                 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 who has the superannuation interest (‘the member spouse’); 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.

3.                   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.

4.                   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.

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

6.                   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)).

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

8.                   The Determination commenced on 1 July 2019.

9.                   The Determination is a legislative instrument for the purposes of the LA.

10.              In accordance with table item 3 in section 9 of the Legislation (Exemptions and Other Matters) Regulation 2015, the Determination is not subject to disallowance, as it is an instrument (other than a regulation) relating to superannuation.

11.              Details of the Determination are as follows:

Section 1 — Name of Determination

12.              Section 1 provides that the title of the instrument is the Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2019.

Section 2 — Commencement

13.              Section 2 provides that the instrument commences on 1 July 2019.

Section 3 – Authority

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

Section 4 — Definition

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

Section 5 — Adjustment period – financial year

16.              In section 5 of the instrument, the Australian Government Actuary determines, under subregulation 45D(3) of the FLS Regulations, that the interest rate is 0.048 where the adjustment period is the financial year beginning on 1 July 2019. 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 2018 reference period.

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

17.              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 2019. 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 2018 reference period.

Section 7 — Adjustment period – 12 months not within financial year

18.              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 2018 and ends in the financial year beginning on 1 July 2019.

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

19.              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 2018 and ends in the financial year beginning on 1 July 2019.

20.              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 November 2017 reference period. This rate applies for that part of the adjustment period that is in the financial year beginning on 1 July 2018; 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 2018 reference period. This rate applies for that part of the adjustment period that is in the financial year beginning on 1 July 2019.

Overview

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2019 was enacted to address the need for precise interest rates to adjust superannuation entitlements for separated and divorced spouses, as well as separated de facto couples (excluding Western Australia). The Determination was issued by the Australian Government Actuary under the authority of regulation 45D of the Family Law (Superannuation) Regulations 2001, and it provides for the calculation of interest rates to be applied to the adjustment of base amounts for superannuation entitlements under property settlements. This legislative instrument ensures that the adjustments are fair and consistent, aligning with the underlying economic conditions reflected in the full-time adult ordinary time earnings statistics provided by the Australian Bureau of Statistics. The Determination commenced on 1 July 2019, and it is not subject to disallowance, as it pertains to superannuation matters.

Scope and Application

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2019 applies to superannuation entitlements that are split under orders or agreements for property settlements under the Family Law Act 1975, specifically for separated and divorced spouses and separated de facto couples, excluding those in Western Australia. This Act pertains to certain types of future superannuation benefits, namely base amount splits of defined benefit superannuation interests or interests in self-managed superannuation funds. The interest rates for adjusting these base amounts are determined by the Australian Government Actuary under the Family Law (Superannuation) Regulations 2001, applying to adjustment periods of various lengths, including those that are less than 12 months and those that span financial years. The rates are calculated based on the percentage change in full-time adult ordinary time earnings for all persons in Australia, as published by the Australian Bureau of Statistics. The Determination is a legislative instrument under the Legislation Act 2003 and commenced on 1 July 2019, and it is not subject to disallowance as it is an instrument relating to superannuation.

Key Provisions

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2019 sets out the interest rates and methods for calculating those rates under the Family Law (Superannuation) Regulations 2001 (FLS Regulations) (sections 5 to 8). The rates and methods are used to adjust the base amounts for superannuation entitlements in property settlements under the Family Law Act 1975. The Australian Government Actuary determined the interest rates for various adjustment periods, including periods that are a financial year, less than 12 months within a financial year, exactly 12 months but crossing financial years, and less than 12 months but crossing financial years. These rates are set at 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 relevant reference period (section 5 to 8). The parties or entities governed by this Act are the Australian Government Actuary, the courts, and the spouses involved in property settlements under the Family Law Act 1975. The Australian Government Actuary is responsible for determining the interest rates and methods for calculating those rates (section 3). The courts are required to allocate a base amount before making an order under a base amount split, and the spouses are required to specify a base amount in their agreement (section 3). The base amount is then adjusted annually or for a part year, as necessary, until the superannuation benefits are payable to the member spouse or the member spouse’s interest is split (section 3). The entitlement of the non-member spouse is linked to the adjusted base amount at the time of payment or split (section 3). There are no offences, penalties, or consequences specified in the instrument for non-compliance. However, non-compliance with the Family Law Act 1975 or the FLS Regulations may result in civil or criminal consequences, depending on the nature and severity of the breach. The maximum penalties for offences under the Family Law Act 1975 include fines of up to $21,000 for individuals and $105,000 for bodies corporate, as well as imprisonment for up to 2 years. The maximum penalties for offences under the FLS Regulations include fines of up to $21,000 for individuals and $105,000 for bodies corporate. It is important to note that these penalties are not specific to the Determination and may vary depending on the circumstances of the case.

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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.