Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2025

Administered by Attorney-General's Department

Legislation au F2025L00657 In force Legislative Instrument

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EXPLANATORY STATEMENT

FAMILY LAW (SUPERANNUATION) (INTEREST RATE FOR ADJUSTMENT PERIOD) DETERMINATION 2025

ISSUED BY AUTHORITY OF THE AUSTRALIAN GOVERNMENT ACTUARY

  1.                    In this instrument the Australian Government Actuary made a number of determinations under section 76 of the Family Law (Superannuation) Regulations 2025 (FLS Regulations). The determinations relate to the adjustment of superannuation entitlements of separated and divorced spouses, and of separated de facto couples. 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 Accounts Regulations 1997, or pursuant to the governing rules of the relevant superannuation fund or scheme in accordance with section 22 of the FLS Regulations.
  1.                    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.
  2.                    A defined benefit superannuation interest is one which satisfies the definition at section 6 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.
  3.                    A self managed superannuation fund is a fund with no more than 6 members that satisfies certain conditions under sections 17A and 17B of the Superannuation Industry (Supervision) Act 1993.
  4.                    Paragraph 76(4)(a) of the FLS Regulations permits the Australian Government Actuary to determine a rate for the adjustment of a base amount for a financial year by reference to a rate that is 2.25 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 quarter of the previous financial year.
  5.                    The rates and formulae in this instrument have been calculated, as per paragraph 76(4)(a) of the FLS Regulations, by adding 2.25 percentage points to the increase in the estimated earnings at November 2024, and at November 2023, which can be accessed on the Australian Bureau of Statistics website at: www.abs.gov.au/statistics/labour/earnings-and-working-conditions/average-weekly-earnings-australia.
  6.                    The power in paragraph 76(4)(a) of the FLS Regulations was previously provided in regulation 45D of the repealed Family Law (Superannuation) Regulations 2001 which prescribed the rate at 2.5 percentage points above the increase in estimated earnings.
  7.                    The rate determined for the 2024-25 financial year in the Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2024 was 7%, which was based on the application of the Family Law (Superannuation) Regulations 2001. The rate for the 2024-25 financial year determined in this instrument is 6.8%, which is based on the application of the FLS Regulations. This is because the Family Law (Superannuation) Regulations 2001 were in force until 1 April 2025, when they were replaced by the FLS Regulations.
  8.               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, section 76 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 (paragraph 76(4)(a));
  • 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 (paragraph 76(4)(b)); 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 (paragraph 76(4)(c).
  1.               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. The Attorney-General’s Department is responsible for the administration of the FLS Regulations. The instrument is technical in nature, and applies Australian Bureau of Statistics data to existing formulae in the FLS Regulations.
  2.               The instrument commences on 1 July 2025.
  3.               The instrument is a legislative instrument for the purposes of the LA.
  4.               In accordance with table item 3 in section 9 of the Legislation (Exemptions and Other Matters) Regulation 2015, the instrument is not subject to disallowance, as it is an instrument (other than a regulation) relating to superannuation.
  5.               In accordance with table item 6 in section 11 of the Legislation (Exemptions and Other Matters) Regulation 2015, the instrument is not subject to sunsetting, as it is an instrument (other than a regulation) relating to superannuation.
  6.               Details of the instrument are as follows:

Section 1 — Name of Determination

  1.               Section 1 provides that the title of the instrument is the Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2025.

Section 2 — Commencement

  1.               Section 2 provides that the instrument commences on 1 July 2025.

Section 3 — Authority

  1.               Section 3 provides that the instrument is made under section 76 of the Family Law (Superannuation) Regulations 2025 (the FLS Regulations).

Section 4 — Definition

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

Section 5 — Adjustment period – financial year

  1.               Section 5 provides that, for the purposes of paragraph 76(4)(a) of the FLS Regulations, the interest rate is 0.069 where the adjustment period is the financial year beginning on 1 July 2025. This rate is 2.25 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 2024 reference period.

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

  1.               Section 6 provides, for the purposes of paragraph 76(4)(b) 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 2025. The method provides for the calculation of a rate by reference to a rate that is 2.25 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 2024 reference period.

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

  1.               Section 7 provides, for the purposes of paragraph 76(4)(c) 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 2024 and ends in the financial year beginning on 1 July 2025.

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

  1.               Section 8 provides, for the purposes of paragraph 76(4)(c) 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 2024 and ends in the financial year beginning on 1 July 2025.

 

Overview

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2025 was enacted to provide clarity and stability in the adjustment of superannuation entitlements for separated or divorced spouses and de facto couples, ensuring these entitlements are accurately and fairly adjusted in line with economic indicators. This instrument was introduced to address the need for a clear and transparent method of calculating interest rates used in the adjustment of base amounts for superannuation interests as outlined in the Family Law (Superannuation) Regulations 2025. This was necessary to maintain consistency and fairness in property settlements under the Family Law Act 1975. The instrument was issued by the Australian Government Actuary, acting under the authority of the Australian Government, and its primary policy objective is to ensure that the interest rates used in these adjustments are based on reliable and up-to-date economic data, specifically the changes in full-time adult ordinary time earnings as published by the Australian Bureau of Statistics. The instrument is designed to facilitate the equitable distribution of superannuation benefits in family law proceedings by providing a predictable and consistent method of calculating these adjustments.

Scope and Application

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2025 applies to the calculation of adjustment rates for base amounts in property settlements involving superannuation entitlements of separated and divorced spouses and de facto couples, specifically where the entitlements are linked to defined benefit superannuation interests or interests in self-managed superannuation funds. This applies to orders or agreements made under the Family Law Act 1975 and regulated by the Family Law (Superannuation) Regulations 2025. The Australian Government Actuary determines the interest rates using data from the Australian Bureau of Statistics, setting the rate at 2.25 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 ABS for the year ending with the November quarter of the previous financial year. The instrument does not include any exclusions, exemptions, or thresholds, and its application is limited to the Commonwealth jurisdiction. It is not subject to disallowance or sunsetting as it is an instrument relating to superannuation. The instrument is technical in nature and commenced on 1 July 2025.

Key Provisions

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2025 sets out the interest rates and methods for calculating adjustments to superannuation entitlements for separated and divorced spouses, and separated de facto couples. These adjustments are made under orders or agreements that split future superannuation benefits, as provided under the Family Law Act 1975 (section 76 of the Family Law (Superannuation) Regulations 2025). Specifically, it applies to defined benefit superannuation interests and interests in self-managed superannuation funds. The determinations specify the interest rates for adjustment periods that are financial years, periods less than 12 months within a financial year, and periods exactly 12 months crossing financial years. For the 2024-25 financial year, the interest rate has been set at 6.8%, which is based on a formula that adds 2.25 percentage points to the increase in estimated earnings as published by the Australian Bureau of Statistics (sections 5, 6, 7, and 8). The obligations under this instrument include the requirement for the Australian Government Actuary to calculate the interest rates based on the specified formula, and to apply these rates to the adjustment of superannuation entitlements. This involves referencing the increase in estimated earnings from the Australian Bureau of Statistics and applying the prescribed formula to determine the adjustment rates (section 76 of the FLS Regulations). Additionally, the instrument mandates that the calculated rates be applied to the base amount split of superannuation benefits as outlined in the Family Law Act and the FLS Regulations. There are no specific offences or penalties outlined in this instrument for non-compliance. However, any failure to adhere to the prescribed rates and methods for adjusting superannuation entitlements could result in disputes under the Family Law Act, potentially leading to court interventions. The instrument is technical and focuses primarily on the calculation and application of interest rates rather than prescribing punitive measures for non-compliance. The primary consequence of not following the prescribed rates and methods would be the invalidation of the superannuation split agreements or orders, which could lead to legal challenges and additional costs for the parties involved.

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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.