Judges’ Pensions Amendment Regulations 2018

Administered by Department of Finance

Legislation au F2018L01537 Regulations Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Finance and the Public Service

Judges’ Pensions Act 1968

Judges’ Pensions Amendment Regulations 2018

The Judges’ Pensions Act 1968 (the Act) establishes the Judges’ Pensions Scheme (JPS), which provides superannuation benefits for office holders who fall under the definition of ‘Judge’ in that Act.

Commonwealth judges who are members of JPS are not subject to Division 293 tax, which reduces the superannuation tax concessions of very high income earners. However, there are a small number of non-judges that have been granted the same status as judges for the purpose of membership of the JPS. These non-judge members, and any future non‑judge members, are subject to Division 293 tax.

The Act allows non-judge members of the JPS to request that a lump sum amount be paid from the scheme to meet their Division 293 tax liability and, as a consequence, accept a permanent reduction in their JPS pension. The pension is reduced to offset the member’s Division 293 tax liability that has been assessed by the Australian Taxation Office.

The Judges’ Pensions Amendment Regulations 2018 (the Regulations) amend the Judges’ Pensions Regulations 1998 to prescribe the relevant age factors which are required to calculate this pension reduction under the Act.

The changes will align with arrangements for Division 293 tax purposes in other Commonwealth government defined benefit superannuation schemes.

Section 21 of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The authority to prescribe the age factors for Division 293 purposes in the Regulations derives from subsection 17AN(4) of the Act. The authority to amend the Judges’ Pensions Regulations 1998 derives from subsection 33(3) of the Acts Interpretation Act 1901 which provides, among other things, that where an Act confers power to make regulations the power shall, unless the contrary intention appears, be construed as including a power, exercisable in like manner, to amend the regulations. No such contrary intention appears in the Act.

The Act does not specify any conditions that need to be satisfied before the power to make the Regulations may be exercised.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003. The Regulations are exempt from sunsetting by item 36 of the table in section 12 of the Legislation (Exemptions and Other Matters) Regulation 2015.

Consultation was considered unnecessary as the Regulations are of a minor or machinery nature and do not substantially alter existing arrangements.

A Regulation Impact Statement was not prepared for the Regulations because the amendments only affect members of the JPS and will have a nil or minor impact on business, community organisations and individuals. The Office of Best Practice Regulation  has confirmed that a RIS is not required.

Details of the amendments are set out in Attachment A.

A statement of Compatibility with Human Rights is at Attachment B.

The Regulations commence on the day after they are registered.


Attachment A

Details of the Judges’ Pensions Amendment Regulations 2018

Section 1 – Name of Regulation

This section provides that the name of the instrument is the Judges’ Pensions Amendment Regulations 2018 (the Regulations).

Section 2 – Commencement

This section provides that the instrument will commence the day after it is registered.

Section 3 – Authority

This section provides that the instrument is made under the Judges’ Pensions Act 1968 (the Act).

Section 4 – Schedule(s)

This section provides for the operation of Schedule 1 to the instrument, which amends the Judges’ Pensions Regulations 1998.

Schedule 1 – Amendments

Item 1 adds a new Part 1B to the Judges’ Pensions Regulations 1998. The new Part 1B provides the age factor to be used to calculate the reduced pension when a member requests a lump sum amount (the “release authority lump sum”) be paid from the Judges’ Pension Scheme to meet their Division 293 tax liability.

Subsection 17AN(2) prescribes the formula to calculate the reduced pension payable under the Act where a member elects to offset their Division 293 tax liability from their pension that would have otherwise been payable under the Act. Generally, under the Act, a pension is payable to a member on retirement or due to permanent disability or infirmity. The formula specified under section 17AN(2) of the Act is:

New regulation 3B in Part 1B of the Regulations provides a table, which specifies the age factor to be used in the formula specified under section 17AN(2) of the Act. The relevant age factor for the member will be based on:

  • whether the member’s retirement is due to permanent disability or infirmity or not due to permanent disability or infirmity; and
  • the member’s age at their last birthday before or on retirement.

The age factors have been determined by an Actuary, and reflect assumptions regarding life expectancies which were adopted in the 2017 Long Term Cost Report for the scheme.

A note has been included in new Part 1B of the Regulations to clarify that Division 293 tax is not payable by a Justice of the High Court or a justice or judge of a court created by the Parliament. As such, the Regulations will not be applicable to members in the Judges’ Pensions Scheme holding these judicial positions as there is no Division 293 tax liability to be offset for these members.

 


Attachment B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011

Judges’ Pensions Amendment Regulations 2018

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Judges’ Pensions Act 1968 (the Act) allows members of the Judges’ Pensions Scheme (JPS) to request that a lump sum amount be paid from the scheme to meet their Division 293 tax liability and, as a consequence, accept a permanent reduction in their JPS pension. The pension is reduced to offset the member’s Division 293 tax liability that has been assessed by the Australian Taxation Office.

This Legislative Instrument amends the Judges’ Pensions Regulations 1998 to prescribe the relevant age factors under the Act to work out this pension reduction.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Senator the Hon Mathias Cormann

Minister for Finance and the Public Service

 

Overview

The Judges’ Pensions Act 1968 (the Act) was enacted to establish the Judges’ Pensions Scheme (JPS), providing superannuation benefits for individuals who fall under the definition of 'Judge' as outlined in the Act. The Act was introduced to address the need for superannuation benefits for Commonwealth judges, who are not subject to Division 293 tax, unlike other non-judge members of the JPS who do face this tax. The enacting body for the Act is the Australian Parliament, with the policy objective of ensuring equitable superannuation benefits for judges while also addressing the tax implications for other members of the JPS. The Judges’ Pensions Amendment Regulations 2018 were subsequently introduced to amend the Judges’ Pensions Regulations 1998 to better align the scheme with other Commonwealth government defined benefit superannuation schemes, particularly in terms of the tax implications for non-judge members. The Judges’ Pensions Amendment Regulations 2018 were made under the authority of the Judges’ Pensions Act 1968 and aim to prescribe the relevant age factors necessary for calculating pension reductions for non-judge JPS members who elect to offset their Division 293 tax liability. These amendments were considered minor and machinery in nature, with no substantial alteration to existing arrangements, and as such, consultation was deemed unnecessary. The Regulations are designed to ensure that the JPS remains compliant with tax obligations and provide a clear framework for calculating pension reductions in line with other Commonwealth superannuation schemes. The Regulations were registered and commenced the day after registration, as stipulated in the Act.

Scope and Application

The Judges' Pensions Act 1968 establishes the Judges’ Pensions Scheme (JPS), which provides superannuation benefits for individuals defined as 'Judge' in the Act. This includes Commonwealth judges who are exempt from Division 293 tax, unlike certain non-judge members of the JPS who remain subject to this tax. The Act allows non-judge members to request a lump sum payment from the JPS to offset their Division 293 tax liability, which results in a permanent reduction of their JPS pension. The Judges’ Pensions Amendment Regulations 2018 amend the Judges’ Pensions Regulations 1998 to prescribe the age factors required to calculate this pension reduction. These regulations align with Division 293 tax arrangements in other Commonwealth government defined benefit superannuation schemes. The authority to make these regulations derives from section 21 of the Act, and they are exempt from sunsetting provisions under the Legislation (Exemptions and Other Matters) Regulation 2015. Importantly, the Regulations do not apply to members holding judicial positions such as Justices of the High Court, as they are not subject to Division 293 tax.

Key Provisions

The Judges’ Pensions Act 1968 (the Act) establishes the Judges’ Pensions Scheme (JPS) that provides superannuation benefits for Commonwealth judges and a small number of non-judges. Section 17AN of the Act allows non-judge members of the JPS to request a lump sum payment from the scheme to meet their Division 293 tax liability and accept a permanent reduction in their JPS pension. This is done to offset the Division 293 tax liability that has been assessed by the Australian Taxation Office. The amount of the pension reduction is calculated using a formula specified under section 17AN(2) of the Act, which requires the application of age factors to determine the relevant reduction. The Judges’ Pensions Amendment Regulations 2018 (the Regulations) amend the Judges’ Pensions Regulations 1998 to prescribe these age factors. The Regulations impose obligations on the members of the JPS who are non-judges and are subject to Division 293 tax. These members must comply with the provisions of the Regulations when requesting a lump sum payment from the JPS to meet their Division 293 tax liability. The Regulations require the use of the specified age factors to calculate the pension reduction. The members must also accept the permanent reduction in their JPS pension to offset their Division 293 tax liability. The Regulations also require the JPS to calculate and pay the reduced pension to the members in accordance with the provisions of the Regulations. The Act does not specify any offences or penalties for breach of its provisions. However, the Regulations provide for the payment of the reduced pension to the members in accordance with the provisions of the Regulations. Failure to comply with the provisions of the Regulations may result in the JPS not paying the reduced pension to the members. The Regulations are a legislative instrument for the purposes of the Legislation Act 2003 and are exempt from sunsetting by item 36 of the table in section 12 of the Legislation (Exemptions and Other Matters) Regulation 2015. A statement of Compatibility with Human Rights is included in Attachment B to the explanatory statement, which confirms that the Regulations are compatible with human rights. The Regulations are made under the authority of the Judges’ Pensions Act 1968 and the Acts Interpretation Act 1901. The authority to prescribe the age factors for Division 293 purposes in the Regulations derives from subsection 17AN(4) of the Act. The authority to amend the Judges’ Pensions Regulations 1998 derives from subsection 33(3) of the Acts Interpretation Act 1901, which provides that where an Act confers power to make regulations the power shall, unless the contrary intention appears, be construed as including a power, exercisable in like manner, to amend the regulations. No such contrary intention appears in the Act. The Regulations are a legislative instrument for the purposes of the Legislation Act 2003 and are exempt from sunsetting by item 36 of the table in section 12 of the Legislation (Exemptions and Other Matters) Regulation 2015. A statement of Compatibility with Human Rights is included in Attachment B to the explanatory statement, which confirms that the Regulations are compatible with human rights.

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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.