Social Security (Family Law Affected Income Streams) (DEEWR) Principles 2011 (No. 1)

Administered by Department of Social Services

Legislation au F2011L02459 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Social Security (Family Law Affected Income Streams) (DEEWR) Principles 2011 (No. 1)

 

Summary

 

Amendments made in recent years to the Family Law Act 1975 allow superannuation interests to be split pursuant to a family law property settlement.  These Principles will allow these split interests to be assessed consistently with other income and assets under the social security means test.

 

Background

 

These Principles are made as a consequence to the provisions of the Family Law Legislation Amendment (Superannuation) Act 2001 (the Super Act). This Act received Royal Assent in June 2001, and provides for more equitable treatment of superannuation entitlements for separating couples. Complementary legislation to amend provisions relating to tax and superannuation regulatory provisions was enacted via the Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001.

 

The Super Act gives the Family Court, or parties to a property settlement, the ability to divide superannuation entitlements. This may be by either splitting the superannuation during either the ‘growth phase’ or ‘payment phase’, or by ‘flagging’ superannuation in the growth phase so that the trustee is prevented from distributing the superannuation until further agreement is reached. A superannuation interest may be ‘split’ pursuant to either a superannuation agreement between two divorcing or separating parties or a court order requiring a particular split of the superannuation interest.

 

Explanation of the Provisions

 

Part 1 – Preliminary

 

Section 1.1 of the Principles states the name of the Principles.

 

Section 1.2 sets out that the Principles commence on the day after registration on the Federal Register of Legislative Instruments.

 

Section 1.3 provides definitions of terms used in the Principles.

 

Section 1.4 specifies that the decision-making principles set out in this instrument are made under a number of provisions in the Social Security Act 1991 (the Act).

 


 

Part 2 – Income from asset-test exempt income streams

 

Section 2.1 provides that Part 2 applies to a family law affected income stream (defined at section 9C of the Act) that is an asset-test exempt income stream (defined at subsection 9(1) of the Act).  Such an income stream may either be a defined benefit income stream (defined at subsection 9(1F) of the Act) or a non-defined benefit income stream.

 

Section 2.2 applies to an asset-test exempt family law affected income stream that is not a defined benefit income stream.  This section prescribes the matters that the Secretary must have regard to in making a decision under paragraph 1099DB(1)(a) of the Act, that is, the annual rate of ordinary income that an income support recipient is taken to have received from one of these income streams in a year.  In making such a decision, the Secretary must take into account the matters listed in items 1 to 10 and 14 to 23 of Schedule 1 of the Principles as well as any other matter that the Secretary considers relevant.  Where the income support recipient is receiving income from the income stream as a result of more than one payment split, the Secretary must have regard to those same matters in regard to each payment split.

 

Section 2.3 applies to an asset-test exempt family law affected income stream that is a defined benefit income stream.  This section prescribes the matters that the Secretary must have regard to in making a decision under paragraph 1099DB(1)(b) of the Act, that is, the annual rate of ordinary income that an income support recipient is taken to have received from one of these income streams in a year.  In making such a decision, the Secretary must take into account the matters listed in items 1 to 12 and 14 to 23 of Schedule 1 as well as any other matter that the Secretary considers relevant.  Where the income support recipient is receiving income from the income stream as a result of more than one payment split, the Secretary must have regard to those same matters in regard to each payment split.

 

Part 3 – Income from asset-test income streams (long term)

 

Section 3.1 provides that Part 3 applies to a family law affected income stream (defined at section 9C of the Act) that is an asset-tested income stream (long term) (defined at subsection 9(1) of the Act).  Such an income stream may either be a defined benefit income stream (defined at subsection 9(1F) of the Act) or a non-defined benefit income stream.

 


Section 3.2 applies to an income stream that is both an asset-tested income stream (long term) and a family law affected income stream but is not a defined benefit income stream.  This section prescribes the matters that the Secretary must have regard to in making a decision under paragraph 1099DC(1)(a) of the Act, that is, the annual rate of ordinary income that an income support recipient is taken to have received from one of these income streams in a year.  In making such a decision, the Secretary must take into account the matters listed in items 1 to 10 and 13 to 23 of Schedule 1 as well as any other matter that the Secretary considers relevant.  Where the income support recipient is receiving income from the income stream as a result of more than one payment split, the Secretary must have regard to those same matters in regard to each payment split.

 

Section 3.3 applies to an income stream that is both an asset-tested income stream (long term) and a family law affected income stream and is also a defined benefit income stream.  This section prescribes the matters that the Secretary must have regard to in making a decision under paragraph 1099DC(1)(b) of the Act, that is, the annual rate of ordinary income that an income support recipient is taken to have received from one of these income streams in a year.  In making such a decision, the Secretary must take into account the matters listed in items 1 to 23 of Schedule 1 as well as any other matter that the Secretary considers relevant.  Where the income support recipient is receiving income from the income stream as a result of more than one payment split, the Secretary must have regard to those same matters in regard to each payment split.

 

Part 4 – Asset value of asset-tested income stream

 

Section 4.1 provides that Part 4 applies to a family law affected income stream (defined at section 9C of the Act) that is an asset-tested income stream (long term) or an asset-tested income stream (short term) (both defined at subsection 9(1) of the Act).  Such an income stream may either be a defined benefit income stream (defined at subsection 9(1F) of the Act) or a non-defined benefit income stream.

 

Section 4.2 applies to an income stream that is both an asset-tested income stream (long term) or an asset-tested income stream (short term) and a family law affected income stream but is not a defined benefit income stream.  This section prescribes the matters that the Secretary must have regard to in making a decision under subsection 1120A(2) of the Act, that is, deciding what the value of one of these income steams is for asset-testing purposes in relation to the income support recipient.  In making such a decision, the Secretary must take into account the matters listed in items 1 to 23 of Schedule 1 as well as any other matter that the Secretary considers relevant.  Where the income support recipient is receiving income from the income stream as a result of more than one payment split, the Secretary must have regard to those same matters in regard to each payment split.

 


Section 4.3 applies to an income stream that is both an asset-tested income stream (long term) or an asset-tested income stream (short term) and a family law affected income stream and is also a defined benefit income stream.  This section prescribes the matters that the Secretary must have regard to in making a decision under subsection 1120A(3) of the Act, that is, deciding what the value of one of these income steams is for asset-testing purposes in relation to the income support recipient.  In making such a decision, the Secretary must take into account the matters listed in items 1 to 23 of Schedule 1 as well as any other matter that the Secretary considers relevant.  Where the income support recipient is receiving income from the income stream as a result of more than one payment split, the Secretary must have regard to those same matters in regard to each payment split.

 

Schedule 1 – Matters to which the Secretary must have regard

 

This schedule sets out the specifics of the matters that the Secretary must have regard to in making a decision under paragraphs 1099DB(1)(a) or (b), paragraphs 1099DC(1)(a) or (b) or subsections 1120A(2) or (3) of the Act.  The Secretary will only have regard to such of the matters listed as are specified in this Instrument for the purposes of paragraphs 2.2(2)(a), 2.3(2)(a), 3.2(2)(a), 3.3(2)(a), 4.2(2)(a) and 4.3(2)(a).  There are 23 matters listed that the Secretary may, potentially, be required to have regard to in making one of these decisions. 

 

Consultation

Consultation regarding these Principles was undertaken with the Department of Families, Housing, Community Services and Indigenous Affairs, and the Department of Veterans’ Affairs, to ensure a co-ordinated approach in respect of welfare payments for which they have responsibility.

Regulation Impact Statement

There was no requirement to prepare a Regulation Impact Statement in regard to the Determination, as this measure is not likely to have a direct, or a substantial indirect, effect on business and is not likely to restrict competition.

 

Overview

The Social Security (Family Law Affected Income Streams) (DEEWR) Principles 2011 were enacted to address the need for consistent assessment of split superannuation interests under the social security means test, following the amendments to the Family Law Act 1975 that allowed for such splits in property settlements. The Family Law Legislation Amendment (Superannuation) Act 2001 provided for the division of superannuation entitlements between separating couples, and these Principles were established to ensure that these split interests are treated uniformly with other income and assets under the social security system. These Principles were made under the authority of the Social Security Act 1991 and were developed in consultation with relevant government departments to facilitate a coordinated approach to welfare payments. They aim to ensure that income support recipients who receive income from split superannuation interests are assessed in a manner that is consistent and equitable.

Scope and Application

The Social Security (Family Law Affected Income Streams) (DEEWR) Principles 2011, established as a consequence of the Family Law Legislation Amendment (Superannuation) Act 2001, apply to income streams derived from superannuation entitlements that are subject to family law property settlements. These Principles govern how such split interests in superannuation are assessed for social security means testing purposes, ensuring consistency with other income and assets under the social security system. They are applicable to income support recipients who receive income from family law affected income streams, which include both asset-test exempt income streams and asset-tested income streams (long term). The Principles specify the matters that the Secretary must consider in determining the annual rate of ordinary income from these income streams, as well as their asset value for means testing. The application of these Principles is governed by the Social Security Act 1991 and extends across the Commonwealth of Australia, with no stated exclusions, exemptions, or thresholds beyond what is explicitly detailed in the Principles and the Act.

Key Provisions

The Social Security (Family Law Affected Income Streams) (DEEWR) Principles 2011 (No. 1) detail the rules for assessing split superannuation interests under family law property settlements in the context of social security means tests. Section 2.1 and Section 2.2 require that the Secretary of the Department of Education, Employment and Workplace Relations (DEEWR) considers specific matters when determining the annual rate of ordinary income for an income support recipient from an asset-test exempt income stream that is affected by family law. These matters include the nature of the income stream, its terms, and any relevant agreements or court orders. Section 2.3 deals with defined benefit income streams, where the Secretary must consider additional specific factors. Section 3.1 to Section 3.3 deal with income streams that are asset-tested for long-term purposes. Here, the Secretary must consider a broader set of factors, including the nature of the income stream, the terms of any agreements or orders, and other relevant considerations. The obligations imposed by these provisions require the Secretary to conduct a thorough assessment of the income stream in question, taking into account the specifics of the family law affected income stream and any relevant agreements or court orders. This includes considering the nature of the income stream, the terms of any agreements or orders, and other relevant factors as outlined in Schedule 1. For defined benefit income streams, additional specific factors must be considered. Failure to comply with these provisions may not necessarily result in direct criminal or civil penalties, but non-compliance could potentially lead to incorrect assessments of income support eligibility or amounts, which could result in legal challenges or administrative penalties. The consequences of such errors could include overpayments or underpayments of social security benefits, which might necessitate repayment of benefits or adjustments in future payments. The primary repercussions would likely be administrative, involving corrections and potential financial liabilities arising from incorrect assessments.

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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.