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This is a Bill, not an Act. For current law, see the Acts databases.
1998-1999-2000
The Parliament
of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Family Law
Legislation Amendment (Superannuation) Bill
2000
No. ,
2000
(Attorney-General)
A
Bill for an Act to amend legislation relating to family law, and for related
purposes
ISBN: 0642
434964
Contents
Bankruptcy Act
1966 3
Family Law Act
1975 3
Superannuation Industry (Supervision) Act
1993 21
Superannuation (Resolution of Complaints) Act
1993 21
A Bill for an Act to amend legislation relating to family
law, and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the Family Law Legislation Amendment
(Superannuation) Act 2000.
(1) Subject to this section, this Act commences on the day on which it
receives the Royal Assent.
(2) Schedule 1 commences on the first anniversary of the day on which
this Act receives the Royal Assent.
Subject to section 2, each Act that is specified in a Schedule to
this Act is amended or repealed as set out in the applicable items in the
Schedule concerned, and any other item in a Schedule to this Act has effect
according to its terms.
In this Act, unless the contrary intention appears:
Family Law Act means the Family Law Act
1975.
marriage includes a void marriage.
startup time means the time when Schedule 1
commences.
superannuation amendments means the amendments made by
Schedule 1.
(1) Subject to this section, the superannuation amendments apply to all
marriages, including those that were dissolved before the startup
time.
(2) The superannuation amendments do not apply to a marriage if:
(a) an agreement in relation to the marriage was approved by a court
before the startup time under section 87 of the Family Law Act;
or
(b) an order (other than an interim order) was made in relation to the
marriage before the startup time under section 79 of the Family Law
Act.
(3) Part VIIIB of the Family Law Act does not apply in relation to a
financial agreement that was made before the startup time.
1 After subparagraph
116(2)(d)(iv)
Insert:
(iva) a payment to the bankrupt under a payment split under
Part VIIIB of the Family Law Act 1975 where:
(A) the eligible superannuation plan involved is a fund or scheme covered
by subparagraph (iii); and
(B) the splittable payment involved is not a pension within the meaning of
the Superannuation Industry (Supervision) Act 1993;
2 At the end of paragraph
116(2)(d)
Add:
(vii) a payment to the bankrupt under a payment split under
Part VIIIB of the Family Law Act 1975 where:
(A) the eligible superannuation plan involved is an RSA; and
(B) the splittable payment involved is not a pension or annuity within the
meaning of the Retirement Savings Accounts Act 1997;
3 At the end of subsection
90K(1)
Add:
; or (e) a payment flag is operating under Part VIIIB on a
superannuation interest covered by the agreement and there is no reasonable
likelihood that the operation of the flag will be terminated by a flag lifting
agreement under that Part; or
(f) the agreement covers at least one superannuation interest that is an
unsplittable interest for the purposes of Part VIIIB.
4 After Part VIIIA
Insert:
The object of this Part is to allow certain payments (splittable
payments) in respect of a superannuation interest to be allocated between the
parties to a marriage, either by agreement or by court order.
(1) This Part has effect despite anything to the contrary in:
(a) any other law of the Commonwealth; or
(b) any law of a State or Territory; or
(c) anything in a trust deed or other instrument.
(2) Without limiting subsection (1), nothing done in compliance with
this Part by the trustee of an eligible superannuation plan is to be treated as
resulting in a contravention of a law or instrument referred to in
subsection (1).
A superannuation interest is to be treated as property for the purposes
of paragraph (ca) of the definition of matrimonial cause in
section 4.
In this Part, unless the contrary intention appears:
breakdown declaration has the meaning given by
section 90MP.
declaration time means the time when the declaration was
signed by a spouse (or last signed by a spouse, if both spouses have
signed).
eligible superannuation plan means any of the
following:
(a) a superannuation fund within the meaning of the SIS Act;
(b) an approved deposit fund within the meaning of the SIS Act;
(c) an RSA;
(d) an account within the meaning of the Small Superannuation Accounts
Act 1995.
flagging order means an order mentioned in subsection
90MU(1).
flag lifting agreement has the meaning given by
section 90MN.
in force, in relation to an agreement, has the meaning given
by section 90MG.
interest includes a prospective or contingent interest, and
also includes an expectancy.
marriage includes a void marriage.
member, in relation to an eligible superannuation plan,
includes a beneficiary (including a contingent or prospective
beneficiary).
member spouse, in relation to a superannuation interest,
means the spouse who has the superannuation interest.
non-member spouse, in relation to a superannuation interest,
means the spouse who is not the member spouse in relation to that
interest.
operative time:
(a) in relation to a payment split under a superannuation agreement or
flag lifting agreement—has the meaning given by section 90MI;
or
(b) in relation to a payment flag under a superannuation
agreement—has the meaning given by section 90MK; or
(c) in relation to a payment split under a court order—means the
time specified in the order.
payment flag means:
(a) the application of section 90ML in relation to a superannuation
interest; or
(b) the application of a flagging order in relation to a superannuation
interest.
payment split means:
(a) the application of section 90MJ in relation to a splittable
payment; or
(b) the application of a splitting order in relation to a splittable
payment.
regulated superannuation fund has the same meaning as in the
SIS Act.
reversionary interest has the meaning given by
section 90MF.
RSA means a retirement savings account within the meaning of
the Retirement Savings Accounts Act 1997.
SIS Act means the Superannuation Industry (Supervision)
Act 1993.
splittable payment has the meaning given by
section 90ME.
splitting order means an order mentioned in subsection
90MT(1).
spouse means a party to a marriage.
superannuation agreement has the meaning given by
section 90MH.
superannuation interest means an interest that a person has
as a member of an eligible superannuation plan, but does not include a
reversionary interest.
trustee, in relation to an eligible superannuation plan,
means:
(a) if the plan is a fund that has a trustee (within the ordinary meaning
of that word)—the trustee of the plan; or
(b) if paragraph (a) does not apply and a person is identified in
accordance with the regulations as the trustee of the plan for the purposes of
this definition—the person identified in accordance with the regulations;
or
(c) in any other case—the person who manages the plan.
unflaggable interest means a superannuation interest
prescribed by the regulations for the purposes of this definition.
unsplittable interest means a superannuation interest
prescribed by the regulations for the purposes of this definition.
working day means any day except:
(a) a Saturday or Sunday; or
(b) a day that is a public holiday anywhere in Australia.
(1) Each of the following payments in respect of a superannuation interest
of a spouse is a splittable payment:
(a) a payment to the spouse;
(b) a payment to another person for the benefit of the spouse;
(c) a payment to the legal personal representative of the spouse, after
the death of the spouse;
(d) a payment to a reversionary beneficiary, after the death of the
spouse;
(e) a payment to the legal personal representative of a reversionary
beneficiary covered by paragraph (d), after the death of the reversionary
beneficiary.
(2) A payment is not a splittable payment if it is prescribed by the
regulations for the purposes of this subsection.
For the purposes of this Part, a person’s interest in an eligible
superannuation plan is a reversionary interest at any time while
the person’s entitlement to benefits in respect of the interest is
conditional on the death of another person who is still living.
(1) A financial agreement is in force at any time when it is
binding on the parties in accordance with section 90G.
(2) A superannuation agreement is in force at any time when
the relevant financial agreement is in force.
(3) A flag lifting agreement is in force if, and only
if:
(a) it meets the requirements set out in subsection 90MN(3); and
(b) it has not been set aside by a court and has not been
terminated.
(1) A financial agreement under Part VIIIA may include an agreement
that deals with superannuation interests of either or both of the parties to the
agreement as if those interests were property. It does not matter whether or not
the superannuation interests are in existence at the time the agreement is
made.
(2) The part of the financial agreement that deals with superannuation
interests is a superannuation agreement for the purposes of this
Part.
(3) A superannuation agreement has effect only in accordance with this
Part. In particular, it cannot be enforced under Part VIIIA.
(4) A superannuation agreement that is included in a financial agreement
under section 90B (in contemplation of marriage) has no effect unless and
until the parties marry.
(5) In applying sections 90B, 90C and 90D for the purposes of this
Division, a superannuation interest of a party to a financial agreement is
treated as being acquired at the time when that party first becomes a member of
the eligible superannuation plan in respect of that interest.
The operative time for a payment split under a
superannuation agreement or flag lifting agreement is the beginning of the
fourth working day after the day on which a copy of the agreement is served on
the trustee, accompanied by:
(a) either:
(i) a copy of the decree absolute dissolving the marriage; or
(ii) a breakdown declaration with a declaration time that is not more than
28 days before the service on the trustee; and
(b) if a form of declaration is prescribed for the purposes of this
paragraph—a declaration in that form.
(1) This section applies to a superannuation interest if:
(a) the interest is identified in a superannuation agreement or flag
lifting agreement; and
(b) the agreement does one of the following:
(i) it provides that the actuarial method is to apply and it identifies a
percentage for that purpose;
(ii) it provides that the fixed percentage method is to apply and it
identifies a percentage for that purpose;
(iii) it provides that the transfer amount method is to apply and it
identifies an amount for that purpose; and
(c) the agreement is in force at the operative time; and
(d) the interest is not an unsplittable interest.
(2) The following provisions begin to apply to the interest at the
operative time.
(3) Whenever a splittable payment becomes payable in respect of the
interest:
(a) the non-member spouse is entitled to be paid the amount (if any) that
is calculated under subsection (4); and
(b) there is a corresponding reduction in the entitlement of the person to
whom the splittable payment would have been made but for the payment
split.
(4) The amount is calculated as follows:
(a) for the actuarial method or transfer amount method, the amount is
calculated in accordance with the regulations; or
(b) for the fixed percentage method—the amount is calculated by
applying the identified percentage to the splittable payment.
(5) Subject to section 90MV, this section continues to apply to the
superannuation interest even if the agreement referred to in subsection (1)
later ceases to be in force.
The operative time for a payment flag under a
superannuation agreement is the time when a copy of the agreement is served on
the trustee, accompanied by:
(a) either:
(i) a copy of the decree absolute dissolving the marriage; or
(ii) a breakdown declaration with a declaration time that is not more than
28 days before the service on the trustee; and
(b) if a form of declaration is prescribed for the purposes of this
paragraph—a declaration in that form.
(1) This section applies to a superannuation interest if:
(a) the interest is identified in a superannuation agreement;
and
(b) the agreement provides that the interest is to be subject to a payment
flag under this Part; and
(c) the agreement is in force at the operative time; and
(d) the interest is not an unflaggable interest.
(2) A payment flag starts to operate on the superannuation interest at the
operative time and continues to operate until either:
(a) a court terminates the operation of the payment flag by an order
mentioned in section 90MM; or
(b) a flag lifting agreement is served on the trustee as mentioned in
section 90MI in respect of the superannuation interest.
(3) If a payment flag ceases to operate because of paragraph (2)(b),
the cessation is not affected by a later termination of the flag lifting
agreement.
(4) While a payment flag is operating on a superannuation interest, the
trustee must not make any splittable payment to any person in respect of the
interest.
Penalty: 50 penalty units.
Note: The penalty for a body corporate is 250 penalty units.
See subsection 4B(3) of the Crimes Act 1914.
(5) If a splittable payment becomes payable in respect of a superannuation
interest while a payment flag is operating, the trustee must, within 14 days
after it became payable, give written notice to the member spouse and the
non-member spouse.
Penalty: 50 penalty units.
Note: The penalty for a body corporate is 250 penalty units.
See subsection 4B(3) of the Crimes Act 1914.
(6) Subsection (5) does not apply if the trustee has previously given
a notice under that subsection, for an earlier splittable payment, in respect of
the payment flag.
(7) If either spouse dies while a payment flag is operating:
(a) the payment flag nevertheless continues to operate; and
(b) the legal personal representative of the deceased spouse has all the
rights the deceased spouse would have had in respect of the payment
flag.
Note: The rights of the legal personal representative under
paragraph (b) include the right to enter into a flag lifting agreement
under section 90MN.
If a court makes an order under section 90K setting aside a
financial agreement in respect of which a payment flag is operating, the court
may also make an order terminating the operation of the flag.
Note: Under section 90MH, a superannuation agreement
must be part of a financial agreement. Therefore, setting aside the financial
agreement also has the effect of setting aside the superannuation
agreement.
(1) At any time when a payment flag is operating on a superannuation
interest, the spouses may make an agreement (a flag lifting
agreement) that either:
(a) provides that the flag is to cease operating without any payment
split; or
(b) provides for a payment split as mentioned in paragraph
90MJ(1)(b).
(2) If the flag lifting agreement provides for a payment split, the
spouses may at any time make an agreement (a termination
agreement) that terminates the flag lifting agreement.
(3) A flag lifting agreement or termination agreement has no effect unless
it complies with the following requirements:
(a) the agreement must be signed by both spouses;
(b) for each spouse, the agreement must contain a statement that the
spouse has been provided with independent legal advice from a legal practitioner
as to the legal effect of the agreement;
(c) a certificate must be attached to the agreement, signed by the person
who provided the legal advice and stating that the advice was
provided;
(d) after the agreement is signed by the spouses, each spouse must be
provided with a copy of the agreement.
(4) A court may make an order setting aside a flag lifting agreement or
termination agreement if, and only if, the court is satisfied as to any of the
grounds set out in subsection 90K(1) (other than paragraph 90K(1)(e)).
(5) An order setting aside a flag lifting agreement also operates to set
aside the related financial agreement.
(6) An order under section 90K setting aside a financial agreement
also operates to set aside the related flag lifting agreement.
(1) A court cannot make an order under section 79 with respect to a
superannuation interest if:
(a) the superannuation interest is covered by a superannuation agreement
that is in force; or
(b) the non-member spouse has served a waiver notice on the trustee under
section 90MZA in respect of the interest; or
(c) a payment flag is operating on the superannuation interest.
Note: Under section 90MM, the court can terminate the
operation of a payment flag in certain circumstances.
(2) Subsection (1) does not prevent the court taking superannuation
interests into account when making an order with respect to other property of
the spouses.
(1) A breakdown declaration is a written declaration that
complies with this section.
(2) The declaration must be signed by at least one of the
spouses.
(3) If section 90MQ applies to the declaration, then the declaration
must state that:
(a) the spouses are married; and
(b) the spouses separated and thereafter lived separately and apart for a
continuous period of at least 12 months immediately before the declaration time;
and
(c) in the opinion of the spouse (or spouses) making the declaration,
there is no reasonable likelihood of cohabitation being resumed.
(4) If section 90MQ does not apply to the declaration, then the
declaration must state that the spouses are married, but are separated, at the
declaration time.
(5) For the purposes of this section, the question whether spouses lived
separately and apart for a continuous period of not less than 12 months before a
particular date is to be determined in the same way as it is under
section 48.
(6) In this section:
separated has the same meaning as in section 48 (as
affected by sections 49 and 50).
(1) This section applies to a declaration if, at the declaration time, the
total withdrawal value for all the superannuation interests of the member spouse
is more than the ETP threshold.
(2) This section does not apply in the circumstances (if any) prescribed
by the regulations.
(3) In this section:
ETP threshold means the upper limit that applies under
section 159SG of the Income Tax Assessment Act 1936 for the
financial year in which the declaration time occurs.
total withdrawal value means the amount determined in
accordance with the regulations.
A court may make such orders as it thinks necessary for the enforcement
of a payment split or payment flag under this Division.
(1) In proceedings under section 79 with respect to the property of
spouses, the court may, in accordance with this Division, also make orders in
relation to superannuation interests of the spouses.
Note: Sections 71A and 90MO limit the scope of
section 79.
(2) A court cannot make an order under section 79 in relation to a
superannuation interest except in accordance with this Part.
(1) A court, in accordance with section 90MS, may make the following
orders in relation to a superannuation interest (other than an unsplittable
interest):
(a) an order to the effect that, whenever a splittable payment becomes
payable in respect of the interest:
(i) the non-member spouse is entitled to be paid the amount (if any)
calculated in accordance with the regulations; and
(ii) there is a corresponding reduction in the entitlement of the person
to whom the splittable payment would have been made but for the order;
(b) such other orders as it thinks necessary for the enforcement of an
order under paragraph (a).
(2) Before making a splitting order in relation to a superannuation
interest, the court:
(a) must determine the overall value of the interest in accordance with
the regulations; and
(b) must allocate a base amount to the non-member spouse, not exceeding
the overall value.
Note: The base amount is used to calculate the entitlement
of the non-member spouse under the regulations.
(1) A court, in accordance with section 90MS, may make an order in
relation to a superannuation interest (other than an unflaggable
interest):
(a) directing the trustee not to make any splittable payment in respect of
the interest without the leave of the court; and
(b) requiring the trustee to notify the court, within a period specified
in the order, of the next occasion when a splittable payment becomes payable in
respect of the interest.
(2) In deciding whether to make an order in accordance with this section,
the court:
(a) must take into account the likelihood that a splittable payment will
soon become payable in respect of the superannuation interest; and
(b) may take into account such other matters as it considers
relevant.
(1) A court may, under section 79, make an order terminating the
operation of a payment split if:
(a) the superannuation agreement in respect of the payment split has
ceased to be in force; and
(b) the non-member spouse has not served a waiver notice on the trustee
under section 90MZA in respect of the payment split.
(2) The termination has effect for splittable payments that become payable
after the date specified in the order.
Any deduction that the trustee is entitled to make from a splittable
payment is to be deducted from the splittable payment before calculating any
payment split and before applying section 90MX.
(1) This section applies if 2 or more payment splits apply to the same
splittable payment.
(2) The payments splits are to be calculated in order of their operative
dates, starting with the earliest date.
(3) For the purpose of calculating each of those payment splits (other
than the one with the earliest operative date), the amount of the splittable
payment is taken to be reduced by the amount to which another person is entitled
under the payment split with the next earlier operative date.
Example: W has a superannuation interest that is subject to
3 payment splits in respect of W’s marriages to X, Y and Z (in that
order). The operative dates of the payment splits are in the same order as the
marriages. Assume each payment split provides for a 50% share to the non-member
spouse. W becomes entitled to a splittable payment of $100. The final payment
entitlements are as follows: X gets $50. Y gets $25. Z gets $12.50. W gets the
remaining $12.50.
(1) The regulations may prescribe:
(a) the fees that are payable to the trustee in respect of a payment
split; and
(b) the person or persons liable to pay the fees.
(2) The regulations may provide for different fees in different
circumstances.
(3) The fees for a payment split are due for payment at the operative
time.
(4) If a fee remains unpaid after the operative time:
(a) the amount of the fee is increased by an interest component,
calculated in accordance with the regulations; and
(b) the trustee may recover any unpaid amount by deduction from amounts
that would otherwise become payable to the person who is liable to pay the
fee.
(1) If the eligible superannuation plan for a payment split is a regulated
superannuation fund, then the entitlement of the non-member spouse is subject to
any regulations made under the SIS Act that provide for payment of that
entitlement to a regulated superannuation fund or RSA for the benefit of the
non-member spouse.
(2) If the eligible superannuation plan for a payment split is an RSA,
then the entitlement of the non-member spouse is subject to any regulations made
under the Retirement Savings Accounts Act 1997 that provide for payment
of that entitlement to a regulated superannuation fund or RSA for the benefit of
the non-member spouse.
(3) If the eligible superannuation plan for a payment split is a
constitutionally protected fund within the meaning of section 267 of the
Income Tax Assessment Act 1936, then the entitlement of the non-member
spouse is subject to any law or other instrument that provides for payment of
that entitlement to a regulated superannuation fund or RSA for the benefit of
the non-member spouse.
(1) If the non-member spouse serves a waiver notice on the trustee in
respect of a payment split, then the following provisions apply for each
splittable payment that becomes payable after the date specified in the waiver
notice:
(a) the non-member spouse is not entitled to be paid any amount under the
payment split in respect of the splittable payment;
(b) the entitlement of the person to whom the splittable payment would
have been made but for the payment split continues to be reduced in the same way
as it would have been reduced if the entitlement of the non-member spouse had
not been terminated.
(2) To be effective for the purposes of this section, a waiver notice must
be in the prescribed form and must be accompanied by:
(a) a statement to the effect that the non-member spouse has been provided
with independent financial advice from a prescribed financial adviser as to the
financial effect of the waiver notice; and
(b) a certificate signed by the person who provided the financial advice,
stating that the advice was provided.
(1) An eligible person may make an application to the trustee of an
eligible superannuation plan for information about a superannuation interest of
a member of the plan.
(2) The application must be accompanied by a declaration, in the
prescribed form, stating that the applicant requires the information for either
or both of the following purposes:
(a) to assist the applicant to properly negotiate a superannuation
agreement;
(b) to assist the applicant in connection with the operation of this Part
in relation to the applicant.
(3) If the trustee receives an application that complies with this
section, the trustee must, in accordance with the regulations, provide
information about the superannuation interest to the applicant.
Penalty: 50 penalty units.
Note: The penalty for a body corporate is 250 penalty units.
See subsection 4B(3) of the Crimes Act 1914.
(4) In this section:
eligible person, in relation to a superannuation interest of
a member of an eligible superannuation plan, means:
(a) the member; or
(b) a spouse of the member; or
(c) a person who intends to enter into a superannuation agreement with the
member.
If the non-member spouse dies after the operative date for a payment
split:
(a) the payment split nevertheless continues to operate; and
(b) the payment split then operates in favour of the legal personal
representative of the deceased spouse and is binding on that legal personal
representative; and
(c) the legal personal representative has all the rights the deceased
spouse would have had in respect of the payment split, including the right to
serve a waiver notice under section 90MZA.
(1) An order under this Part in relation to a superannuation interest may
be expressed to bind the person who is the trustee of the eligible
superannuation plan at the time when the order takes effect, but only if that
person has been accorded procedural fairness in relation to the making of the
order.
(2) If an order is binding on the person who is the trustee of an eligible
superannuation plan at the time when the order takes effect, then the order is
also binding (by force of this subsection) on any person who subsequently
becomes the trustee of that eligible superannuation plan.
The trustee of an eligible superannuation plan is not liable for loss or
damage suffered by any person because of things done (or not done) by the
trustee in good faith in reliance on:
(a) any document served on the trustee for the purposes of this Part;
or
(b) an order made by a court in accordance with this Part.
(1) If a document is required or permitted to be served for the purposes
of this Part on the trustee of an eligible superannuation plan, the document may
be served in any of the ways in which a document may be served under the Rules
of Court.
(2) Subsection (1) is in addition to any other method of service
permitted by law.
(1) A person is guilty of an offence if:
(a) the person makes a statement in a declaration, knowing that the
statement is false or misleading; and
(b) the declaration is served on the trustee of an eligible superannuation
plan for the purposes of this Part.
(2) An offence against subsection (1) is punishable by imprisonment
for a period of up to 12 months.
(3) Subsection (1) does not apply if the statement is not false or
misleading in a material particular.
Superannuation Industry
(Supervision) Act 1993
5 Subsection 10(1)
Insert:
member has a meaning affected by section 15B.
6 After section 15A
Insert:
(1) The regulations may provide that a person is to be treated, or is not
to be treated, as being a member of a superannuation fund for the
purposes of this Act or specified provisions of this Act.
(2) This Act applies with such modifications (if any) as are prescribed in
relation to a person who is a member of a superannuation fund because of
regulations made for the purposes of this section.
(3) In this section:
modifications includes additions, omissions and
substitutions.
Superannuation (Resolution
of Complaints) Act 1993
7 Subsection 3(2)
Insert:
beneficiary has a meaning affected by
section 4B.
8 Subsection 3(2)
Insert:
member has a meaning affected by section 4B.
9 After section 4A
Insert:
(1) The regulations may provide that a person is to be treated, or is not
to be treated, as being:
(a) a member of a superannuation fund; or
(b) a beneficiary of an approved deposit fund;
for the purposes of this Act or specified provisions of this Act.
(2) Without limiting subsection (1), regulations for the purposes of
that subsection may be made in relation to a person who is entitled to become,
or has applied to become, a member of a superannuation fund or a beneficiary of
an approved deposit fund.
(3) This Act applies with such modifications (if any) as are prescribed in
relation to a person who is a member of a superannuation fund, or a beneficiary
of an approved deposit fund, because of regulations made for the purposes of
this section.
(4) In this section:
modifications includes additions, omissions and
substitutions.