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Wednesday, 21 March 2012
Page: 3893

Mr GRAY (Brand—Special Minister of State and Minister for the Public Service and Integrity) (16:12): I thank all speakers on the Judges and Governors-General Legislation Amendment (Family Law) Bill 2012 to date. The bill will implement new family law arrangements for the federal judiciary and governors-general by amending the Judges' Pensions Act 1968 and the Governor-General Act 1974. The new arrangements will allow for a former spouse of a judge or a Governor-General to receive his or her share of a superannuation benefit as a separate benefit at the time of a family law split. This is consistent with family law, which aims to provide separating parties with a clean break.

Under the Family Law Act 1975, superannuation interests for part of the property of a married or de facto partner can be split between separating parties at the time of a property settlement. However, the current family law arrangements for judges and governors-general are inconsistent with the family law policy of a clean break. The arrangements are also out of step with other Commonwealth defined benefit superannuation schemes, which have since 2004 provided separate interest benefits to former spouses of scheme members in a family law split.

For judges, the current percentage-only arrangements mean that any split of the pension of a judge in a family law settlement only occurs when pension payments are made to a retired judge. Payments to a former spouse do not commence until the judge retires and cease upon the judge's death. There is no certainty as to the overall quantum of the benefit that the former spouse is entitled to receive.

For governors-general, there are currently no scheme-specific separate interest arrangements in place to cover the splitting of superannuation pensions. The bill will address these issues by putting in place scheme-specific arrangements for judges and governors-general which provide a separate interest benefit in the event of a family law split of a superannuation benefit. As well as bringing the arrangements into line with the family law policy and with other Commonwealth superannuation schemes, the new arrangements will give the parties greater control over their respective individual benefits. The proposed changes do not mean that the Commonwealth will be determining property settlements. The Family Court or the separating parties will decide whether the superannuation benefit is to be split and, if so, the amount or percentage of the split.

The arrangements in the bill will operate when a splitting order or an agreement is made in relation to a superannuation interest in the scheme. The interest of a judge or Governor-General in the superannuation scheme will be valued at the time of the family law split and a separate interest for the former spouse will also be created at this time. If a pension is not payable to a judge or Governor-General at the time of the split, the pension of the former spouse will be deferred. The deferred pension will become payable when the former spouse reaches his or her retirement age or before this if he or she is certified as permanently incapacitated. Once the judge or Governor-General retires and commences a pension that pension will be adjusted to take account of the amount transferred from the former spouse. If at that time of the family law split, a pension is being paid in respect of the judge or Governor-General, the pension for the former spouse will be payable immediately and the pension of the judge or Governor-General will be adjusted to take account of the amount transferred to the former spouse.

The bill also includes transitional provisions to cover existing family law cases in the Judges' Pensions Scheme. The transitional arrangements provide the former spouse with a separate interest pension from the date the legislation comes into force, based on the splitting percentage in the court order or agreement. There are also safeguards to make sure that there would be no unintended consequences for the parties arising from the proposed new arrangements.

These reforms proposed by the bill are an important step to align the family law splitting arrangements for judges and Governors-General with family law principles and to bring consistency to the family law arrangements across the Commonwealth defined benefit superannuation schemes. I commend the bill to the chamber.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.