Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Judges and Governors-General Legislation Amendment (Family Law) Bill 2012

Schedule 1 Amendment of the Judges’ Pensions Act 1968

Part 1 Amendments

1  Subsection 4(1)

Insert:

accrued pension factor or APF has the meaning given by subsection 17AD(6).

2  Subsection 4(1)

Insert:

APF : see accrued pension factor .

3  Subsection 4(1)

Insert:

associate deferred pension means an associate deferred pension under subsection 17AA(3).

4  Subsection 4(1)

Insert:

associate immediate pension means an associate immediate pension under subsection 17AA(2).

5  Subsection 4(1)

Insert:

associate pension means an associate deferred pension or associate immediate pension.

6  Subsection 4(1)

Insert:

base amount means:

                     (a)  for a splitting agreement—the base amount specified in, or calculated under, the agreement; or

                     (b)  for a splitting order—the amount allocated under subsection 90MT(4) of the Family Law Act 1975 .

7  Subsection 4(1)

Insert:

family law value means the amount determined in accordance with regulations under the Family Law Act 1975 that apply for the purposes of paragraph 90MT(2)(a) of that Act. In applying those regulations, the relevant date is taken to be the date on which the operative time occurs.

Note:          This amount is determined by applying those regulations, whether or not an order has been made under subsection 90MT(1) of that Act.

8  Subsection 4(1)

Insert:

mandatory retirement day of a person who has served as a Judge means the day on which the person would, under the terms of the person’s appointment as a Judge or otherwise, be required to retire.

9  Subsection 4(1)

Insert:

medical practitioner means a person registered or licensed as a medical practitioner under a law of a State or Territory that provides for the registration or licensing of medical practitioners.

10  Subsection 4(1)

Insert:

member spouse has the same meaning as in Part VIIIB of the Family Law Act 1975 .

11  Subsection 4(1)

Insert:

non-member spouse has the same meaning as in Part VIIIB of the Family Law Act 1975 .

12  Subsection 4(1)

Insert:

non-standard pension means a pension under section 9, 10, 11 or 12.

13  Subsection 4(1)

Insert:

operative time , in relation to a splitting agreement or splitting order, means the time that is the operative time for the purposes of Part VIIIB of the Family Law Act 1975 in relation to a payment split under the agreement or order.

14  Subsection 4(1)

Insert:

original interest means a superannuation interest to which section 17AA applies.

15  Subsection 4(1)

Insert:

payment split has the same meaning as in Part VIIIB of the Family Law Act 1975 .

16  Subsection 4(1)

Insert:

Pension Orders means Pension Orders made under subsection 17AI(1).

17  Subsection 4(1)

Insert:

permanently incapacitated has the meaning given by subsection 17AB(4).

18  Subsection 4(1)

Insert:

qualified for a pension : a person who has served as a Judge has qualified for a pension on a particular day if:

                     (a)  the person would have become entitled to a pension under subsection 6(1) if the person had retired on that day; or

                     (b)  the person would have become entitled to a pension under subsection 6(2D) if the person had ceased to hold office as a Judge on that day.

19  Subsection 4(1)

Insert:

qualifying service days has the meaning given by section 4AD.

20  Subsection 4(1)

Insert:

retirement pension means a pension under section 6.

21  Subsection 4(1)

Insert:

scheme value means the amount determined under the Pension Orders.

22  Subsection 4(1)

Insert:

splitting agreement means:

                     (a)  a superannuation agreement (within the meaning of Part VIIIB of the Family Law Act 1975 ); or

                     (b)  a flag lifting agreement (within the meaning of that Part) that provides for a payment split.

23  Subsection 4(1)

Insert:

splitting order has the same meaning as in Part VIIIB of the Family Law Act 1975 .

24  Subsection 4(1)

Insert:

splitting percentage means:

                     (a)  for a splitting agreement—the percentage specified in the agreement under subparagraph 90MJ(1)(c)(iii) of the Family Law Act 1975 ; or

                     (b)  for a splitting order—the percentage specified in the order under subparagraph 90MT(1)(b)(i) of that Act.

25  Subsection 4(1)

Insert:

spouse pension means a pension under section 7.

26  Subsection 4(1)

Insert:

standard pension means:

                     (a)  a retirement pension; or

                     (b)  a spouse pension; or

                     (c)  a pension under section 8; or

                     (d)  an associate pension.

27  Subsection 4(1)

Insert:

superannuation interest has the same meaning as in Part VIIIB of the Family Law Act 1975 .

28  Subsection 4(1)

Insert:

transfer amount means:

                     (a)  if a splitting percentage applies—the amount worked out by multiplying the splitting percentage by the greater of:

                              (i)  the family law value; and

                             (ii)  the scheme value; or

                     (b)  if a base amount applies and the scheme value is not more than the family law value—the base amount; or

                     (c)  if a base amount applies and the scheme value is more than the family law value—the amount worked out using the formula:

29  Subsection 4(1)

Insert:

transfer factor means the number rounded to 6 decimal places (rounding up if the seventh decimal place is 5 or more) that is worked out by dividing the number of whole dollars in the transfer amount by the number of whole dollars in the scheme value.

30  After section 4AC

Insert:

4AD   Qualifying service days

                   The qualifying service days of a person who has served as a Judge is the number of days worked out using the following formula:

where:

appointment age means the person’s age in days on the first day of the period of his or her service as a Judge.

non-service days means the number of days the person did not serve as a Judge in the period that:

                     (a)  starts on the person’s first day of service as a Judge; and

                     (b)  ends on the day before:

                              (i)  if paragraph (a) or (c) of the definition of qualification age in this section applies in relation to the person—the first day referred to in that paragraph; or

                             (ii)  if a pension under subsection 6(2) has become payable to the person—the day on which the person retired; or

                            (iii)  otherwise—the day on which the person died.

qualification age means:

                     (a)  if a pension under subsection 6(1) or (2D) has become payable to the person—the person’s age in days on the first day on which the person qualified for that pension; or

                     (b)  if a pension under subsection 6(2) has become payable to the person—the person’s age in days on the first day on which the person would have qualified for a pension under subsection 6(1) or (2D) if the person had continued to serve as a Judge until the person’s mandatory retirement day; or

                     (c)  if:

                              (i)  the person died before a pension became payable to the person; and

                             (ii)  the person had qualified for a pension under subsection 6(1) on a day before the person died;

                            the person’s age in days on the first day the person so qualified; or

                     (d)  if the person died before a pension became payable to the person and subparagraph (c)(ii) does not apply—the person’s age in days on the first day on which the person would have qualified for a pension under subsection 6(1) or (2D) if the person had continued to serve as a Judge until the person’s mandatory retirement day.

31  Subsections 6A(2) and (4)

Omit “If the”, substitute “Subject to sections 16, 17AD and 17AH, if the”.

32  Subsection 6B(2)

Omit “The annual”, substitute “Subject to sections 16, 17AD and 17AH, the annual”.

33  Subsection 6C(3)

Omit “If a”, substitute “Subject to sections 16, 17AD and 17AH, if a”.

34  Subsection 7(1)

Omit “Where”, substitute “Subject to section 17AH, if”.

35  At the end of subsection 7(1)

Add:

Note:          If section 17AD applies in relation to the spouse pension, the rate of the relevant pension may be reduced under subsection 17AD(4).

36  Subsection 8(1)

Omit “(1)”.

37  At the end of section 8

Add:

Note:          The rate of the pension that would have been payable to the retired Judge may be reduced: see subsection 17AD(8) or 17AH(5).

38  Subsection 16(1)

After “this Act”, insert “(disregarding sections 17AD and 17AH)”.

39  After section 17

Insert:

17AA   Associate pension for non-member spouse

             (1)  This section applies to a superannuation interest under this Act (the original interest ) if:

                     (a)  the Secretary of the Department receives a splitting agreement or splitting order in respect of the original interest; and

                     (b)  the original interest is not an entitlement to a non-standard pension; and

                     (c)  the member spouse and the non-member spouse are both alive at the operative time; and

                     (d)  if a base amount applies—the base amount at the operative time is not more than the family law value or scheme value.

Note:          If the same superannuation interest is subject to 2 or more payment splits, then this section applies separately in relation to each of those splits.

Immediate pension if operative time in payment phase

             (2)  If, at the operative time, a standard pension is payable in respect of the original interest, then the non-member spouse is entitled to an associate immediate pension from the operative time at the rate calculated under the Pension Orders by reference to the transfer amount.

Deferred pension if operative time in growth phase

             (3)  If, at the operative time, a standard pension is not payable in respect of the original interest, then the non-member spouse is entitled to an associate deferred pension in accordance with section 17AB.

Rounding of transfer amount

             (4)  For the purposes of subsection (2), the transfer amount is to be rounded to the nearest cent (rounding 0.5 cents upwards).

17AB   Associate deferred pension

Annual rate

             (1)  The associate deferred pension is payable at an annual rate calculated under the Pension Orders by reference to the transfer amount.

             (2)  For the purposes of subsection (1), the transfer amount is to be rounded to the nearest cent (rounding 0.5 cents upwards).

When the pension is payable

             (3)  Subject to section 17AC, the pension is payable from the later of:

                     (a)  the operative time; and

                     (b)  the earliest of the following days:

                              (i)  if the non-member spouse is permanently incapacitated—the day that the Secretary of the Department considers to be the day on which the spouse became permanently incapacitated;

                             (ii)  a day notified to the Secretary under subsection (5) of this section;

                            (iii) the day on which the non-member spouse turns 65.

             (4)  The non-member spouse is permanently incapacitated if the Secretary is satisfied that the spouse is unlikely, because of ill-health (whether physical or mental), to engage in gainful employment for which the spouse is reasonably qualified by education, training or experience.

             (5)  The non-member spouse may give a written notice to the Secretary specifying a day that is not before the day on which the non-member spouse turns 60.

Death of non-member spouse

             (6)  If the non-member spouse dies before the pension becomes payable, an amount calculated under the Pension Orders must be paid to:

                     (a)  the legal personal representative of the spouse; or

                     (b)  if no such legal personal representative can be found—any individual or individuals that the Secretary determines.

             (7)  An amount under subsection (6) is payable out of the Consolidated Revenue Fund, which is appropriated accordingly.

17AC   Application for payment of associate deferred pension

             (1)  The associate deferred pension is not payable to the non-member spouse unless:

                     (a)  a written application has been made to the Secretary of the Department requesting payment of the pension; and

                     (b)  the applicant has provided any information that is necessary to determine whether the pension is payable.

             (2)  An application for payment on the ground of permanent incapacity must be accompanied by:

                     (a)  a certificate given by a medical practitioner nominated by, or on behalf of, the non-member spouse; and

                     (b)  such additional information or documents as the Secretary requires.

             (3)  The certificate mentioned in paragraph (2)(a) must include a statement to the effect that, in the opinion of the medical practitioner, the non-member spouse is permanently incapacitated.

17AD   Operative time during growth phase—reduction of retirement pension etc.

             (1)  This section applies if:

                     (a)  at the operative time, a retirement pension is not payable to a Judge in respect of the original interest; and

                     (b)  after the operative time:

                              (i)  the retirement pension becomes payable to the Judge; or

                             (ii)  the Judge dies before the retirement pension becomes payable and a spouse pension becomes payable to a spouse of the Judge; and

                     (c)  if:

                              (i)  the retirement pension is a pension under subsection 6(2); or

                             (ii)  the Judge had not qualified for a pension under subsection 6(1) on a day before the Judge died;

                            the Judge would have qualified for a pension under subsection 6(1) or (2D) if the Judge had continued to serve as a Judge until the Judge’s mandatory retirement day.

Reduction of pensions

             (2)  In working out the annual rate of the retirement pension that is payable:

                     (a)  work out the annual rate of the pension under section 6A, 6B or 6C; and

                     (b)  reduce that rate by the amount worked out using the formula in subsection (5) of this section.

             (3)  If section 16 applies in relation to the retirement pension, the annual rate worked out under paragraph (2)(a) must take into account a reduction of the amount of the pension under that section.

             (4)  For the purposes of working out the rate of the spouse pension that is payable under section 7, the rate of the relevant pension in relation to the Judge is to be worked out as follows:

                     (a)  work out the annual rate of the relevant pension under section 6A, 6B or 6C;

                     (b)  reduce that rate by the amount worked out using the formula in subsection (5) of this section.

             (5)  The formula is:

where:

pension rate means the annual rate of the retirement pension or relevant pension worked out under section 6A (disregarding subsection 6A(1)).

Note:          If the original interest has been split more than once, see section 17AE for a modification of this formula.

Accrued pension factor

             (6)  The accrued pension factor for the Judge is:

                     (a)  if at the operative time the Judge was at least 60 and had served as a Judge for at least 10 years—1; or

                     (b)  otherwise—the number worked out by dividing the number of days the Judge had served as a Judge at the operative time by the qualifying service days of the Judge.

             (7)  The number worked out under paragraph (6)(b) is to be rounded to 6 decimal places (rounding up if the seventh decimal place is 5 or more).

Effect of reduction on other pensions

             (8)  If:

                     (a)  the annual rate of a retirement pension of a retired Judge is reduced under subsection (2); and

                     (b)  a pension under section 8 later becomes payable because the Judge dies;

then, for purposes of section 8, the rate of the pension that would have been payable to the Judge is the rate worked out for the retirement pension under subsection (2) of this section (disregarding subsection (3)).

             (9)  If the rate of a retirement pension or relevant pension is reduced under this section, the reduction is to be disregarded in working out the rate of any non-standard pension that later becomes payable.

17AE   Reduction of retirement pension etc. if original interest has been split more than once

             (1)  If:

                     (a)  section 17AD applies in relation to an original interest; and

                     (b)  before the retirement pension or spouse pension referred to in that section becomes payable, the original interest has been split more than once because section 17AA has previously applied;

the formula in subsection 17AD(5) is modified as set out in subsection (2) of this section.

             (2)  In applying the formula in subsection 17AD(5), the component (APF ยด Transfer factor) is to be replaced by the number worked out using the following method statement, based on the chronological order of the operative times (starting with the earliest):

Method statement

Step 1.   Work out a factor (the interim factor ) for the first split using the formula:

             

Step 2.   Work out a factor (the interim factor ) for the next split (the current split ), using the formula:

             

Step 3.   Work out a factor for each remaining split (if any), using the formula in step 2.

Step 4.   Add together the factors worked out under steps 1 to 3.

Example:    Assume 2 splits, with the first split having an APF of 0.4 and a transfer factor of 0.5 and the second split having an APF of 0.6 and a transfer factor of 0.5. Applying the above steps, the replacement number for the formula is 0.4, that is:

17AF   Operative time during growth phase—reduction of benefit under section 12A

                   If:

                     (a)  at the operative time, a standard pension is not payable in respect of the original interest; and

                     (b)  after the operative time, a benefit under section 12A becomes payable in respect of the original interest because of paragraph 12A(1)(a);

the amount of the benefit (the benefit amount ) is reduced, with effect from the operative time, by the amount calculated by multiplying the benefit amount, worked out at that time, by the transfer factor.

17AG   Operative time during growth phase—reduction of associate deferred pension

                   If:

                     (a)  at the operative time, a standard pension is not payable in respect of the original interest; and

                     (b)  the original interest is an entitlement to an associate deferred pension;

the annual rate of the associate deferred pension (when it becomes payable) is reduced to the amount calculated under the Pension Orders.

Note:          Although an associate immediate pension becomes payable at the operative time, an associate deferred pension will often not become payable until some time after the operative time.

17AH   Operative time during payment phase—reduction of standard pension

             (1)  This section applies if, at the operative time, a standard pension is payable in respect of the original interest.

Reduction of pensions

             (2)  If the standard pension is not a retirement pension, the rate of the pension is reduced to the amount calculated under the Pension Orders.

             (3)  If the standard pension is a retirement pension, the annual rate of the pension is worked out as follows:

                     (a)  work out the annual rate of the pension under section 6A, 6B or 6C;

                     (b)  reduce that rate to the amount calculated under the Pension Orders.

             (4)  If section 16 applies in relation to the retirement pension, the annual rate worked out under paragraph (3)(a) must take into account a reduction of the pension under that section.

Effect of reduction on other pensions

             (5)  If:

                     (a)  the annual rate of a retirement pension of a retired Judge is reduced under subsection (3); and

                     (b)  a pension under section 8 later becomes payable because the Judge dies;

then, for purposes of section 8, the rate of the pension that would have been payable to the Judge is the rate worked out for the retirement pension under subsection (3) of this section (disregarding subsection (4)).

             (6)  If the annual rate of a retirement pension is reduced under this section, the reduction is to be disregarded in working out the rate of any non-standard pension that later becomes payable.

17AI   Pension Orders

             (1)  The Minister may, by legislative instrument, make Pension Orders providing for matters:

                     (a)  required or permitted by this Act to be provided; or

                     (b)  necessary or convenient to be provided in order to carry out or give effect to this Act.

             (2)  Despite subsection 44(2) of the Legislative Instruments Act 2003 , section 42 (disallowance) of that Act applies to the Pension Orders.

17AJ   Compensation for acquisition of property

             (1)  If the operation of sections 17AA to 17AH, or the Pension Orders, would result in an acquisition of property from a person otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of compensation to the person.

             (2)  If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court of Australia for the recovery from the Commonwealth of such reasonable amount of compensation as the Court determines.

             (3)  In this section:

acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution.

just terms has the same meaning as in paragraph 51(xxxi) of the Constitution.

40  At the end of paragraphs 17A(a) to (c)

Add “or”.

41  At the end of section 17A

Add:

               ; or (f)  a decision of the Secretary of the Department under subparagraph 17AB(3)(b)(i); or

                     (g)  a decision of the Secretary of the Department under subsection 17AB(4); or

                     (h)  a decision of the Secretary of the Department under paragraph 17AB(6)(b).

42  Subsection 21(1)

Omit “(1)”.

43  Subsection 21(2)

Repeal the subsection.



 

Part 2 Application and transitional provisions

44  Definitions

In this Part:

commencement time means the time when this Schedule commences.

family law value means the amount determined in accordance with regulations under the Family Law Act 1975 that apply for the purposes of paragraph 90MT(2)(a) of that Act. In applying those regulations, the relevant date is taken to be the date on which the commencement time occurs.

Note:          This amount is determined by applying those regulations, whether or not an order has been made under subsection 90MT(1) of that Act.

item 48 orders means the orders made under item 48 of this Schedule.

Judges’ Pensions Act means the Judges’ Pensions Act 1968 .

transfer amount means the amount rounded to the nearest cent (rounding 0.5 cents upwards) that is worked out by multiplying the splitting percentage by the greater of:

                     (a)  the family law value; and

                     (b)  the amount determined under the item 48 orders.

45  Application—operative time after commencement time

The amendments made by this Schedule apply in relation to a splitting agreement or splitting order if the operative time in relation to the agreement or order is at or after the commencement time.

46  Application—operative time before commencement time and Judge not in receipt of pension

(1)       Subject to subitem (2), the amendments made by this Schedule also apply in relation to a splitting agreement or splitting order if:

                     (a)  the operative time in relation to the agreement or order is before the commencement time; and

                     (b)  the agreement or order relates to a superannuation interest under the Judges’ Pensions Act of a Judge who was appointed before the commencement time; and

                     (c)  immediately before the commencement time, the Judge is not in receipt of a retirement pension in respect of the superannuation interest.

(2)       The following provisions apply in relation to the splitting agreement or splitting order as if a reference in the provisions to the operative time were a reference to the commencement time:

                     (a)  sections 17AA, 17AB, 17AD (other than subsection (6)) and 17AF of the Judges’ Pensions Act, as inserted by this Schedule;

                     (b)  the definition of family law value in subsection 4(1) of that Act, as inserted by this Schedule.

47  Transitional—operative time before commencement time and retired Judge in receipt of pension

(1)       This item applies if:

                     (a)  a splitting agreement or splitting order relates to a superannuation interest under the Judges’ Pension Act of a retired Judge who was appointed as a Judge before the commencement time; and

                     (b)  the operative time in relation to the agreement or order is before the commencement time; and

                     (c)  immediately before the commencement time, the retired Judge is in receipt of a retirement pension in respect of the superannuation interest; and

                     (d)  the retired Judge, and the non-member spouse in relation to the superannuation interest, are both alive at the commencement time.

Immediate transitional pension for non-member spouse

(2)       The non-member spouse in relation to the superannuation interest is entitled to an immediate transitional pension from the commencement time at the rate calculated under the item 48 orders by reference to the transfer amount.

(3)       An immediate transitional pension is due daily but is payable monthly.

(4)       An immediate transitional pension is payable out of the Consolidated Revenue Fund, which is appropriated accordingly.

Reduction of retirement pension

(5)       The annual rate of the retirement pension payable under the Judges’ Pension Act is reduced from the commencement time to the amount calculated under the item 48 orders.

(6)       However, if the non-member spouse dies before the retired Judge, subitem (5) stops applying in relation to the retirement pension.

No reduction of other pensions

(7)       The reduced annual rate of the retirement pension under subitem (5) is to be disregarded in working out the rate of the following pensions if they become payable after the commencement time:

                     (a)  a pension under section 8 of the Judges’ Pensions Act;

                     (b)  a non-standard pension.

Splitting of immediate transitional pension

(8)       If:

                     (a)  a splitting agreement or splitting order is made after the commencement time; and

                     (b)  the agreement or order relates to an immediate transitional pension;

the Judges’ Pensions Act, as amended by this Schedule, applies in relation to the pension as if the pension were:

                     (c)  a superannuation interest under that Act; and

                     (d)  a standard pension payable in respect of that interest.

48  Minister may make orders

(1)       The Minister may, by legislative instrument, make orders providing for matters:

                     (a)  required or permitted by this Part to be provided; or

                     (b)  necessary or convenient to be provided in order to carry out or give effect to this Part.

(2)       Despite subsection 44(2) of the Legislative Instruments Act 2003 , section 42 (disallowance) of that Act applies to orders made under subitem (1).

49  Compensation for acquisition of property

(1)       If the operation of this Part, or the item 48 orders, would result in an acquisition of property from a person otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of compensation to the person.

(2)       If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court of Australia for the recovery from the Commonwealth of such reasonable amount of compensation as the Court determines.

(3)       In this item:

acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution.

just terms has the same meaning as in paragraph 51(xxxi) of the Constitution.