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Tuesday, 30 November 2004
Page: 5

Senator ELLISON (Minister for Justice and Customs) (12:44 PM) —I thank senators for their contributions to the debate on the Family Law Amendment (Annuities) Bill 2004. At first blush it is a bill which might escape attention, but on further inquiry it is a bill which indeed has some important provisions for Australians, particularly those who are going through a divorce through the Family Court. The bill will appropriately bring the annuity products that are very much like superannuation within the legislative scheme in the Family Law Act for the splitting of super on marriage breakdown or divorce. We have had provisions which have brought in superannuation, and quite properly so, and there are annuity products which are very much like superannuation which need to be treated in the same manner. That is what this bill does.

Opposition senators have pointed out that this bill will be beneficial to couples, allowing more flexible settlements of property upon marriage breakdown. The Democrats have indicated that more attention should be given to providing more post-retirement income for women. I would note that the amendments in this bill indeed address that issue, even if it is in a relatively small way. These amendments allow couples to split annuity payments, thus allowing the non-member spouse—often a woman—to gain access to this retirement related income. Of course, that does go some way towards addressing the concern expressed by the Democrats.

There were a couple of other points which I think need addressing. The first concerns a comment by the opposition in relation to preservation requirements where an annuity is split. There was a suggestion that the spouse who is not the contractual party to the annuity—or, in the terms of the Family Law Act, the non-member spouse—may be able to access annuity payments even though the purchaser of the annuity—the member spouse—has not satisfied a contractual preservation requirement such as retirement age. This is not the case. Under the amendments being proposed to the Family Law Act, the non-member spouse will not be able to access annuity payments until the member spouse satisfies the preservation requirement and the member spouse is entitled to be paid. Indeed, that follows the principle that, where the spouse who has entered into the contract reaches preservation age, only then can annuities be paid out. Accordingly, the non-member spouse enjoys that benefit but not before the member spouse has reached that preservation age. That is much like the principle that you can pass on to someone else only the right that you have yourself; you cannot pass on a greater entitlement. That is precisely the principle that is reflected here.

The second point which was raised in the debate, which I also wish to comment on, relates to the suggestion by the Democrats that the extension of the Family Law Act provisions on super splitting to include eligible annuities will mean that term annuities and lifetime annuities will be outside the scope of those provisions. The extension of the Family Law Act provisions to include eligible annuities will extend those provisions to all annuities currently in payment that were purchased with rolled-over superannuation amounts, including annuities payable for a fixed term or annuities payable for the lifetime of the purchaser. This is a valuable amendment to the Family Law Act. I thank senators for their contributions on and their support for the bill. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.