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Thursday, 12 December 2002
Page: 10271

Ms WORTH (Parliamentary Secretary to the Minister for Health and Ageing) (10:20 AM) —I move:

That this bill be now read a second time.

This bill proposes amendments to a number of acts that deal with superannuation arrangements for members of the Commonwealth civilian schemes and members of the Australian Defence Force schemes.

These superannuation arrangements are being amended as a consequence of changes to the Family Law Act 1975 and regulations under that act in relation to the new arrangements for the splitting of superannuation on marriage breakdown. Under the new arrangements superannuation will be treated as property of a marriage and will be able to be divided as part of a property settlement. The new family law regime will enable separating parties or the Family Court to value a member's superannuation interest and make an agreement or order for the superannuation to be split.

The bill provides for a framework within the relevant scheme for dealing with an agreement made by separating parties or a Family Court order that provides in the context of an overall property settlement for an amount of the member's superannuation to be allocated and paid to the member's former spouse.

The framework will enable a separate superannuation benefit account to be established for the member's former spouse where the scheme is advised that an amount of the member's superannuation is to be allocated to their former spouse. The bill will either amend the relevant acts or allow ministerial orders to be made to provide for indexation of the former spouse's separate benefit before payment and the payment of that benefit. The benefit will either be paid as a pension or lump sum in such form and circumstances as the scheme rules permit.

The bill will also amend the relevant acts or allow ministerial orders to be made to provide for a reduction in the benefit paid to or in respect of the member.

To put in place the framework, amendments are proposed to seven acts: the Defence Act 1903, the Defence Forces Retirement Benefits Act 1948, the Defence Force Retirement and Death Benefits Act 1973, the Military Superannuation and Benefits Act 1991, the Superannuation Act 1922, the Superannuation Act 1976 and the Superannuation Act 1990.

As the majority of the rules for the Public Sector Superannuation Scheme, established under the Superannuation Act 1990, and the Military Superannuation and Benefits Scheme, established under the Military Superannuation and Benefits Act 1991, are included in trust deeds made under those acts, most of the proposed changes to those schemes will be made through amending trust deeds.

The bill proposes that the new superannuation arrangements will apply to superannuation agreements or Family Court orders received after the commencement of the relevant amendments to the legislation, as well as those agreements or Family Court orders received before that time but after 28 December 2002 where no benefit has become payable to the member. In all other cases the default arrangements under the family law regime will apply.

The bill also proposes to amend the Superannuation Act 1976 and the Superannuation Act 1990 to include a regulation making power to amend those acts from time to time in order to ensure that the schemes continue to comply with the family law regime.

Financial Impact

The proposed amendments in relation to the Commonwealth civilian superannuation schemes will result in a minor bringing forward of benefit payments in those schemes. The estimated impact on the underlying cash balance is outlined in the explanatory memorandum, a signed copy of which I present.

Debate (on motion by Mr Zahra) adjourned.