Key amendments and issues
The key provisions of the Bill:
insert proposed new sections 17AA to 17AJ into the Judges' Act (item
39 of Part 1 of Schedule 1 of the Bill);
insert proposed new sections 4AB to 4AI into the Governor-General
(item 26 of Schedule 2 of the Bill); and
- create a separate interest for the former spouse of a judge as from
commencement of the Bill, where judges' pensions are already being paid (item
47 of Part 2 of Schedule 1 of the Bill).
Separate superannuation interests for former spouses
As stated in the Explanatory Memorandum, the Bill will create scheme
specific, separate superannuation interests for the former spouses of judges
and Governors-General, consistent with the family law policy of a clean break
for separating couples.
Therefore, the amendments proposed in the Bill to the Judges' Act and the
Governor-General Act are almost identical, and only the key amendments proposed
with respect to judges' pensions will be discussed in this chapter.
In general, the key amendments create a separate interest benefit and establish
payment rules for a former spouse; provide for the consequential reduction of a
judge or Governor-General's benefit; and set out the methodology and supporting
actuarial factors for calculating benefits under a family law split.
Separate interest benefit and
Proposed new section 17AA of the Judges' Act provides for the former
spouse of a judge to be entitled to either an 'associate immediate pension' or
an 'associate deferred pension'. If a judge already receives a pension, the
former spouse is entitled to the immediate pension, otherwise the former spouse
is entitled to the deferred pension, both as from the time of the family law
Proposed new section 17AB provides for the calculation of, and payment
rules for, an 'associate deferred pension'.
The deferred pension will be calculated in accordance with 'Pension Orders'
made pursuant to proposed new section 17AI, and will become payable when the
former spouse reaches age 65 (retirement age); when the former spouse reaches
60 years of age and requests payment from the Secretary of the Department; or
after the former spouse becomes permanently incapacitated, whichever is the
If the former spouse dies before the 'associate deferred pension' becomes
payable, a lump sum benefit will be paid to his or her legal personal
representative or, if none can be found, any individual(s) determined by the
Secretary of the Department. The Bill provides a standing appropriation from
the Consolidated Revenue Fund in this regard.
Proposed new section 17AC sets out prerequisites for payment of the 'associate
deferred pension': the former spouse must apply to the Secretary of the
Department for payment of the pension and supply all necessary information in
support of the claim.
The Explanatory Memorandum states that the proposed payment rules are
broadly consistent with the payment rules for most other superannuation
benefits, and the standing appropriation is similar to the arrangements in the
Judges' Act for the payment of other lump sum benefits.
Consequential reduction of a judge's
Proposed new section 17AD provides for the reduction of a judge's
pension, if the judge is not receiving a pension at the time of the family law
The method of reduction is explained in the Explanatory Memorandum:
The reduced pension is calculated by firstly working out the
annual rate of the pension that is payable under section 6A, 6B or 6C of the
Judges' Act and then reducing that rate by the amount worked out using the
formula set out in [proposed new] subsection (5).
Proposed new section 17AE modifies the formula proposed in new
subsection 17AD(5) when the superannuation benefit has been split more
than once before it becomes payable (for example, where the Secretary of the
Department receives a second splitting agreement or splitting order arising
from another family law property settlement). The Explanatory Memorandum states:
New subsection 17AE(2) allows the formula used in subsection
17AD(5) to be used on more than one occasion by replacing the reduction factor
with an interim factor, or a series of interim factors, which represent the
reductions applied in relation to reductions before the most recent family law
Proposed new section 17AF provides for the reduction of the lump sum
benefit payable under section 12A of the Judges' Act,
if a judge has not received that benefit at the time of the family law split.
This could occur, for example, if a judge does not serve for the minimum period
(ten years) to qualify for a pension under the Judges' Act.
Proposed new section 17AG provides for the reduction of an 'associate deferred
pension', where the former spouse of a judge has a family law split with a subsequent
spouse. The deferred pension will be reduced in accordance with the 'Pension
If a judge already receives a standard pension, proposed new subsection 17AH(1)
provides for the reduction of that pension at the time of a family law split. The
method of reduction is set out in the Bill and relies on an amount specified in
the 'Pension Orders'.
'Immediate transitional pension' in
the Judges' Act
Item 39 of Part 1 of Schedule 1 of the Bill and item 26 of Schedule 2 of
the Bill (the proposed provisions outlined above) primarily deal with cases in
which a judge is not yet in receipt of a pension.
Item 47 of Part 2 of Schedule 1 of the Bill – one of the transitional
provisions – deals with those cases in which a judge is receiving a pension and
a splitting agreement or splitting order was made prior to commencement of the
The amendment creates a separate interest for the former spouse of a judge
from the time the Bill comes into operation, where pensions are being paid. The
former spouse will be entitled to an 'immediate transitional pension', payable
from the commencement of the Bill at the rate calculated in item 48 of Part 2
of Schedule 1. That item provides for the Minister to make orders for the
purposes of the transitional provisions in the Bill.
Sub-item 47(4) provides for 'immediate transitional pensions' to be paid
out of the Consolidated Revenue Fund, which is to be appropriated accordingly.
The Explanatory Memorandum states that the standing appropriation is
consistent with the payment of other pensions under the Judges' Act.
The committee notes that the reforms proposed in the Bill align the family
law arrangements for judges and Governors-General's superannuation interests
with the family law policy of a 'clean break' for separating couples, as well
as bringing consistency to Commonwealth defined benefit superannuation schemes.
The committee supports these reforms.
The committee recommends that the Senate pass the Bill.
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