Revised Explanatory Memorandum
(Circulated by authority of the Attorney-General, the Honourable Christian Porter MP)Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Family Law Amendment (Western Australia De facto Superannuation Splitting and Bankruptcy) Bill 2019
1. This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
2. This Bill will amend the Family Law Act 1975 (Cth) (FLA) to give effect to a referral of power from Western Australia to the Commonwealth in respect of superannuation matters in family law proceedings for separating de facto couples in Western Australia.
3. The Bill will also extend federal bankruptcy jurisdiction to the Family Court of Western Australia to hear bankruptcy proceedings concurrently with family law proceedings, where appropriate.
4. Consistent with Western Australia's referral, as set out in Commonwealth Powers (De facto Relationships) Act 2006 (WA), the amendments in this Bill will create a new Part VIIIC in the FLA, vesting power in the Family Court of Western Australia and the Magistrates Court of Western Australia to make superannuation splitting orders for de facto couples in that State. The Bill will also enable separating de facto couples to make agreements about how their superannuation should be split following separation.
5. This will ensure that separating de facto couples in Western Australia are able to achieve a fair split of their superannuation assets in property settlements, and will be treated consistently with de facto couples across Australia. The measures in this Bill will ensure greater access to justice for separating de facto couples in Western Australia. All other aspects of property splitting for separated Western Australian de facto couples will continue to be dealt with under Western Australian law (that is, the federal FLA regime will not apply).
6. The measures in the Bill will address the increasing inequity faced by de facto couples in Western Australian, as compared with de facto couples in other Australian states and territories, as a result of their inability to split their superannuation. This inequity is particularly felt by couples with low-value property pools, where superannuation may be the only significant asset to divide following separation. The inability for Western Australian de facto couples to split their superannuation also disproportionately affects women who, on average, accumulate less superannuation, which can be due to time taken out of the paid workforce to raise children, and due to the higher rates of women occupying part-time or lower paid roles.
7. The superannuation splitting arrangements in new Part VIIIC will apply to all Western Australian de facto couples who have not yet received final property orders.
8. The measures in the Bill will also confer jurisdiction in bankruptcy on the Family Court of Western Australia (FCWA) to enable the FCWA to hear family law and bankruptcy matters involving de facto couples concurrently. Under the Bankruptcy Act, the FCWA currently only has jurisdiction to hear family law and bankruptcy matters together for married couples. This results in Western Australian de facto couples pursuing proceedings in different courts: family law proceedings in the FCWA, and bankruptcy proceedings in the Federal Court of Australia or Federal Circuit Court.
9. The measures in the Bill will align proceedings for Western Australian de facto couples with proceedings across Australia for parties to a de facto relationship and parties to a marriage. This will ensure greater access to justice for separating de facto couples in Western Australia, who will no longer need to go to the effort and expense of being involved in proceedings in two different courts.
10. By enabling bankruptcy and family law proceedings to be brought together in the FCWA, the Bill will ensure property issues are dealt with simultaneously and will provide greater certainty to bankruptcy trustees, creditors and non-bankrupt partners.
Human rights implications
11. The Bill engages the following human rights:
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- The rights of equality and non-discrimination: Articles 2, 16 and 26 of the International Covenant on Civil and Political Rights (ICCPR)
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- The obligation to ensure the same rights for both spouses in respect of the ownership, acquisition, management, administration, enjoyment and disposition of property: Article 16 of the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW)
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- The right to freedom from interference with the family and protection of the family: Articles 17 and 23 of the International Covenant on Civil and Political Rights (ICCPR) and article 10 (especially paragraph 1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR)
Right to equality and non-discrimination
12. Article 26 of the ICCPR states that '[a]ll persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as...national or social origin, property...or other status'.
13. The measures in this Bill seek to redress a gap in the law, which means that de facto couples in Western Australia are unable to split their superannuation interests following separation.
14. Currently, by virtue of their marital status and geographical location, de facto couples in Western Australia constitute the only class of couple relationship in Australia who are not able to split their superannuation interests following the end of their relationship. This differential treatment under the law is having increasingly unfair consequences for de facto couples in Western Australia, as the value of superannuation assets in the community continues to grow.
15. Schedule 1 of the Bill will address this inequity by extending to Western Australia de facto couples the ability to split their superannuation, either by agreement or by court order. The passage of the amendments in this Bill will mean all married and de facto couples in Australia are treated equally under the law in respect of their ability to divide their property, including their superannuation, following separation.
16. The Bill automatically applies the superannuation splitting arrangements in new Part VIIIC to all Western Australian de facto couples who have not yet received final property orders.
17. The Bill will also enable Western Australian de facto couples to participate in private arbitration in relation to their superannuation proceedings, in the same circumstances as married and de facto couples in the other states and territories.
18. The measures in this Bill that amend the Bankruptcy Act will align proceedings for Western Australian de facto couples with proceedings across Australia for parties to a de facto relationship and parties to a marriage.
19. Currently, under the Bankruptcy Act, the FCWA only has jurisdiction to hear bankruptcy and family law matters together for married couples. In contrast, the Family Court of Australia is able to exercise jurisdiction in bankruptcy in all other Australian jurisdictions with respect to both married and de facto couples.
20. The ability to have bankruptcy and family law matters heard together will bring de facto couples in line with married couples in Western Australia, and with married and de facto couples in the other states and territories.
21. The Bill therefore promotes equal protection before the law for separating de facto couples in Western Australia.
The obligation to ensure the same rights for both spouses in respect of the ownership, acquisition, management, administration, enjoyment and disposition of property
22. Article 16 of CEDAW states that 'States Parties shall take all appropriate measures to eliminate discrimination against women in all matters relating to marriage and family relations and in particular shall ensure, on a basis of equality of men and women...(h) the same rights for both spouses in respect of the ownership, acquisition, management, administration, enjoyment and disposition of property, whether free of charge or for a valuable consideration.'
23. While the current inability of Western Australia de facto couples to split their superannuation applies equally to men and women, the consequences of this inability for couples to transfer ownership of their superannuation following a relationship breakdown may disproportionately affect women. This is due to the lower amounts of superannuation women accumulate by retirement, on average.
24. Women's obstacles to accumulating as much superannuation as their male partner may arise from, for example, taking time out of the paid workforce to give birth to, and care for children. Differential levels of superannuation between men and women are also explained by higher incidence of women occupying casual, part-time or lower paid roles over their career. According to the Australian Bureau of Statistics, in 2017-18, the median superannuation balance for women aged 55-64 was $119,000 compared to $183,000 for men of the same age. The measures in Schedule 1 of the Bill will ensure that, if a couple agrees, or if a court determines that it is fair and equitable, the superannuation interests of both parties may be redistributed between them, having regard to the parties' respective contributions (including non-financial and homemaker contributions), and their future needs (including consideration of their future earning capacity).
25. The Bill therefore promotes the equality of the spouses with respect to ownership of property following the end of the relationship.
Right to respect for the family
26. Article 17(1) of the ICCPR states that 'no one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation'. Article 23(1) states that 'the family is the natural and fundamental group unit of society and is entitled to protection by society and the State'. Article 10(1) of the ICESCR provides that the 'widest possible protection and assistance should be accorded to the family, which is the natural and fundamental group unit of society, particularly for its establishment and while it is responsible for the care and education of dependent children.'
27. The Bill promotes the protection from interference with the family by ensuring a proper and effective system for superannuation splitting agreements to empower families to take responsibility for their own affairs without interference of a court. The jurisdiction of the family law courts to make an order for superannuation splitting following a breakdown of a de facto relationship in Western Australia otherwise conferred by this Bill, will be ousted by the binding superannuation agreement provisions.
28. However, the autonomy afforded to parties would be subject to appropriate safeguards, consistent with the existing protections in Division 3 of the Family Court Act 1997 (WA). An agreement would only be binding if each party has received independent legal advice prior to entering into the arrangement. The court would have the power to set aside a financial agreement in certain circumstances, for example if there has been a material change of circumstances or circumstances that mean it would not be just and equitable to enforce the agreement. This provides the appropriate balance between respect for privacy and for the family unit, and the provision of appropriate safeguards and protections for vulnerable parties.
29. The amendments would make clear that, where parties have been provided with legal advice as to the relevant matters, and entered into the agreement in good faith, the agreement will generally be binding and enforceable. This is intended to provide finality to parties in respect of the resolution of their superannuation matters and to support families to make decisions about what is best for their family without undue interference from the judiciary.
30. The Bill therefore promotes the right to freedom from interference with the family and protection of the family.
Conclusion
31. The Bill is compatible with human rights because it promotes the protection of some human rights, and does not limit any human rights.