House of Representatives

Explanatory Memorandum

(Circulated by authority of the Attorney-General,the Honourable Daryl Williams AM QC MP)

NOTES ON CLAUSES

Clause 1 - Short title

1. Clause 1 of the Superannuation Bill will provide that the Act may be cited as the Family Law Legislation Amendment (Superannuation) Act 2000 .

Clause 2 - Commencement

2. Clause 2 of the Superannuation Bill will provide for the commencement of the Act. Subclause 2(1) will provide that generally the Act will commence on the day it receives the Royal Assent.

3. Subclause 2(2) of the Superannuation Bill will provide that Schedule 1 to the Superannuation Bill will commence on the first anniversary of the day on which the Act receives the Royal Assent. Schedule 1 to the Superannuation Bill provides for the amendments to the Family Law Act dealing with the division of superannuation on marriage breakdown, and also provides for amendments to other legislation.

4. The reason for the delay in commencement of Schedule 1 is to allow the superannuation industry and relevant government agencies to make the necessary adjustments to their information technology and administrative systems to implement the division of a superannuation interest on marriage breakdown. It will also allow for a range of educational activities to be undertaken in relation to the Bill.

Clause 3 - Schedule(s)

5. Clause 3 of the Superannuation Bill will provide that each Act that is specified in a Schedule will be amended or repealed as set out in the applicable items in the Schedule. Clause 3 of the Superannuation Bill will also provide that any other item in a Schedule has effect according to its terms.

Clause 4 - Definitions

6. Clause 4 of the Superannuation Bill will provide for definitions, relevantly:

startup time will be the time when the Act commences; and

superannuation amendments will be the amendments made by Schedule 1 to the Act.

Clause 5 - Application of superannuation amendments

7. Clause 5 of the Superannuation Bill will provide for the application of the superannuation amendments, as provided for in Schedule 1. The policy intention is that the superannuation amendments will not apply if a property settlement, either by a court approved agreement, under section 87 of the Family Law Act, or a court order, under section 79 of the Family Law Act, has been finally concluded prior to the commencement of the superannuation amendments. Similarly, if the court order or the court approval for the agreement is subsequently set aside after the commencement of the superannuation amendments, the superannuation amendments will not apply because the parties will have had their property dealt with under section 79 or section 87 of the Family Law Act.

8. Subclause 5(1) of the Superannuation Bill will provide that, subject to clause 5, the superannuation amendments will apply to all marriages, including those that were dissolved before the startup time. This will make it clear that the amendments will apply regardless of when the marriage may have taken place. There will be, of course, exceptions to this general rule, which are set out in the following paragraph.

9. Subclause 5(2) of the Superannuation Bill will provide for the exceptions to the general provision in subclause 5(1). Accordingly, subclause 5(2) will provide that the superannuation amendments will not apply to a marriage if:

(i)

a maintenance agreement, under section 87 of the Family Law Act, was approved before the startup time (paragraph 5(2)(a)); or

(ii)

an order for the settlement of property, under section 79 of the Family Law Act, was made before the startup time (paragraph 5(2)(b)) that is not expressed to be an interim order.

10. Schedule 2 to the Family Law Amendment Bill, which is currently before the Parliament, will insert Part VIIIA into the Family Law Act. Part VIIIA will provide that parties to a marriage may make a financial agreement about how their property is to be divided on marriage breakdown. Under Part VIIIA it will not be possible to make an agreement about the division of a superannuation interest. However, parties to a financial agreement under Part VIIIA will have taken any superannuation interests into account in making the agreement. Therefore, parties who have made a financial agreement under Part VIIIA will not be able to subsequently make a superannuation agreement. This will be achieved by subclause 5(3) of the Superannuation Bill

11. Subclause 5(3) of the Superannuation Bill will provide that new Part VIIIB of the Family Law Act, which will provide for the division of superannuation on marriage breakdown and will be inserted into the Family Law Act by the Superannuation Bill, will not apply in relation to a financial agreement that was made before the startup time.