(1) This section applies to a superannuation interest (the original interest) if:

(a) the Authority receives a splitting agreement or splitting order in respect of the original interest; and

(b) the original interest is not an entitlement to pension under section 42 or 43; and

(c) the member spouse and the non-member spouse are both alive at the operative time; and

(d) if a base amount applies—the base amount at the operative time is not more than the family law value or the scheme value.

If, at the operative time, standard pension is payable in respect of the original interest, then the non-member spouse is entitled to associate pension from the operative time, at the rate calculated under the Orders by reference to the transfer amount.

49C Commutation of small associate pension

If the annual rate of associate pension to which the non-member spouse becomes entitled is less than the amount determined under the Orders, then the non-member spouse may elect to commute the pension.

The election must be made in writing to the Chairman not later than 3 months after the non-member spouse becomes entitled to the pension.

If the non-member spouse makes the election, then the non-member spouse is entitled instead to a lump sum equal to the transfer amount.

If:

(a) at the operative time, standard pension is not payable in respect of the original interest; and

(b) after the operative time, standard pension becomes payable to the member spouse in respect of the original interest;

then the annual rate of that standard pension is reduced to the amount calculated under the Orders.

A reduction under subsection (1) is to be disregarded in calculating the amount of any non-standard pension that later becomes payable.

If:

(a) at the operative time, standard pension is not payable in respect of the original interest; and

(b) after the operative time, a lump sum amount becomes payable, in respect of the original interest, under section 32, 48, 48A, 56, 57 or 77;

then that lump sum amount is reduced to the amount calculated under the Orders.

49E Operative time during payment phase—reduction of standard pension

If, at the operative time, standard pension is payable to the member spouse in respect of the original interest, then the annual rate of that pension is reduced to the amount calculated under the Orders.

A reduction under this section is to be disregarded in calculating the amount of any non-standard pension that later becomes payable.

The Minister may make Orders prescribing matters required or permitted by this Part to be prescribed.

(2) An Order is a disallowable instrument for the purposes of Acts Interpretation Act 1901.section 46A of the

(3) An Order is taken to be a statutory rule for the purposes of the Statutory Rules Publication Act 1903.

Defence Forces Retirement Benefits Act 1948

4 Before subsection 57(1)

Insert:

(1AA) A male person is not to be treated as a male pensioner for the purposes of this section merely because the person, at the time of his death, was receiving associate pension under Part VIA.

5 At the end of section 58

Add:

A person is not to be treated as a pensioner for the purposes of this section merely because the person, at the time of his or her death, was receiving associate pension under Part VIA.

6 After Part V

Insert:

(1) This section applies to a superannuation interest under this Act (the original interest) if:

(a) the Chairman receives a splitting agreement or splitting order in respect of the original interest; and

(b) the original interest is not an entitlement to pension under paragraph 57(1)(b), subsection 57(4) or (5) or section 58; and

(c) the member spouse and the non-member spouse are both alive at the operative time; and

(d) if a base amount applies—the base amount at the operative time is not more than the family law value or the scheme value.

The non-member spouse is entitled to associate pension from the operative time, at the rate calculated under the Orders by reference to the transfer amount.

80C Commutation of small associate pension

If the annual rate of associate pension to which the non-member spouse becomes entitled is less than the amount determined under the Orders, then the non-member spouse may elect to commute the pension.

The election must be made in writing to the Chairman not later than 3 months after the non-member spouse becomes entitled to the pension.

If the non-member spouse makes the election, then the non-member spouse is entitled instead to a lump sum equal to the transfer amount.

The annual rate of standard pension that is payable at the operative time in respect of the original interest is reduced to the amount calculated under the Orders.

A reduction under this section is to be disregarded in calculating the amount of any non-standard pension that later becomes payable.

The Minister may make Orders prescribing matters required or permitted by this Part to be prescribed.

(2) An Order is a disallowable instrument for the purposes of Acts Interpretation Act 1901.section 46A of the

(3) An Order is taken to be a statutory rule for the purposes of the Statutory Rules Publication Act 1903.

7 Subsection 83(1) (at the end of the definition of pension)

Add “, but does not include associate pension under Part VIA of this Act”.

Military Superannuation and Benefits Act 1991

8 Subsection 3(1)

Insert:

associate benefit means a benefit that is payable under provisions of the Trust Deed that are authorised by section 5A.

9 At the end of Part 2

Add:

5A Amendments of Trust Deed to implement family law interest splitting

Without limiting subsection 5(1), amendments under that subsection:

(a) may provide that, when a splitting agreement or splitting order is received by the Board in respect of a superannuation interest under this Act:

(i) the non-member spouse is entitled to benefits determined in accordance with the Rules; and

(ii) the benefits of the member spouse are reduced in accordance with the Rules; and

(b) may provide that, when a splitting agreement or splitting order is received by the Board in respect of a superannuation interest under:

(i) Defence Act 1903; orsection 52 of the

(ii) the Defence Force Retirement and Death Benefits Act 1973;

the non-member spouse is entitled to benefits determined in accordance with the Rules; and

(c) may make any other provision that is related to, or consequential on, provisions referred to in paragraph (a) or (b).

(2) Subparagraph (1)(b)(ii) does not apply in a case covered by subsection 49B(2) of the Defence Force Retirement and Death Benefits Act 1973.

(3) Subsection 48(2) of the Acts Interpretation Act 1901 does not apply to amendments referred to in subsection (1) of this section.

In this section:

member spouse has the same meaning as in Part VIIIB of the Family Law Act 1975.

non-member spouse has the same meaning as in Part VIIIB of the Family Law Act 1975.

splitting agreement means:

(a) a superannuation agreement (within the meaning of Family Law Act 1975); orPart VIIIB of the

(b) a flag lifting agreement (within the meaning of Family Law Act 1975) that provides for a payment split (within the meaning of Part VIIIB of the Family Law Act 1975).Part VIIIB of the

splitting order has the same meaning as in Part VIIIB of the Family Law Act 1975.

superannuation interest has the same meaning as in Part VIIIB of the Family Law Act 1975.

10 After section 16

Insert:

16A Payments relating to associate benefits

Where an associate benefit becomes payable under the Rules, the Commonwealth must pay the benefit to such person or persons as are appropriate under the Rules.

The Board must pay to the Commonwealth any amount that the Board is required under the Rules to pay to the Commonwealth in respect of an associate benefit.

11 After subsection 46(1)

Insert:

(1A) A person who is, or has ceased to be, an associate is subject to the Rules to the extent that they are applicable in relation to the person. For this purpose, associate means a person to whom an associate benefit is payable.

Parliamentary Contributory Superannuation Act 1948

11A Subsection 4(1) (at the end of the definition of annuity)

Add “, including an associate annuity under section 22CD or 22CE”.

11B At the end of section 4E

Add:

Reductions under Division 3 of Part VAA are to be disregarded in applying subsection (3).

11C After subsection 18(8A)

Insert:

(8AAA) Any reduction under basic rate in subsection (8A) of this section.section 22CH is to be disregarded in applying the definition of

11D After subsection 18(8AC)

Insert:

(8ACA) Any reduction under basic rate in subsection (8AC) of this section.section 22CH is to be disregarded in applying the definition of

11E After subsection 18B(15)

Insert:

(15A) Any reduction under basic rate in subsection (15) of this section.section 22CH is to be disregarded in applying the definition of

11F After Part V

Insert:

(1) In calculating the annual rate of the affected benefit in accordance with basic service factor at the payment time and the basic service factor at the operative time are worked out under this section.section 22CH, the

Period of service at least 8 years

If the period of service is at least 8 years, then:

(a) the basic service factor at the payment time is the number calculated, by reference to the member spouse’s period of service before the payment time, by adding:

(i) for service that occurred within the first 8 years—0.0625 for each full year; and

(ii) for service that occurred within the next 10 years:

(A) 0.025 for each full year; and

(B) 0.025/365 for each left-over day; and

(b) the basic service factor at the operative time is the number calculated, by reference to the member spouse’s period of service before the operative time, by adding:

(i) for service that occurred within the first 8 years:

(A) 0.0625 for each full year; and

(B) 0.0625/365 for each left-over day; and

(ii) for service that occurred within the next 10 years:

(A) 0.025 for each full year; and

(B) 0.025/365 for each left-over day.

Period of service less than 8 years—retiring allowance (not under subsection 18(2AA))

If the period of service is less than 8 years and the affected benefit is a retiring allowance (other than an allowance under subsection 18(2AA)), then:

(a) the basic service factor at the payment time is 0.5; and

(b) the basic service factor at the operative time is the number calculated using the formula:

Period of service less than 8 years—retiring allowance under paragraph 18(2AA)(b) or (c) or annuity under paragraph 19(1)(a)

If the period of service is less than 8 years and the affected benefit is a retiring allowance under paragraph 18(2AA)(b) or (c) or an annuity under paragraph 19(1)(a), then:

(a) the basic service factor at the payment time is 0.5; and

(b) the basic service factor at the operative time is the number calculated, by reference to the member spouse’s period of service before the operative time, by adding:

(i) 0.0625 for each full year; and

(ii) 0.0625/365 for each left-over day.

Period of service less than 8 years—retiring allowance under paragraph 18(2AA)(d)

If the period of service is less than 8 years and the affected benefit is a retiring allowance under paragraph 18(2AA)(d), then:

(a) the basic service factor at the payment time is 0.3; and

(b) the basic service factor at the operative time is the number calculated, by reference to the member spouse’s period of service before the operative time, by adding:

(i) 0.0375 for each full year; and

(ii) 0.0375/365 for each left-over day.

22CC Additional service factor

(1) In calculating the annual rate of the affected benefit in accordance with additional service factor at the payment time and the additional service factor at the operative time are worked out under this section.section 22CH, the

Where subsection 18(10B) does not apply

If subsection 18(10B) does not apply, then:

(a) for each office, the additional service factor at the payment time is the number calculated, by reference to the member spouse’s period of service in the office before the payment time, by adding:

(i) 0.0625 for each full year; and

(ii) 0.0625/365 for each left-over day; and

(b) for each office, the additional service factor at the operative time is the number calculated, by reference to the member spouse’s period of service in the office before the operative time, by adding:

(i) 0.0625 for each full year; and

(ii) 0.0625/365 for each left-over day.

Where paragraph 18(10B)(a) applies (one office)

If paragraph 18(10B)(a) applies, then:

(a) the additional service factor at the payment time is 0.75; and

(b) the additional service factor at the operative time is:

(i) if the period of service in the office is at least 12 years—0.75; or

(ii) otherwise—the number calculated, by reference to the member spouse’s period of service in the office before the operative time, by adding:

(A) 0.0625 for each full year; and

(B) 0.0625/365 for each left-over day.

Where paragraph 18(10B)(b) applies (highest-paid office)

If paragraph 18(10B)(b) applies, then:

(a) the additional service factor at the payment time is 0.75; and

(b) if, at the operative time, the member spouse is not entitled to parliamentary allowance, then the additional service factor at the operative time for the highest-paid office to which paragraph 18(10B)(b) applies is 0.75; and

(c) if, at the operative time, the member spouse is entitled to parliamentary allowance, then the additional service factor at the operative time for the highest-paid office to which paragraph 18(10B)(b) applies is worked out as follows:

(i) calculate a factor under paragraph (2)(b) of this section for each office referred to in paragraph 18(10B)(b), other than an office for which the period of service began after the operative time;

(ii) for each such factor, calculate a weighted factor under subsection (6) of this section;

(iii) add together the weighted factors calculated under subparagraph (ii) of this paragraph.

If the additional service factor at the operative time, worked out under paragraph (4)(c), would be more than 0.75, then it is taken to be 0.75.

The weighted factor is calculated using the formula:

where:

salary for highest office means the number of whole dollars in the salary applicable at the payment time to the office referred to in paragraph 18(10B)(b) that had the highest rate of salary, or allowance by way of salary, at the payment time.

salary for the office means the number of whole dollars in the salary, or allowance by way of salary, applicable to the office at the payment time.

(1) This section applies to a superannuation interest under this Act (the original interest) if:

(a) the Secretary receives a splitting agreement or splitting order in respect of the original interest; and

(b) the original interest is not an entitlement to an annuity under section 19AA; and

(c) the member spouse and the non-member spouse are both alive at the operative time; and

(d) if a base amount applies—the base amount at the operative time is not more than the family law value or the scheme value.

Immediate annuity if operative time in payment phase

If, at the operative time, standard allowance or annuity is payable in respect of the original interest, then the non-member spouse is entitled to an associate immediate annuity from the operative time, at the rate calculated under the Orders by reference to the transfer amount.

Deferred annuity if operative time in growth phase

If, at the operative time, standard allowance or annuity is not payable in respect of the original interest, then the non-member spouse is entitled to an associate deferred annuity in accordance with section 22CE.

22CE Associate deferred annuity

The associate deferred annuity is payable at an annual rate calculated under the Orders by reference to the transfer amount.

The annuity is payable from the later of:

(a) the operative time; and

(b) the earliest of the following dates:

(i) if the Trust is satisfied that the non-member spouse has become permanently incapacitated—the date that the Trust considers to have been the date on which the person became permanently incapacitated;

(ii) a date notified to the Secretary under subsection (3);

(iii) the 65th anniversary of the non-member spouse’s birth.

The non-member spouse may give a written notice to the Secretary specifying a date that is not earlier than the 55th anniversary of the non-member spouse’s birth. However, the notice has no effect if section 26B would prevent the annuity being paid to the non-member spouse from the specified date.

The annuity is not payable unless:

(a) a written application has been made requesting payment of the benefit; and

(b) the applicant has provided any information that is necessary to determine whether the benefit is payable.

An application for payment on the ground of incapacity must be accompanied by the following:

(a) a certificate given by a medical practitioner nominated by the Trust;

(b) a certificate given by a medical practitioner nominated by, or on behalf of, the non-member spouse;

(c) such additional information or documents as the Trust requires.

The certificates mentioned in paragraphs (5)(a) and (b) must include a statement to the effect that, in the opinion of the medical practitioner concerned, the non-member spouse is permanently incapacitated, as defined in this section.

If the non-member spouse dies before the annuity becomes payable, an amount calculated under the Orders must be paid to the legal personal representative or, if no legal personal representative can be found, to any individual or individuals that the Trust determines.

(8) For the purposes of this section, a person is permanently incapacitated if, and only if, the person suffers from permanent incapacity within the meaning of the Superannuation Industry (Supervision) Regulations 1994.

22CF Commutation of small associate annuity

If:

(a) the annual rate of associate immediate annuity that becomes payable to the non-member spouse is less than the amount determined under the Orders; or

(b) the annual rate of associate deferred annuity that becomes payable to the non-member spouse is less than the amount determined under the Orders;

then the non-member spouse may elect to commute the annuity.

The election must be made in writing to the Secretary not later than 3 months after the annuity becomes payable.

If the non-member spouse makes the election, then the non-member spouse is entitled instead to:

(a) if paragraph (1)(a) applies—a lump sum equal to the transfer amount; or

(b) if paragraph (1)(b) applies—a lump sum calculated under the Orders.

This section applies if:

(a) at the operative time, standard allowance or annuity is not payable in respect of the original interest; and

(b) the original interest is not an entitlement to an associate annuity.

The contributions in respect of the original interest are reduced, with effect from the operative time, by the amount calculated using the formula:

where:

contributions at OT means the amount of the contributions, ascertained at the operative time.

Any section 16A amount in respect of the original interest is reduced, with effect from the operative time, by the amount calculated using the formula:

where:

section 16A amount at OT means the section 16A amount, ascertained at the operative time.

Any section 22Q amount in respect of the original interest is reduced, with effect from the operative time, by the amount calculated using the formula:

where:

section 22Q amount at OT means the section 22Q amount, ascertained at the operative time.

22CH Operative time during growth phase—reduction of retiring allowance

This section applies if:

(a) at the operative time, standard allowance or annuity is not payable in respect of the original interest; and

(b) after the operative time, a retiring allowance (the affected benefit) becomes payable to the member spouse in respect of the original interest.

Reduction of basic percentage

In calculating the annual rate of the affected benefit, the applicable basic percentage is replaced by the percentage calculated using the formula:

where:

BSF at OT means the basic service factor at the operative time.

BSF at PT means the basic service factor at the payment time.

Reduction of additional percentage

In calculating the annual rate of the affected benefit, each applicable additional percentage is replaced by the percentage calculated using the formula:

where:

ASF at OT means the additional service factor at the operative time for the office concerned.

ASF at PT means the additional service factor at the payment time for the office concerned.

Subsection (3) does not apply to an applicable additional percentage for an office if:

(a) the period of service in the office began after the operative time; and

(b) paragraph 18(10B)(b) does not apply.

Multiple interest splits for same original interest

If, before the affected benefit becomes payable, the original interest has been split more than once (that is to say, section 22CD has applied more than once), then the calculations under subsections (2) and (3) are modified as set out in subsections (6) and (7).

In applying the formula in subsection (2), the component (BSF at OT Transfer factor) is to be replaced by the number calculated using the following steps, based on the chronological order of the operative times (starting with the earliest):

(a) calculate a factor (the interim factor) for the first split using the formula:

(b) calculate a factor (the interim factor) for the next split (the current split), using the formula:

(c) calculate a factor for each remaining split (if any), using the formula in paragraph (b);

(d) add together the factors calculated under paragraphs (a) to (c).

In applying the formula in subsection (3), the component (ASF at OT Transfer factor) is to be replaced by the number calculated using the following steps, based on the chronological order of the operative times (starting with the earliest):

(a) calculate a factor (the interim factor) for the first split using the formula:

(b) calculate a factor (the interim factor) for the next split (the current split), using the formula:

(c) calculate a factor for each remaining split (if any), using the formula in paragraph (b);

(d) add together the factors calculated under paragraphs (a) to (c).

Reduction not to affect later non-standard annuity

A reduction under this section is to be disregarded in calculating the amount of any non-standard annuity that later becomes payable.

22CI Operative time during growth phase—reduction where original interest is entitlement to associate deferred annuity

This section applies if:

(a) at the operative time, standard allowance or annuity is not payable in respect of the original interest; and

(b) the original interest is an entitlement to an associate deferred annuity.

The annual rate of that associate annuity (when it becomes payable) is reduced to the amount calculated under the Orders.

22CJ Operative time during payment phase—reduction of standard allowance or annuity

If, at the operative time, standard allowance or annuity is payable in respect of the original interest, then the annual rate of that allowance or annuity is reduced to the amount calculated under the Orders.

A reduction under subsection (1) is to be disregarded in calculating the amount of any non-standard annuity that later becomes payable.

The Minister may make Orders prescribing matters required or permitted by this Part to be prescribed.

(2) An Order is a disallowable instrument for the purposes of Acts Interpretation Act 1901.section 46A of the

(3) An Order is taken to be a statutory rule for the purposes of the Statutory Rules Publication Act 1903.

Superannuation Act 1922

12 Subsection 4(1)

Insert:

pension includes associate pension under section 93DB.

13 After subsection 47(1)

Insert:

This section does not apply to an associate pension under Part VA that a deceased pensioner was receiving at the time of his or her death.

14 At the end of section 61

Add:

This section does not apply to a pension that has been reduced under section 93DD.

15 After Part V

Insert:

(1) This section applies to a superannuation interest under this Act (the original interest) if:

(a) the Commissioner receives a splitting agreement or splitting order in respect of the original interest; and

(b) the original interest is not:

(i) an entitlement to a pension under subsection 47(4) or section 48; or

(ii) an entitlement to deferred benefits under section 119T; and

(c) the member spouse and the non-member spouse are both alive at the operative time; and

(d) if a base amount applies—the base amount at the operative time is not more than the family law value.

The non-member spouse is entitled to an associate pension from the operative time, at the rate calculated under the Orders by reference to the transfer amount.

93DC Commutation of small associate pension

If the annual rate of associate pension to which the non-member spouse becomes entitled is less than the amount determined under the Orders, then the non-member spouse may elect to commute the pension.

The election must be made in writing to the Commissioner not later than 3 months after the non-member spouse becomes entitled to the pension.

If the non-member spouse makes the election, then the non-member spouse is entitled instead to a lump sum equal to the transfer amount.

The annual rate of the standard pension that is payable at the operative time in respect of the original interest is reduced to the amount calculated under the Orders.

The reduction under subsection (1) is to be disregarded in calculating the amount of any non-standard pension that later becomes payable.

The Minister may make Orders prescribing matters required or permitted by this Part to be prescribed.

(2) An Order is a disallowable instrument for the purposes of Acts Interpretation Act 1901.section 46A of the

(3) An Order is taken to be a statutory rule for the purposes of the Statutory Rules Publication Act 1903.

Superannuation Act 1976

16 Subsection 3(1)

Insert:

associate member means a person who is entitled to a benefit under section 146MB or 146MC.

17 Subparagraph 27C(1)(a)(ii)

After “eligible employees”, insert “and associate members”.

18 Paragraph 27C(2)(d)

After “eligible employees”, insert “and associate members”.

19 Paragraph 54JA(1)(c)

After “section 138”, insert “or 146MC”.

20 At the end of section 80A

Add:

Reductions under Division 3 of Part IXB are to be disregarded in applying subsection (3) of this section.

21 After subsection 110SE(3)

Insert:

Reductions under Division 3 of Part IXB are to be disregarded in applying subsection (3) of this section.

22 After Part IXA

Insert:

(1) This section applies to a superannuation interest under this Act (the original interest) if:

(a) the Board receives a splitting agreement or splitting order in respect of the original interest; and

(b) the original interest is not an entitlement to an orphan pension; and

(c) the member spouse and the non-member spouse are both alive at the operative time; and

(d) if a base amount applies—the base amount at the operative time is not more than the family law value or the scheme value.

Pension if operative time in payment phase

If, at the operative time, standard pension is payable in respect of the original interest, then the non-member spouse is entitled to associate standard pension from the operative time, at the rate calculated under the Orders by reference to the transfer amount.

If, at the operative time, additional pension is payable in respect of the original interest, then the non-member spouse is entitled to associate additional pension from the operative time, at the rate calculated under the Orders by reference to the transfer amount.

Deferred benefits if operative time in growth phase

If, at the operative time, standard pension is not payable in respect of the original interest, then the non-member spouse is entitled to associate deferred benefits in accordance with section 146MC.

146MC Associate deferred benefits

Associate deferred benefits consist of:

(a) a lump sum equal to the funded component of the transfer amount, together with interest determined under section 154A; and

(b) an associate deferred pension at an annual rate calculated under the Orders by reference to the unfunded component.

The benefits become payable at the later of:

(a) the operative time; and

(b) the earliest of the following dates:

(i) if the Board is satisfied that the non-member spouse has, because of invalidity or physical or mental incapacity, become totally and permanently incapacitated within the meaning of Part IVA—the date that the Board considers to have been the date on which the person became so incapacitated;

(ii) a date notified to the Board under subsection (3);

(iii) the 65th anniversary of the non-member spouse’s birth.

The non-member spouse may give a written notice to the Board specifying a date that is not earlier than the 55th anniversary of the non-member spouse’s birth. However, the notice has no effect if, under the SIS Act, the associate deferred pension is not permitted to be paid in cash to the non-member spouse from the specified date.

The benefits are not payable unless:

(a) a written application has been made to the Board requesting payment of the benefits; and

(b) the applicant has given the Board any information that is necessary to enable the Board to determine whether the benefits are payable.

If the non-member spouse dies before the benefits become payable, the Board must pay the following amounts to the legal personal representative or, if no legal personal representative can be found, to any individual or individuals that the Board determines:

(a) the amount referred to in paragraph (1)(a);

(b) an amount calculated under the Orders in respect of the associate deferred pension.

When the amount referred to in paragraph (1)(a) becomes payable, or is paid under paragraph (5)(a), an equal amount must be paid out of the Superannuation Fund to the Commonwealth.

146MD Commutation of small associate pension

If:

(a) the total annual rate of associate standard pension and associate additional pension (if any) to which the non-member spouse becomes entitled; or

(b) the annual rate of associate deferred pension to which the non-member spouse becomes entitled;

is less than the amount determined under the Orders, then the non-member spouse may elect to commute those pensions or that pension.

The election must be made in writing to the Board not later than 3 months after the non-member spouse becomes entitled to the pensions or pension.

If the non-member spouse makes the election, then the non-member spouse is entitled instead to:

(a) if paragraph (1)(a) applies—a lump sum equal to the transfer amount; or

(b) if paragraph (1)(b) applies—a lump sum calculated under the Orders.

This section applies if:

(a) at the operative time, standard pension is not payable in respect of the original interest; and

(b) the original interest is not an entitlement to associate deferred benefits.

Reduction of accumulated contributions etc.

The following amounts are reduced in respect of the original interest:

(a) the accumulated basic contributions are reduced by the sum of:

(i) the basic contributions component; and

(ii) the interest accruing on that component after the operative time;

(b) the accumulated supplementary contributions are reduced by the sum of:

(i) the supplementary contributions component; and

(ii) the interest accruing on that component after the operative time;

(c) the accumulated employer contributions are reduced by the sum of:

(i) the employer contributions component; and

(ii) the interest accruing on that component after the operative time;

(d) any benefit under section 110SN is reduced by the sum of:

(i) the section 110SL component; and

(ii) the interest accruing on that component after the operative time;

(e) any benefit under section 130D is reduced by the sum of:

(i) the section 130B component; and

(ii) the interest accruing on that component after the operative time.

Reduction of later salary-based pension

(3) If, after the operative time, salary-based pension (the original pension) becomes payable to the member spouse in respect of the original interest, then the annual rate of the original pension is reduced to the amount worked out using the formula:

Multiple interest splits for same original interest

If, before the original pension becomes payable, the original interest has been split more than once (that is to say, section 146MB has applied more than once), then, in applying the formula in subsection (3), the reduction factor is to be replaced by the number calculated using the following steps, based on the chronological order of the operative times (starting with the earliest):

(a) calculate a factor (the interim factor) using the steps in paragraphs (a) to (c) of the definition of reduction factor in subsection (6);

(b) calculate a factor (the interim factor) for the next split (the current split), using the formula:

where:

unreduced current factor means the number calculated using the steps in paragraphs (a) and (b) of the definition of reduction factor in subsection (6);

(c) calculate a factor for each remaining split (if any), using the formula in paragraph (b);

(d) add together the factors calculated under paragraphs (a) to (c).

Reduction not to affect later non-standard pension

A reduction under subsection (3) is to be disregarded in calculating the amount of any non-standard pension that later becomes payable.

In this section:

age factor means:

(a) if the age in full years is 65 or more—1; or

(b) if the age in full years is less than 65—1 reduced by 0.02 per year from 64 years to 60 years, and then by 0.03 per year from 59 years to 31 years.

final salary amount means the number of whole dollars in the member spouse’s final annual rate of salary.

original pension amount means the number of whole dollars in the original pension.

reduction factor means the number worked out as follows:

(a) calculate a number (the service factor), by reference to the member spouse’s period of contributory service before the operative time, by adding:

(i) for service that occurred within the first 20 years:

(A) 0.02 for each full year; and

(B) 0.02/365 for each left-over day; and

(ii) for service that occurred within the next 10 years:

(A) 0.01 for each full year; and

(B) 0.01/365 for each left-over day; and

(iii) for service that occurred within the next 10 years:

(A) 0.0025 for each full year; and

(B) 0.0025/365 for each left-over day;

(b) if the original pension is age retirement pension or early retirement pension, multiply the service factor by the age factor (based on the member spouse’s age in full years at the time when the original pension became payable);

(c) multiply the number worked out under paragraphs (a) and (b) by the transfer factor.

salary-based pension means a pension that is calculated by reference to the member spouse’s final annual rate of salary.

146MF Operative time during growth phase—reduction where original interest is entitlement to associate deferred benefits

This section applies if:

(a) at the operative time, standard pension is not payable in respect of the original interest; and

(b) the original interest is an entitlement to associate deferred benefits.

The deferred benefits, when they become payable, are reduced in accordance with the Orders.

146MG Operative time during payment phase—reduction of pension

If, at the operative time, standard pension is payable in respect of the original interest, then the annual rate of that pension is reduced to the amount calculated under the Orders.

If, at the operative time, additional pension is payable in respect of the original interest, then the annual rate of that pension is reduced to the amount calculated under the Orders.

A reduction under this section is to be disregarded in calculating the amount of any non-standard pension that later becomes payable.

The Minister may make Orders prescribing matters required or permitted by this Part to be prescribed.

(2) An Order is a disallowable instrument for the purposes of Acts Interpretation Act 1901.section 46A of the

(3) An Order is taken to be a statutory rule for the purposes of the Statutory Rules Publication Act 1903.

23 Subsection 147(1) (after paragraph (e) of the definition of pension to which this Part applies)

Insert:

(ea) associate additional pension under Part IXB; or

24 Subsection 155C(3) (after paragraph (ca) of the definition of eligible regulatory law)

Insert:

(cb) the Family Law Act 1975; or

25 Section 167AB

Omit “a declaration”, substitute “an Order, declaration”.

26 Section 167AB

Omit “the declaration” (wherever occurring), substitute “the Order, declaration”.

27 At the end of section 168

Add:

(20) Regulations made within one year after the commencement of this subsection for purposes arising from any amendment of this Act made by the Superannuation Legislation Amendment (Family Law and Other Matters) Act 2004 may commence on a day:

(a) earlier than the day on which they are made; but

(b) not earlier than the commencement of this subsection.

Superannuation Act 1990

28 Section 3

Insert:

associate benefit means a benefit that is payable under provisions of the Trust Deed that are authorised by subsection 5A(1).

29 After section 5

Insert:

5A Amendments of Trust Deed to implement family law interest splitting

Without limiting subsection 5(1), amendments under that subsection:

(a) may provide that, when a splitting agreement or splitting order is received by the Board in respect of a superannuation interest under this Act:

(i) the non-member spouse is entitled to benefits determined in accordance with the Rules; and

(ii) the benefits of the member spouse are reduced in accordance with the Rules; and

(b) may make any other provision that is related to, or consequential on, provisions referred to in paragraph (a).

(2) Subsection 48(2) of the Acts Interpretation Act 1901 does not apply to amendments referred to in subsection (1) of this section.

In this section:

member spouse has the same meaning as in Part VIIIB of the Family Law Act 1975.

non-member spouse has the same meaning as in Part VIIIB of the Family Law Act 1975.

splitting agreement means:

(a) a superannuation agreement (within the meaning of Family Law Act 1975); orPart VIIIB of the

(b) a flag lifting agreement (within the meaning of Family Law Act 1975) that provides for a payment split (within the meaning of Part VIIIB of the Family Law Act 1975).Part VIIIB of the

splitting order has the same meaning as in Part VIIIB of the Family Law Act 1975.

superannuation interest has the same meaning as in Part VIIIB of the Family Law Act 1975.

30 After section 16

Insert:

16A Payments relating to associate benefits

Where an associate benefit becomes payable under the Rules, the Commonwealth must pay the benefit to such person or persons as are appropriate under the Rules.

The Board must pay to the Commonwealth, out of the PSS Fund, any amount that the Board is required under the Rules to pay to the Commonwealth in respect of an associate benefit.

31 Section 18

Omit “section 16”, substitute “section 16, 16A”.

32 After paragraph 37(1)(b)

Insert:

(ba) in relation to the payment of associate benefits; or

33 After subsection 42(1)

Insert:

(1A) A person who is, or has ceased to be, an associate is subject to the Rules to the extent that they are applicable in relation to the person. For this purpose, associate means a person to whom an associate benefit is payable.

34 Subsection 49(3) (after paragraph (ca) of the definition of eligible regulatory law)

Insert:

(cb) the Family Law Act 1975; or

Schedule 2—Indexation under the Defence Forces Retirement Benefits Act

Defence Forces Retirement Benefits Act 1948

1 Subsection 83(1)

Insert:

first quarter, in relation to a half-year, means:

(a) for a half-year beginning on 1 January in a year—the March quarter of the year; and

(b) for a half-year beginning on 1 July in a year—the September quarter of the year.

2 Subsection 83(1)

Insert:

half-year means a period of 6 months beginning on 1 January or 1 July in any year.

3 Subsection 83(1)

Insert:

prescribed half-year means the half-year commencing on 1 January 2002 or a subsequent half-year.

4 Subsection 83(1) (definition of prescribed year)

Repeal the definition.

5 Subsection 83(2)

Omit “March quarter”, substitute “first quarter in a half-year”.

6 Subsection 84(1)

Omit “March quarter” (wherever occurring), substitute “first quarter”.

7 Subsection 84(1)

Omit “year” (wherever occurring), substitute “half-year”.

8 Subsection 84(2)

Omit “year”, substitute “half-year”.

9 Subsection 84(3)

Omit “year” (wherever occurring), substitute “half-year”.

10 Subsection 84(3)

Omit “March quarter” (wherever occurring), substitute “first quarter”.

11 Subsection 84(4)

Omit “year” (wherever occurring), substitute “half-year”.

12 Subsection 84(4)

Omit “30 June” (wherever occurring), substitute “30 June or 31 December (as the case requires)”.

13 Section 84A

Omit “year” (wherever occurring), substitute “half-year”.

14 Subsection 84B(1)

Omit “year” (wherever occurring), substitute “half-year”.

15 Subsection 84B(2)

Omit “16 June in the preceding year”, substitute “16 June or 16 December (as the case requires) in the preceding half-year”.

16 Subsection 84B(3)

Omit “16 June in the preceding year”, substitute “16 June or 16 December (as the case requires) in the preceding half-year”.

17 Subsection 84B(3)

Omit “30 June in the preceding year bears to 12”, substitute “30 June or 31 December (as the case requires) in the preceding half-year bears to 6”.

18 Subsection 84C(2)

Omit “March quarter” (wherever occurring), substitute “first quarter”.

19 Subsection 84C(2)

Omit “year” (wherever occurring), substitute “half-year”.

20 Paragraph 84C(3)(a)

Repeal the paragraph, substitute:

(a) in relation to the prescribed half-year that commenced on 1 January 2002—the amount that was the existing amount in relation to that provision, as calculated under this section immediately before the commencement of Schedule 2 to the Superannuation Legislation Amendment (Family Law and Other Matters) Act 2004; and

21 Paragraph 84C(3)(b)

Omit “year”, substitute “half-year”.

22 Section 84D

Omit “30 June in a year”, substitute “30 June or 31 December (as the case requires) in a half-year”.

23 Subsection 84E(1)

Omit “year” (wherever occurring), substitute “half-year”.

24 Subsection 84E(2)

Repeal the subsection.

25 Subsection 84E(3)

Omit “year” (wherever occurring), substitute “half-year”.

26 Subsection 84F(2)

Omit “year” (wherever occurring), substitute “half-year”.

27 Subsection 84F(3)

Repeal the subsection.

28 Sections 84G and 84GA

Repeal the sections.

[Minister’s second reading speech made in—

House of Representatives on 12 December 2002

Senate on 15 May 2003]

(261/02)