George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Hansard source

I just want to provide the Senate with some information in relation to this issue, but first I indicate that the government will be opposing the disallowance motion. In doing so, that does not reflect at all on the genuineness of the concerns which Senator Roberts and his colleagues in the One Nation party hold. Senator Hanson has raised this issue with me, and I am happy to work with her and with others—I see Senator Lambie has arrived in the chamber, and I also acknowledge her interest in this issue—but the way to do this is not by supporting this disallowance motion this evening.

Let me explain to the Senate what the position is. As you know, superannuation can be a significant portion of the property pool in family law proceedings. The family law superannuation splitting regime is set out in the Family Law Act and the Family Law (Superannuation) Regulations. That regime allows superannuation interests to be split between parties when a relationship breaks down. It has been in operation since 2002.

The Family Law Act prohibits the courts from adjusting property interests, including superannuation interests, unless they are satisfied that in all the circumstances it is just and equitable to do so. Family law courts split invalidity pensions between parties, just as they split other superannuation interests where it is just and equitable to do so. Family law courts consider the form, nature and characteristics of superannuation interests in deciding what is just and equitable. The Federal Court of Australia in its decision in Campbell v Superannuation Complaints Tribunal in 2016 confirmed that military super invalidity pensions are superannuation interests for the purposes of the superannuation splitting regime.

I made the Family Law (Superannuation) (Provision of Information—Military Superannuation and Benefits Scheme) Determination 2016 on 15 November 2016. That determination amended the existing Family Law (Superannuation) (Provision of Information—Military Superannuation and Benefits Scheme) Determination 2004. The purpose of the 2004 information determination was to authorise the trustee to provide to parties to family law proceedings the information necessary to allow them to value their superannuation interests. A scheme-specific superannuation information determination was necessary in 2004 because military superannuation interests are valued using scheme-specific methods and factors. The methods and factors for valuing military super interests are contained in the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003, another legislative instrument. That 2003 instrument has not been amended.

The 2016 determination clarifies that the 2004 information determination is to be taken to have been made under both regulation 63, the source of power for accumulation interests, and regulation 64, the source of power for defined benefit interests. It was necessary to make that clarification because the Campbell decision concluded that military super invalidity pensions are accumulation interests for the purposes of the regulations. The characterisation of a military super interest as either an accumulation interest or a defined benefit interest has no impact on how the interest is valued or split. As I have noted, the valuation method is determined in accordance with the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003, and, as I said, that instrument has not been amended. It remains unchanged and the valuation methods and factors remain the same. The 2016 determination does not change whether military super interests are splitable; it merely removes the potential for uncertainty about the authority under which the trustee can provide the most useful information to facilitate valuation of the superannuation interest.

It is important to note that compensation for workplace injury is paid to ADF members under separate legislation—the Safety, Rehabilitation and Compensation Act 1988 and the Military Rehabilitation and Compensation Act 2004. These incapacity payments are economic loss compensation to ADF members and former members for lost capacity to earn due to a service injury or disease. The operation of that legislation, likewise, is unaffected by the 2016 determination.

For those reasons the government will not be supporting the disallowance motion, but, as I said, we will continue to work with colleagues to ensure that the legitimate concerns that have been raised are appropriately addressed. I thank the Senate.