Wednesday, 27 November 2019
Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Bill 2019; Second Reading
That this bill be now read a second time.
It is with genuine and great pleasure that I introduce to this parliament the Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Bill 2019.
That is because the bill will end the inequality faced by separating de facto couples in my home state of Western Australia that has endured for the past 10 years by allowing them to split their superannuation as part of a family law property settlement. It will also allow Western Australian de facto couples to have bankruptcy matters heard concurrently with their family law proceedings, avoiding the need to pursue them as separate proceedings in two different courts.
These important measures will provide greater access to justice for Western Australian de facto couples by providing fairer and faster resolution of their disputes. The bill will mean Western Australian de facto couples will be able to achieve a fair split of their superannuation assets as part of a property settlement, while also saving them valuable time and money in resolving bankruptcy and family law disputes together.
In doing so, the bill will bring Western Australia de facto couples in line with other de facto and married couples right across Australia, ensuring they are treated in an equitable way.
With respect to superannuation splitting, between 2003 and 2010, all states other than Western Australia provided the Commonwealth with the full subject matter referral of powers for all de facto financial matters, including superannuation. Since these referrals were given effect, all de facto couples except for those in Western Australia have been able to split their superannuation interests following the breakdown of their relationship.
In 2006, Western Australia provided a narrow referral of power to the Commonwealth for de facto superannuation splitting only. Previous governments have not accepted this narrow referral because it did not extend to other de facto financial matters, such as the allocation of property interest more broadly, or spousal maintenance.
It has become clear, however, that the inability for de facto couples in WA to split their superannuation is resulting in unfair and inequitable property settlements in many cases. This is because the court has to try and offset the value of the superannuation with other assets of the relationship, like equity in a house or savings. This is not always possible, particularly for couples with large mortgages, or few other assets between them.
Superannuation is, of course, an increasingly valuable asset for Australians and can be the largest single asset in the property pool of a separating family. Being unable to split this important asset disproportionately affects women, who accumulate less superannuation, on average, than do men.
To ensure de facto couples in WA, like other de facto couples across Australia, can achieve a fair split of their superannuation in property settlements, the Morrison government agreed in 2018 to accept the narrow referral power, and end the disadvantage faced by Western Australian de facto couples.
(Quorum formed) This will ensure that de facto couples in Western Australia, like other de facto couples across Australia, can achieve a fair split of their superannuation in property settlements. The Morrison Government agreed in 2018 to accept the narrow referral of power.
The narrow referral is implemented through schedule 1 of the bill, which will create a new part VIIIC in the Family Law Act 1975, dealing solely with superannuation splitting for separating de facto couples in WA.
This new part largely replicates the existing superannuation splitting provisions and definitions that apply to married and de facto couples in other states and territories, which are located in part VIIIB of the Family Law Act. Having the provisions in a single part of the act will make it simpler and easier for judges, lawyers, and separating de facto couples in WA to find and use the new regime.
Under the bill, de facto couples will be able to split their superannuation by court order, or by an agreement made between them. The bill provides that any financial agreement relating to a couples' superannuation interests will form part of a broader financial agreement made under the relevant law, the Family Court Act 1997(WA). This will ensure that de facto couples only need to make one agreement which covers their superannuation interests and other property, such as their house.
The bill provides that appeals with respect to superannuation interests of de facto couples will lie to the Supreme Court of Western Australia, ensuring that de facto couples have a single appeal pathway for their family law property disputes.
The nature of the narrow referral of power means that all other aspects of property division for separated WA de facto couples will continue to be dealt with under WA law.
With respect to the bankruptcy jurisdiction, the bill will also end the disadvantage faced by WA de facto couples in resolving family law matters where either or both parties are also involved in bankruptcy proceedings.
Presently, WA de facto couples need to resolve these matters through separate proceedings in two different courts: family law proceedings in the Family Court of WA, and bankruptcy proceedings in the Federal Court of Australia or the Federal Circuit Court of Australia.
Schedule 2 of the bill will extend federal bankruptcy jurisdiction to the Family Court of Western Australia, which will allow bankruptcy and family law matters of de facto couples to be heard concurrently in a single court. This will avoid the need for couples to commence proceedings in two different courts, saving them valuable time, money and effort.
Schedule 2 of the bill largely mirrors existing provisions of the Bankruptcy Act that provide the Family Court of Australia with jurisdiction in bankruptcy when a party to a family law proceeding is a bankrupt.
The bill also provides that appeals in relation to concurrent family law and bankruptcy proceedings for WA de facto couples will mirror existing appeal pathways for married and de facto couples in other jurisdictions. To achieve that consistency, appeals will lie to the full court of the Federal Court where the bankruptcy matter originates in the Federal Court or Federal Circuit Court and is subsequently transferred to the Family Court of Western Australia. These proceedings generally involve complicated questions of bankruptcy law and are best considered by the specialist bankruptcy court, the Federal Court. Matters that originate in the Family Court of Western Australia will be appealed to the Supreme Court of Western Australia.
The ability to have bankruptcy and family law matters heard together will bring de facto couples in line with married couples in WA, and with married and de facto couples in other states and territories. The bill will therefore provide for a nationally consistent approach to the exercise of bankruptcy jurisdictions in concurrent bankruptcy and family law matters.
The remaining schedules in the bill outline the required consequential amendments to other Commonwealth acts, along with the application and transitional provisions, necessary to support the smooth implementation of this important new regime.
By way of conclusion, the reforms in this bill will play a vital role in ending disadvantage for WA de facto couples and their families, and I'm proud to be a part of that. By enabling these couples to split their superannuation, and to commence concurrent family law and bankruptcy matters in the same court, the bill will help WA de facto couples resolve their disputes in a fairer, faster and simpler way. I commend the bill to the House.