Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

I want to make some remarks about this legislation on my own behalf but also on behalf of Senator Brandis, who has coalition responsibility for the carriage of this legislation. I indicate that the coalition intends to support this bill, the Judges and Governors-General Legislation Amendment (Family Law) Bill 2012. The bill is a response to a claimed anomaly arising from federal judges' and the Governor-General's pension entitlements in the event of property settlements in family law proceedings. It seeks to provide for a separate interest benefit for the purposes of a property settlement.

The Judicial Pensions Act 1968 provides for a lifetime pension of 60 per cent of the income of sitting judges, including future pay rises, after a minimum of 10 years' service if judges have attained 60 years of age. On their death, their surviving spouse receives a lifetime pension at a reduced rate. Unlike other Commonwealth defined benefit schemes, however, a separate interest benefit for the purposes of a property settlement is not provided for.

Under the Family Law Act 1975, superannuation interests form part of the property of a married person or de facto partner and therefore can be split between separating parties at the time of a property settlement. Because judicial pensions have not, until now, been amenable to a split, an anomaly arises in the case of matrimonial proceedings involving federal judges. One such case has been the subject of detailed scrutiny in the media in recent times.

The bill was referred to the Senate Legal and Constitutional Affairs Legislation Committee, which reported on 10 May, unanimously recommending that the bill be passed. It concluded that the reforms proposed in the bill align the family law arrangements for judges and Governors-Generals' superannuation interests with the family law policy of a clean break for separating couples, as well as bringing consistency to Commonwealth defined benefit superannuation schemes.

It is obviously ironic that Family Court judges preside over an arrangement with respect to other breakdowns in relationships when it comes to dividing property, including superannuation assets of a marriage, but cannot make the same determinations in respect of each other when a marriage of a judge is unfortunate enough to break down.

For judges, the current percentage-only splitting arrangements mean that any split in a family law settlement of the pension of a judge occurs only when payments are made to a retired judge. Payments to a former spouse do not commence until the judge retires and cease upon the death of the judge. There is no certainty as to the overall quantum of benefit that the former spouse is entitled to receive.

The bill seeks to resolve these inconsistencies by bringing the arrangements into line with family law policy and with other Commonwealth superannuation schemes—and they give judges and governors-general greater control over their respective individual benefits. The ability to divide superannuation is an important part of seeking a fair and appropriate outcome in relationship breakdown matters.

This issue was highlighted in a report by the Sex Discrimination Commissioner Elizabeth Broderick in 2008 when she reported that the current Judges Pension Act 1968 may be inconsistent with the objects of the Sex Discrimination Act 1984 and may also violate the Convention on the Elimination of All Forms of Discrimination against Women.

The proposal to provide for family law retirement income-splitting arrangements to apply to pensions paid to judges and Governors-General has its origins in this 2008 finding by the commissioner. She said that, as a consequence of the current arrangements for federal judges, three major disadvantages for divorcing spouses are likely: firstly, commencement of pension payments is timed with the judge's retirement and is therefore uncertain; secondly, for women nonmembers there may be a gap between their retirement and their entitlement to pension payments, given that men tend to work longer than women; and, thirdly, there is no entitlement to pension payments after the judge dies. Given the differential life expectancies of women and men, this means that women affected are unlikely to receive pension payments for the duration of their retirement.

I think we can see very clearly why it is appropriate that some alignment of arrangements be made between these particular servants and other servants of the Commonwealth, and other members of the community.

I note that there were 120,000 marriages in Australia in 2009 and in the same year there were approximately 49,000 divorces, so these issues arise with some frequency in the broader community and occur, as we have heard, among members of the judiciary. On behalf of Senator Brandis and myself, I commend this legislation to the house.

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I thank Senator Humphries for his participation in this debate and commend the bill to the Senate.

Question agreed to.

Bill read a second time.