This article will discuss miscellaneous provisions about payment splitting or flagging in the Family Law Act 1975. Superannuation payment splitting involves dividing the superannuation entitlements of one party between involved parties in a fair and equitable manner. The court determines the amount of superannuation entitlements that can be split between parties. To do so, the court considers the factors below:
- Length of the relationship
- Age and health of the parties; and
- Couple’s financial resources.
Payment flagging can postpone or ‘flag’ the disbursement of superannuation benefits. The purpose of payment flagging is to ensure that both parties are able to maintain a reasonable standard of living after divorce or separation. Read on to learn more about miscellaneous provisions about payment splitting or flagging.
What Is a Trustee?
A trustee refers to an individual or entity appointed that manages property or assets on behalf of another person or family members. Their role is to safeguard the property or assets, and ensures usage of assets for the best interests of the beneficiaries. These beneficiaries are typically minors or individuals who are unable to manage their own affairs.
Section 90XZD: Orders Binding on Trustee
Section 90XZD state that an order regarding superannuation interests may express the conditions under which it binds the trustee of an eligible superannuation plan. If the order binds the trustee, it also binds any person who subsequently becomes the trustee of that plan.
However, the court cannot make an order binding the trustee without providing procedural fairness if the trustee is not a secondary government trustee. In the case of a secondary government trustee, the court cannot make an order binding the trustee. This is true unless:
- Another trustee of the eligible superannuation plan has been accorded procedural fairness; and
- The court may require the secondary government trustee to be accorded procedural fairness if it thinks fit.
Section 90XZE: Protection for Trustee
Section 90XZE under miscellaneous provisions about payment splitting or flagging provides protection to trustees of eligible superannuation plans. Trustees cannot be liable for any resulting loss or damage if:
- A trustee acts in good faith; and
- Relies on a document served for superannuation interests or an order made by a court regarding superannuation interests
This means that authorities cannot hold trustees liable for actions taken in good faith based on such documents or orders.
Section 90XZF: Service of Documents on Trustee
Section 90XZF of miscellaneous provisions about payment splitting or flagging outlines the process for serving a notice or other document on a trustee of an eligible superannuation plan. The document can be served using any method allowed by the Rules of Court. Additionally, this section clarifies that this method of service is in addition to any other method of service permitted by law.
Section 90XZG: False Declarations
Section 90XZG of miscellaneous provisions about payment splitting or flagging deals with the offences of failing to comply with a payment splitting order. The section states that:
- A person who fails to comply with a payment splitting order commits an offence.
- The offence is punishable by imprisonment for a period of up to 12 months or a fine of up to 60 penalty units, or both.
- A person who has custody or control of an eligible superannuation plan must also provide information or documents to the trustee or the other party as required by the payment splitting order.
- Failure to comply with the requirements to provide information or documents also constitutes an offence punishable by imprisonment for a period of up to 12 months or a fine of up to 60 penalty units, or both.
Section 90XZH: Terminating Employment Because of Payment Flag
Section 90XH of miscellaneous provisions about payment splitting or flagging prohibits an employer from terminating an employee’s employment on the grounds that:
- A payment flag is operating; or
- A superannuation agreement or splitting order is in force in relation to the employee’s superannuation interest
Note: The penalty for breaching this section is 100 penalty units or 500 penalty units (for a body corporate).
Section 90XZJ: Requests for Commissioner of Taxation to Provide Superannuation Information
Section 90XZJ of miscellaneous provisions about payment splitting or flagging pertains to the process of applying for superannuation information in property settlement proceedings. The key points are as follows:
- A party involved in property settlement proceedings can apply to a Senior Registry official of the relevant court to request superannuation information about the other party.
- The Senior Registry official can then request the Commissioner of Taxation to disclose the superannuation information for the purpose of the proceedings.
- Once the information is disclosed by the Commissioner of Taxation, it can be shared with the applicant, their lawyers, the other party, and their lawyers, solely for the purpose of the proceedings.
- It is important to note that making a record of or disclosing the superannuation information for purposes other than the proceedings may be considered an offence. This is true unless explicitly authorised by the relevant sections of the Taxation Administration Act 1953.
- The application for superannuation information must be submitted in the approved form as determined by the Chief Executive Officer or the Senior Registry official of the respective court.
- The Senior Registry official of the Family Court of Western Australia has the authority to delegate their functions and powers under this section to other suitable officers or staff members of the court.
Terms Mentioned in Section 90XZJ
Here are some relevant terms that Section 90XZ under miscellaneous provisions about payment splitting or flagging mentions:
“Senior Registry official” refers to a court employee who is in charge of managing the court’s registry and records. In the context of the Federal Circuit and Family Court of Australia, it means a Registry Manager. Whereas, in the context of the Family Court of Western Australia, it means the Principal Registrar.
“Superannuation information” refers to information about a person’s superannuation, which is a retirement savings plan in Australia. The information includes the:
- Identity and value of any superannuation interests held by the person;
- Value of any small superannuation accounts in the person’s name;
- Any amounts payable to the person under certain superannuation laws;
- Any shortfall components payable to the person under the Superannuation Guarantee (Administration) Act 1992, and;
- Any amounts payable to the person under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003.
Importance of Seeking Legal Advice
It is crucial to seek legal advice from a family lawyer before proceeding with payment splitting or flagging for superannuation interests. Knowledgeable and experienced family lawyers, such as our lawyers at JB Solicitors, can provide valuable guidance on the relevant laws and procedures.
Our team can also assist in drafting and submitting the necessary documents. We provide mediation and arbitration services for parties who need to resolve their family law matters.
Contact us today if you need more information about miscellaneous provisions about payment splitting or flagging.