Superannuation Disclosure Bill

On 31 May 2021 a Media Release was issued announcing an Exposure Draft Bill and Explanatory Memorandum for reform to improvement the visibility of superannuation assets in family law matters before the Courts.

In the current system, where parties to family law matters fail to disclose some or all of their superannuation accounts, their spouse must firstly know of their spouse’s accounts and use Form 6 to apply directly to the Trustee of each account to obtain the current balance. Subpoenas may also be issued to obtain this information so that superannuation balances can be considered in the context of the marital pool for division, which can include splitting of superannuation assets.

Under the proposed reform, parties may make an application to the Registrar of the Federal Circuit and Family Court of Australia (FCFCA) for this information. The Registrar will be empowered to make contact with the Commissioner of Taxation at the Australian Taxation Office (ATO) for disclosure of information of all superannuation accounts held by the spouses. This information will then be provided to the Court Registrar, for disclosure to the parties for the purpose of family law proceedings.

Good or Bad?

I see a few limitations to the Bills as drafted:

1. That the ATO can only provide the most recent balances notified to it by the superannuation funds, and it is noted that this information may be up to 18 months out of date. Where that is the case, parties must then apply (presumably through whatever new version exists of the current Form 6) individually to the named funds for up to date balances.
2. So potentially, the only real improvement of this scheme over the existing regime is that all accounts will be disclosed, even where their balances are not accurate. That’s a help, but it seems that the Bill as proposed, will not result in a simple, foolproof and efficient system to address the problem – it only goes part of the way to solving it.
3. It also raises the question of what similar mechanisms are proposed to assist parties who have not commenced proceedings (and therefore would not have access to Court Registries) who may well find themselves equally in need of this information.
4. I also note that if Court Registries choose not to issue a request to the ATO Commissioner, due to not being “in the right form” or where insufficient detail of the spouse is unknown, is a considered a discretionary decision, and as such is not subject to merits review.
5. The Explanatory Memorandum also highlights that this full and frank disclosure of a party’s superannuation assets is already an obligation of all parties to family law matters, but doesn’t propose any sanctions for non compliance by a party necessitating resort to this mechanism.

Have your say

Submissions are open through Treasury for comment until 28 June 2021. Go to https://treasury.gov.au/consultation/c2021-177055 to see more and have your say.

Media Release: https://ministers.treasury.gov.au/ministers/jane-hume-2020/media-releases/improving-visibility-superannuation-assets-family-law