On 27 November 2019, the Family Law Amendment (WA De Facto Superannuation Splitting and Bankruptcy) Bill 2019 was introduced to the Commonwealth Parliament. This Bill proposes to rectify the disadvantage facing Western Australian de facto couples in property settlement. If the Bill passes through Parliament, it would:
- give effect to a referral of power from Western Australia to the Commonwealth in relation to superannuation for separating de facto couples; and
- extend the federal bankruptcy jurisdiction to the Family Court of Western Australia. This will allow the Family Court to hear bankruptcy proceedings at the same time, for de facto couples.
How does the Bill affect de facto couples with superannuation?
Unlike de facto couples in other Australian states and territories, separating de facto couples in Western Australia cannot divide superannuation for the purposes of property settlement. This anomaly has led to increasing injustice.
In a media release on 27 November 2019, the Commonwealth Attorney-General’s Department acknowledged the impact that this limitation has had on Western Australian families:
“This has particularly disadvantaged women and resulted in inequitable splits of property, especially in situations where superannuation is the main asset – as occurs often when housing assets are heavily mortgaged.”
What are the statistics?
According to the Australian Bureau of Statistics, women are accumulating less superannuation on average. In 2017‑18, the median superannuation balance for women in the 55-64 age group was $119,000. By contrast, the same statistic for men was $183,000. The disparity appears to come from two factors:
- the higher time women spent away from the workforce to raise children; and
- the higher rates of women occupying part-time or lower paid roles.
The result of this has meant that a “just and equitable property settlement” is difficult to achieve. For example, consider a situation where a couple’s superannuation is their most significant (or indeed only) asset of their property pool. For de facto couples in WA, this valuable asset is unable to be split. Therefore, w referral of power in this regard would enable de facto couples in Western Australia to divide their superannuation and have access to a fair property settlement.
What about the bankruptcy aspect of the Bill?
As it stands now, the Family Court of Western Australia has jurisdiction to concurrently hear family law and bankruptcy matters. However this is jurisdiction only applies to married couples. Therefore, de facto couples do not currently have access to the same process. As result of the current law, de facto couples with concurrent family and bankruptcy matters must be pursue them in different courts.
The Bill proposes an extension of the federal bankruptcy jurisdiction. This extension would then allow the Family Court of WA to hear bankruptcy and family law matters at the same time for separating de facto couples. The aim of this change then is to try and minimise the unnecessary time and legal costs.
Why does Bill only affect Western Australia?
All Australian states and territories have referred power to the Commonwealth for separating de facto couples in family law matters. The only state that has not done so is Western Australia.
Western Australia retained the power to make orders relating to de facto couples pursuant to the Family Court Act 1997 (WA), in which superannuation is defined as a “financial resource”. By contrast, family courts in other jurisdictions are able to deal with superannuation for de facto couples. This is because the Family Law Act 1975 (Cth) treats superannuation as “property” which can be divided.
The Bill proposes to implement a narrow referral of power from Western Australia.
Will this make the Family Court of Western Australia even busier?
It is difficult to predict whether the Bill will increase the Family Court of Western Australia’s workload. Indeed, the types of matters between de facto couples in family law proceedings may increase. However, only time will tell whether this change will also result in an increase to the number of matters.