Superannuation Industry (Supervision) Amendment Regulations 2001 (No. 3)

(353 of 2001)

21 December 2001

Made under Superannuation Industry (Supervision) Act 1993

1   Name of Regulations

These Regulations are the Superannuation Industry (Supervision) Amendment Regulations 2001 (No. 3).

2   Commencement

These Regulations commence on the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001.

3   Amendment of Superannuation Industry (Supervision) Regulations 1994

Schedule 1 amends the Superannuation Industry (Supervision) Regulations 1994.

Schedule 1   Amendments

[1]   Subregulation 1.03 (1), after definition of accumulation fund

insert

accumulation interest means a superannuation interest that is not a defined benefit interest.

[2]   Subregulation 1.03 (1), after definition of Act

insert

adjusted base amount , in relation to a non-member spouse at a particular date, means the adjusted base amount applicable to the non-member spouse at that date worked out under regulation 47 of the Family Law (Superannuation) Regulations 2001.

[3]   Subregulation 1.03 (1), after definition of advance instalment of surcharge

insert

allocated pension means a pension that is provided under rules of a superannuation fund that meet the standards of subregulation 1.06 (4).

base amount payment split , in relation to a superannuation interest, means a payment split under which a base amount is allocated to the non-member spouse in relation to the interest under Part VIIIB of the Family Law Act 1975.

[4]   Subregulation 1.03 (1), after definition of defined benefit fund

insert

defined benefit interest has the meaning given by regulation 1.03AA.

[5]   Subregulation 1.03 (1), after definition of excluded member

insert

flag lifting agreement means a flag lifting agreement under Part VIIIB of the Family Law Act 1975.

[6]   Subregulation 1.03 (1), after definition of gainfully employed

insert

growth phase , for a superannuation interest, has the same meaning as in the Family Law (Superannuation) Regulations 2001.

[7]   Subregulation 1.03 (1), after definition of member-protection standards

insert

member spouse , in relation to a superannuation interest that is subject to a payment split, means the person who is the member spouse in relation to the interest under Part VIIIB of the Family Law Act 1975.

[8]   Subregulation 1.03 (1), after definition of minimum requisite benefit

insert

non-member spouse , in relation to a superannuation interest that is subject to a payment split, means the person who is the non-member spouse in relation to the interest under Part VIIIB of the Family Law Act 1975.

operative time , for a payment split, means the operative time under Part VIIIB of the Family Law Act 1975 for the payment split.

[9]   Subregulation 1.03 (1), after definition of part-time

insert

payment split means a payment split under Part VIIIB of the Family Law Act 1975.

payment split notice means a notice given by a trustee under regulation 7A.03.

[10]   Subregulation 1.03 (1), after definition of pension age

insert

percentage-only interest has the meaning given by Part VIIIB of the Family Law Act 1975.

percentage payment split , in relation to a superannuation interest, means a payment split under a superannuation agreement, flag lifting agreement or splitting order that specifies a percentage that is to apply to all splittable payments in respect of the interest.

[11]   Subregulation 1.03 (1), definition of reviewable decision, paragraph (ba)

substitute

(ba) to determine consent for subregulation 4.12 (2), paragraph 6.27B (b) or paragraph 7A.16 (8) (b); or

[12]   Subregulation 1.03 (1), after definition of shortfall component

insert

splittable payment means a splittable payment under Part VIIIB of the Family Law Act 1975.

splitting order means a splitting order under Part VIIIB of the Family Law Act 1975.

[13]   Subregulation 1.03 (1), after definition of successor fund

insert

superannuation agreement means a superannuation agreement under Part VIIIB of the Family Law Act 1975.

[14]   Subregulation 1.03 (1), after definition of Tax Act

insert

transferable benefits , in relation to a superannuation interest that is subject to a payment split and the non-member spouse in relation to that interest, means benefits that are equal to the value of:

(a) if the payment split is a base amount payment split and an adjusted base amount applies to the non-member spouse when the benefits are transferred - the adjusted base amount less the amount of any fees charged in respect of the payment split; or

(b) if the payment split is a base amount payment split and an adjusted base amount does not apply to the non-member spouse when the benefits are transferred - the base amount allocated to the non-member spouse, within the meaning of regulation 45 of the Family Law (Superannuation) Regulations 2001, less the amount of any fees charged in respect of the payment split; or

(c) if the payment split is a percentage payment split - the value of the superannuation interest at the time when the benefits are transferred multiplied by the percentage specified in the relevant superannuation agreement, flag lifting agreement or splitting order, less the amount of any fees charged in respect of the payment split.

[15]   Subregulation 1.03 (1), definition of withdrawal benefit, paragraph (c)

substitute

(c) an RSA in respect of the member; and

(d) another person or entity because of a payment split in respect of the member's interest in the superannuation entity;

[16]   After regulation 1.03A

insert

1.03AA Defined benefit interest

(1) A superannuation interest is a defined benefit interest if it is:

(a) an interest in an unfunded public sector superannuation scheme that has at least 1 defined benefit member; or

(b) an interest that entitles the member who holds the interest, when benefits in respect of the interest become payable, to be paid a benefit defined, wholly or in part, by reference to one or more of the following:

(i) the amount of:

(A) the member's salary at the date of the termination of the member's employment, the date of the member's retirement, or another date; or

(B) the member's salary averaged over a period;

(ii) a specified amount;

(iii) specified conversion factors.

(2) However, a superannuation interest is not a defined benefit interest if the only benefits defined by reference to any of the amounts or factors mentioned in subparagraphs (1) (b) (i) to (iii) are benefits payable on death or invalidity.

(3) In this regulation:

unfunded public sector superannuation scheme means a regulated superannuation fund that is declared to be an unfunded defined benefits superannuation scheme under regulation 2A of the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997.

[17]   After regulation 1.04

insert

1.04AAA Modified meaning of member (Act s 15B)

(1) This regulation applies if:

(a) a superannuation interest in a fund is subject to a payment split; and

(b) the non-member spouse in relation to the interest was not a member of the fund immediately before the operative time for the payment split.

(2) For the following provisions of the Act, the non-member spouse is to be treated as being a member of the fund in which the interest is held from the operative time for the payment split:

(a) section 17A (definition of self managed superannuation fund), except subsection (5);

(b) section 65 (lending to members of regulated superannuation fund prohibited);

(c) Part 8 (in-house asset rules applying to regulated superannuation funds).

(3) For the following provisions of the Act, the non-member spouse is to be treated as being a member of the fund in which the interest is held from the end of 6 months after the operative time for the payment split:

(a) subsection 17A (5);

(b) section 121A (person not to be trustee of certain small funds unless an approved trustee).

[18]   Subparagraph 1.06 (2) (b) (ii)

omit

; and

insert

; or

[19]   After subparagraph 1.06 (2) (b) (ii)

insert

(iii) to allow an amount to be paid under a payment split and reasonable fees in respect of the payment split to be charged; and

[20]   Subparagraph 1.06 (2)(e) (iv)

omit

; and

insert

; or

[21]   After subparagraph 1.06 (2) (e) (iv)

insert

(v) to give effect to an entitlement of a non-member spouse under a payment split; and

[22]   Paragraph 1.06 (4) (e)

omit

, except a payment by way of commutation,

insert

(excluding payments by way of commutation but including payments made under a payment split)

[23]   Paragraph 1.06 (6) (b)

after

in the rules

insert

or to allow payments to be made under a payment split

[24]   Sub-subparagraph 1.06 (7) (b) (vi) (E)

omit

; and

insert

; or

[25]   After sub-subparagraph 1.06 (7) (b) (vi) (E)

insert

(F) to give effect to an entitlement of a non-member spouse under a payment split; and

[26]   After subregulation 2.05 (3)

insert

(4) For this regulation, the non-member spouse in relation to a superannuation interest that is subject to a payment split is taken to be a member of the fund in which the interest is held.

[27]   After Division 2.5

insert

Division 2.5A Information about superannuation interest subject to payment split

2.36B Application

(1) This Division applies to:

(a) a regulated superannuation fund; and

(b) an approved deposit fund.

(2) For subsections 31 (1) and 32 (1) of the Act, a requirement of this Division is a standard applicable to the operation of the fund.

2.36C Information to be provided by trustee when interest becomes subject to payment split

(1) If an interest in a fund becomes subject to a payment split, the trustee of the fund must give to the non-member spouse in relation to the interest a written notice stating the following information:

(a) the contact details for the fund;

(b) if the interest is not a percentage-only interest and the payment split is a base amount split:

(i) the base amount allocated to the non-member spouse under the relevant superannuation agreement, flag lifting agreement or splitting order; and

(ii) the method by which the base amount will be adjusted on an ongoing basis; and

(iii) whether the governing rules of the fund would allow the non-member spouse to become a member of the fund, and information about the options available to the non-member spouse in relation to the interest under Part 7A;

(c) if the interest is not a percentage-only interest and the payment split is a percentage payment split:

(i) the percentage that is to apply to all splittable payments in respect of the interest; and

(ii) whether the governing rules of the fund would allow the non-member spouse to become a member of the fund, and information about the options available to the non-member spouse in relation to the interest under Part 7A;

(d) if the interest is a percentage-only interest:

(i) the percentage specified in the relevant superannuation agreement, flag lifting agreement or splitting order; and

(ii) if the payment split is under a superannuation agreement or flag lifting agreement, whether the percentage is to apply for the purposes of subparagraph 90MJ (1) (b) (i) of the Family Law Act 1975; and

(iii) if the payment split is under a splitting order, whether the order is made under paragraph 90MT (1) (c) of the Family Law Act 1975;

(e) the circumstances in which the entitlement of the non-member spouse will become payable;

(f) the entitlement of the non-member spouse if, at the time when the notice is given, a payment were to be made in respect of the interest that would be an eligible termination payment under Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936, and the value that the components of the payment mentioned in paragraphs 27AA (1) (a), (aa), (b), (c), (cb), (d) and (e) of that Act would have;

(g) if the governing rules of the fund would allow the non-member spouse to become a member of the fund, information that the non-member spouse would reasonably need to understand the management and financial condition of the fund and of any relevant sub-plan (for example, the fund's product disclosure statement);

(h) details of the existence and (in outline terms) the functions of the Superannuation Complaints Tribunal;

(i) details (in summary form) of arrangements the fund has to deal with inquiries or complaints;

(j) details of any fee payable by the non-member spouse in respect of the payment split, and arrangements for the payment of any such fee.

(2) The information must be given when the trustee gives the payment split notice to the non-member spouse.

Note See regulation 7A.03 for the payment split notice requirements.

2.36D Other information to be provided by trustee

(1) This regulation applies if:

(a) an interest in a fund is subject to a base amount payment split; and

(b) the interest is not a percentage-only interest; and

(c) the interest is in the growth phase; and

(d) none of the following has occurred under Part 7A:

(i) a new interest was created for the non-member spouse;

(ii) the transferable benefits of the non-member spouse were transferred or rolled out of the fund;

(iii) the amount to which the non-member spouse is entitled under the payment split was paid, as a lump sum, to the non-member spouse.

(2) The trustee of the fund must give to the member spouse and the non-member spouse the following information for each reporting period:

(a) the value of the adjusted base amount applicable to the non-member spouse at the end of the reporting period;

(b) the amount of the adjustment in the reporting period;

(c) the method used to calculate the adjustment, including the applicable interest rate under regulation 48 of the Family Law (Superannuation) Regulations 2001.

(3) The information required under subregulation (2):

(a) must be given as soon as practicable, and in any event within 6 months, after the end of the relevant reporting period; and

(b) in the case of information that is to be given to the member spouse, may be given with the information required to be given to the member spouse under Subdivision 2.4.2.

(4) The trustee of the fund must give to the non-member spouse information about any event that may have an adverse effect on the benefits to which the non-member spouse may be entitled under the payment split.

(5) The information required under subregulation (4) must be given before, or as soon as practicable after, the occurrence of the event.

(6) In this regulation:

reporting period means a reporting period that applies under Subdivision 2.4.2.

Note A non-member spouse may also be entitled to information on request under Division 2.6.

[28]   Paragraph 2.40 (3) (b)

omit

made.

insert

made; or

[29]   After paragraph 2.40 (3) (b)

insert

(c) is the non-member spouse in relation to a superannuation interest in the fund that is subject to a payment split.

[30]   Subparagraph 3.01 (e) (ii)

omit

fund.

insert

fund; or

[31]   After paragraph 3.01 (e)

insert

(f) a non-member spouse for whom an interest has been created in the fund under Part 7A.

[32]   Subregulation 4.13 (4), before definition of relative

insert

member , of a fund, includes the non-member spouse in relation to a superannuation interest in the fund that is subject to a payment split.

[33]   Paragraph 5.02 (2) (b)

omit

the fund.

insert

the fund; and

[34]   After paragraph 5.02 (2) (b)

insert

(c) if the member's benefits are subject to a payment split, the costs incurred in administering the payment split (not including the costs offset by any fees payable under regulation 59 of the Family Law (Superannuation) Regulations 2001 in respect of the payment split).

[35]   Subregulation 5.04 (1)

omit

Subject to regulations 5.05 and 5.06,

insert

Subject to regulations 5.05, 5.06 and 5.06B,

[36]   After regulation 5.06A

insert

5.06B Minimum benefits if new interest created, or benefits rolled over or transferred, under Division 7A.2

(1) This regulation applies if:

(a) an interest (the original interest ) in an accumulation fund is subject to a payment split; and

(b) under Division 7A.2:

(i) a new interest is created in the fund for the non-member spouse; or

(ii) the transferable benefits of the non-member spouse are rolled over or transferred to another fund, an EPSSS or an RSA.

(2) If subparagraph (1) (b) (i) applies, the trustee may decide that all the benefits held in the original interest, and in the new interest, immediately after the new interest is created are minimum benefits.

(3) If subparagraph (1) (b) (ii) applies, the trustee may decide that all the benefits held in the original interest immediately after the transferable benefits are rolled over or transferred are minimum benefits.

Note Transferable benefits rolled over or transferred to another regulated superannuation fund would be minimum benefits in accordance with regulation 5.06.

(4) However, the trustee must not make a decision mentioned in subregulation (2) or (3) if the decision would have the effect of reducing the minimum benefits held by the other members of the fund.

(5) If the trustee does not make a decision mentioned in subregulation (2) or (3), the minimum benefits held in the original interest are allocated between the member spouse and the non-member spouse in proportion to the split of benefits in the original interest.

[37]   Subregulation 6.17 (2)

substitute

(2) A member's benefits in a fund:

(a) may be paid only by:

(i) being cashed in accordance with Division 6.3 or Part 7A; or

(ii) being rolled over or transferred in accordance with Division 6.4 or Part 7A; and

(b) must not be paid except when, and to the extent that, the fund is required or permitted under this Part or Part 7A to pay them; and

(c) must be paid when, and to the extent that, the fund is required under this Part or Part 7A to pay them.

[38]   Subregulation 6.17A (4)

omit

Subject to regulation 6.17B,

insert

Subject to regulations 6.17B, 7A.17 and 7A.18,

[39]   Subregulation 6.22 (1)

omit

Subject to regulation 6.22B,

insert

Subject to regulations 6.22B, 7A.13, 7A.17 and 7A.18,

[40]   Regulation 6.26

omit

A member's benefits

insert

Subject to regulations 7A.13, 7A.17 and 7A.18, a member's benefits

[41]   Paragraph 7.04 (1) (c)

omit

contributions.

insert

contributions; or

[42]   After paragraph 7.04 (1) (c)

insert

(d) the contributions are in satisfaction of an entitlement under a payment split.

[43]   After Part 7

insert

Part 7A Superannuation interests subject to payment split

Division 7A.1 General

7A.01 Purpose of Part 7A

The purpose of this Part is:

(a) to facilitate the payment splitting arrangements established under Part VIIIB of the Family Law Act 1975; and

(b) to provide for additional options that may be exercised in relation to superannuation interests that are subject to a payment split under that Act.

7A.02 Operating standards

For subsections 31 (1) and 32 (1) of the Act, the standards set out in this Part are applicable to the operation of regulated superannuation funds and approved deposit funds.

7A.03 Trustee to give payment split notice

(1) If an interest in a regulated superannuation fund or an approved deposit fund becomes subject to a payment split, the trustee of the fund must notify the member spouse and the non-member spouse in relation to the interest that the interest is subject to a payment split.

(2) The notice must:

(a) be in writing; and

(b) state the date on which it is given.

(3) The notice must be given:

(a) for a payment split under a superannuation agreement or flag lifting agreement - within 28 days after the operative time for the payment split; and

(b) for a payment split under a splitting order - by the later of:

(i) the end of 28 days after the operative time for the payment split; and

(ii) the end of 28 days after the trustee receives a copy of the order.

(4) Despite subregulation (1), the trustee is not required to give a payment split notice in respect of an interest if the interest ceases to be subject to the payment split before the end of the period applying under subregulation (3).

Note See Divisions 2.5A and 2.6 in relation to other information that the trustee must give to a non-member spouse in relation to a superannuation interest that is subject to a payment split.

Division 7A.2 Options available for certain superannuation interests

7A.04 Application of Division 7A.2

This Division applies in relation to a superannuation interest (the original interest ) in a regulated superannuation fund, or an approved deposit fund, if:

(a) the original interest is subject to a payment split; and

(b) either:

(i) the original interest is an accumulation interest that is in the growth phase; or

(ii) an allocated pension is being paid in respect of the original interest.

7A.05 Request for new interest

The non-member spouse may request the trustee to create a new interest for the non-member spouse in the regulated superannuation fund or approved deposit fund in which the original interest is held.

7A.06 Request for transfer of benefits

(1) The non-member spouse may request the trustee to roll over or transfer the transferable benefits to another regulated superannuation fund or approved deposit fund, or to an EPSSS or RSA, specified in the request, to be held for the benefit of the non-member spouse.

(2) If the original interest is in a self managed superannuation fund, the non-member spouse, or the member spouse, may request the trustee to roll over or transfer the transferable benefits to another regulated superannuation fund or approved deposit fund, or to an EPSSS or RSA, specified in the request, to be held for the benefit of the non-member spouse.

7A.07 Request for lump sum payment

(1) This regulation applies if the non-member spouse has satisfied a relevant condition of release at the operative time for the payment split.

(2) The non-member spouse may request the trustee to pay to the non-member spouse, as a lump sum, the amount to which the non-member spouse is entitled under the payment split.

(3) For this regulation:

(a) relevant condition of release means a condition of release mentioned in item 101, 102, 103, 106, 201, 202, 203 or 206 of Schedule 1; and

(b) a non-member spouse satisfies a condition of release if the event specified in the condition has occurred in relation to the non-member spouse; and

(c) in the application of item 101, 103, 201 or 203 of Schedule 1 to a non-member spouse, a reference to a member in:

(i) the definition of permanent incapacity in subregulation 6.01 (2); or

(ii) the definition of retirement in subregulations 6.01 (2) and (7);

is taken to be a reference to the non-member spouse.

7A.08 Requirements for requests

(1) A request by a person under this Division must be made:

(a) before the end of 28 days after the trustee gives a payment split notice to the person; or

(b) if the trustee allows a longer period, before the end of the longer period allowed.

(2) The request must be made by written notice given to the trustee.

(3) The notice must:

(a) be signed by the person making the request; and

(b) state the date when it is given to the trustee; and

(c) for a request by the non-member spouse, include his or her name, date of birth and postal address; and

(d) for a request by the member spouse, include a written nomination by the non-member spouse of the regulated superannuation fund, approved deposit fund, EPSSS or RSA specified in the request.

(4) The trustee may allow the request to be withdrawn.

7A.09 Giving effect to request

(1) This regulation applies if a trustee receives a request under this Division within the time allowed under regulation 7A.08.

(2) The trustee must give effect to the request unless:

(a) the trustee has received an earlier request under this Division in respect of the same interest and the earlier request has not been withdrawn; or

(b) for a request under regulation 7A.05 - the governing rules of the regulated superannuation fund or approved deposit fund in which the original interest is held do not allow a new interest to be created for the non-member spouse in the fund; or

(c) for a request under regulation 7A.06 - the regulated superannuation fund, approved deposit fund, EPSSS or RSA specified in the request does not accept the rollover or transfer of benefits for the non-member spouse.

(3) If paragraph (2) (b) or (c) applies, the trustee must roll over or transfer the transferable benefits to:

(a) another regulated superannuation fund, approved deposit fund, EPSSS or RSA nominated by the non-member spouse; or

(b) an eligible rollover fund.

(4) If transferable benefits are rolled over or transferred to an eligible rollover fund under paragraph (3) (b), the trustee must give to the non-member spouse a written notice stating:

(a) that the benefits have been rolled over or transferred to an eligible rollover fund; and

(b) the name and contact details for the fund.

7A.10 Trustee options if no request received

(1) If the trustee does not receive a request under this Division within the time allowed under regulation 7A.08, the trustee may:

(a) create a new interest for the non-member spouse in the regulated superannuation fund or approved deposit fund in which the original interest is held; or

(b) subject to subregulation (2), roll over or transfer the transferable benefits to another regulated superannuation fund or approved deposit fund, or to an EPSSS or an RSA, nominated by the non-member spouse (subject to the governing rules of the other regulated superannuation fund, approved deposit fund or EPSSS or the terms and conditions of the RSA), to be held for the benefit of the non-member spouse; or

(c) if the trustee does not, within the 28-day period specified in paragraph (2) (a), receive from the non-member spouse a written notice nominating a regulated superannuation fund, approved deposit fund, EPSSS or RSA to which the transferable benefits may be rolled over or transferred, roll over or transfer the transferable benefits to an eligible rollover fund.

(2) Before rolling over or transferring the transferable benefits to a regulated superannuation fund, approved deposit fund, EPSSS or RSA under paragraph (1) (b), the trustee must give to the non-member spouse a written notice stating that:

(a) the non-member spouse has 28 days from the date of the notice in which to nominate, by written notice to the trustee, a regulated superannuation fund, approved deposit fund, EPSSS or RSA to which the transferable benefits may be rolled over or transferred; and

(b) if the non-member spouse does not, within that 28-day period, nominate a regulated superannuation fund, approved deposit fund, EPSSS or RSA for that purpose, the trustee will roll over or transfer the transferable benefits to an eligible rollover fund.

(3) A notice given by the trustee under subregulation (2) must state the name and contact details of the eligible rollover fund to which the non-member spouse's transferable benefits may be rolled over or transferred.

7A.11 Creating a new interest

(1) This regulation applies if the trustee creates a new interest for the non-member spouse in the regulated superannuation fund or approved deposit fund in which the original interest is held:

(a) to give effect to a request under regulation 7A.05; or

(b) on the trustee's initiative under paragraph 7A.10 (1) (a).

(2) Subject to subregulations (3) and (4), the value of the benefits that the non-member spouse has in the new interest must be equal to the value of:

(a) if the payment split is a base amount payment split and an adjusted base amount applies to the non-member spouse when the new interest is created - the adjusted base amount less the amount of any fees charged in respect of the payment split; or

(b) if the payment split is a base amount payment split and an adjusted base amount does not apply to the non-member spouse when the new interest is created - the base amount allocated to the non-member spouse, within the meaning of regulation 45 of the Family Law (Superannuation) Regulations 2001, less the amount of any fees charged in respect of the payment split; or

(c) if the payment split is a percentage payment split - the value of the original interest at the time when the new interest is created multiplied by the percentage specified in the relevant superannuation agreement, flag lifting agreement or splitting order, less the amount of any fees charged in respect of the payment split.

(3) If a splittable payment becomes payable in respect of the member spouse's interest before the new interest is created, the value of the benefits that the non-member spouse has in the new interest must be the amount applying under subregulation (2) less the amount the non-member spouse is entitled to be paid in respect of the splittable payment.

(4) The value of the benefits that the non-member spouse has in the new interest must not be more than the value of the withdrawal benefit in relation to the member spouse and the original interest immediately before the payment split.

(5) The value of the benefits that the member spouse has in his or her interest must be reduced by the value of the benefits that the non-member spouse has in the new interest.

(6) In creating the new interest, amounts must be taken proportionately from the unrestricted non-preserved benefits, restricted non-preserved benefits and preserved benefits of the member spouse.

(7) The benefits held in the new interest are unrestricted non-preserved benefits, restricted non-preserved benefits or preserved benefits in accordance with the character that they had in the member spouse's interest.

(8) A new interest created to give effect to a request under regulation 7A.05 is taken to be created on the day when the trustee receives the request in accordance with regulation 7A.08.

(9) A new interest created on the trustee's initiative under paragraph 7A.10 (1) (a) is taken to be created on the twenty-ninth day after the date when the payment split notice in relation to the payment split was given by the trustee.

(10) Within 28 days after the new interest is created, the trustee must notify the non-member spouse that the new interest has been created.

7A.12 Rolling over or transferring transferable benefits

(1) This regulation applies if the trustee rolls over or transfers transferable benefits:

(a) to give effect to a request under regulation 7A.06; or

(b) on the trustee's initiative under paragraph 7A.10 (1) (b) or (c).

(2) The value of the benefits that the member spouse has in his or her interest must be reduced by the value of the transferable benefits.

(3) In rolling over or transferring the transferable benefits, amounts must be taken proportionately from the unrestricted non-preserved benefits, restricted non-preserved benefits and preserved benefits of the member spouse.

(4) The trustee must roll over or transfer the transferable benefits as follows:

(a) if the rollover or transfer is to give effect to a request under regulation 7A.06, it must be done within:

(i) 90 days after receiving the request; or

(ii) any longer period allowed by the Regulator;

(b) if the rollover or transfer is to be done on the trustee's initiative under paragraph 7A.10 (1) (b), it must be done within 90 days after the trustee receives the nomination from the non-member spouse under subregulation 7A.10 (2);

(c) if the rollover or transfer is to be done on the trustee's initiative under paragraph 7A.10 (1) (c), it must be done within 90 days after the end of the 28-day period mentioned in subregulation 7A.10 (2).

(5) Within 28 days after the transferable benefits are rolled over or transferred, the trustee must:

(a) notify the non-member spouse that the benefits have been rolled over or transferred; and

(b) if the rollover or transfer was requested by the member spouse, notify the member spouse that the benefits have been rolled over or transferred.

7A.13 Paying a lump sum

(1) This regulation applies if, to give effect to a request under regulation 7A.07, the trustee pays to the non-member spouse, as a lump sum, the amount to which the non-member spouse is entitled under the payment split.

(2) Subject to subregulations (3) and (4), the value of the lump sum to be paid to the non-member spouse must be equal to the value of:

(a) if the payment split is a base amount payment split and an adjusted base amount applies to the non-member spouse at the date of the payment - the adjusted base amount less the amount of any fees charged in respect of the payment split; or

(b) if the payment split is a base amount payment split and an adjusted base amount does not apply to the non-member spouse at the date of the payment - the base amount allocated to the non-member spouse, within the meaning of regulation 45 of the Family Law (Superannuation) Regulations 2001, less the amount of any fees charged in respect of the payment split; or

(c) if the payment split is a percentage payment split - the value of the original interest at the date of the payment multiplied by the percentage specified in the relevant superannuation agreement, flag lifting agreement or splitting order, less the amount of any fees charged in respect of the payment split.

(3) If a splittable payment becomes payable in respect of the member spouse's interest before the lump sum is paid to the non-member spouse, the value of the lump sum to be paid to the non-member spouse must be the amount applying under subregulation (2) less the amount the non-member spouse is entitled to be paid in respect of the splittable payment.

(4) The value of the lump sum to be paid to the non-member spouse must not be more than the value of the withdrawal benefit in relation to the member spouse and the original interest immediately before the payment split.

(5) The value of the benefits that the member spouse has in his or her interest must be reduced by the value of the lump sum paid to the non-member spouse.

(6) In paying the lump sum to the non-member spouse, amounts must be taken proportionately from the unrestricted non-preserved benefits, restricted non-preserved benefits and preserved benefits of the member spouse.

(7) The trustee must pay the lump sum within:

(a) 90 days after receiving the request under regulation 7A.07; or

(b) any longer period allowed by the Regulator.

Division 7A.3 Splittable payments - payment standards for non-member spouse entitlements

7A.14 Application of Division 7A.3

This Division applies if:

(a) an interest (the original interest ) in a regulated superannuation fund or approved deposit fund is subject to a payment split; and

(b) the non-member spouse is entitled to be paid an amount from the original interest because a splittable payment in respect of the interest has become payable; and

(c) a new interest has not been created for the non-member spouse, or the transferable benefits of the non-member spouse have not been transferred or rolled out of the fund, under Division 7A.2.

7A.15 Meaning of relevant condition of release

For this Division:

(a) relevant condition of release means a condition of release mentioned in item 101, 102, 103, 106, 201, 202, 203 or 206 of Schedule 1; and

(b) a non-member spouse satisfies a condition of release if the event specified in the condition has occurred in relation to the non-member spouse; and

(c) in the application of item 101, 103, 201 or 203 of Schedule 1 to a non-member spouse, a reference to a member in:

(i) the definition of permanent incapacity in subregulation 6.01 (2); or

(ii) the definition of retirement in subregulations 6.01 (2) and (7);

is taken to be a reference to the non-member spouse.

7A.16 Preservation of non-member spouse entitlements

(1) Subject to regulation 7A.17, this regulation applies if the non-member spouse has not satisfied a relevant condition of release at the time of the splittable payment.

(2) The trustee of the regulated superannuation fund or approved deposit fund in which the original interest is held must:

(a) allocate the amount to an interest that the trustee creates for the non-member spouse in the regulated superannuation fund or approved deposit fund; or

(b) roll over or transfer the amount to another regulated superannuation fund or an RSA, to be held for the benefit of the non-member spouse.

(3) If the non-member spouse's entitlement under the payment split is to be paid as a lump sum, the trustee must allocate, roll over or transfer the lump sum within:

(a) 90 days after the splittable payment becomes payable; or

(b) any longer period allowed by the Regulator.

(4) If the non-member spouse's entitlement derives from a pension being paid to the member spouse (other than a pension to which regulation 7A.17 applies), the trustee must allocate, roll over or transfer the amounts to which the non-member spouse is entitled:

(a) if the governing rules of the fund provide for the frequency with which pension payments are to be made to the member spouse - in accordance with those rules; or

(b) in any other case - at least annually.

(5) Subject to subregulation (6), the amount must not be allocated, rolled over or transferred unless the trustee of the transferor fund:

(a) has received, from the non-member spouse, consent to the allocation, rollover or transfer; or

(b) believes, on reasonable grounds, that the trustee of the receiving regulated superannuation fund or RSA has received from the non-member spouse consent to the allocation, rollover or transfer.

(6) If the trustee of the transferor fund believes, on reasonable grounds and after making reasonable inquiries, that the non-member spouse has not given a consent mentioned in subregulation (5):

(a) the trustee must apply, under subsection 243 (2) of the Act, for the issue to the non-member spouse of an interest in an eligible rollover fund that is a regulated superannuation fund; and

(b) the amount must be rolled over or transferred to that fund.

(7) The consent of the member spouse to a rollover or transfer under this regulation is not required.

(8) In subregulation (5):

consent means:

(a) written consent; or

(b) any other form of consent determined by the Regulator as sufficient in the circumstances.

7A.17 Payment of non-member spouse entitlements from pension

(1) This regulation applies if:

(a) the non-member spouse has not satisfied a relevant condition of release at the time of the splittable payment; and

(b) the member spouse was being paid a pension in respect of the original interest on or before the operative time for the payment split.

(2) When the splittable payment becomes payable, the trustee of the regulated superannuation fund or approved deposit fund in which the original interest is held must pay the amount to which the non-member spouse is entitled to the non-member spouse.

7A.18 Cashing of non-member spouse entitlements

(1) This regulation applies if the non-member spouse has satisfied a relevant condition of release at the time of the splittable payment.

(2) When the splittable payment becomes payable, the trustee of the fund must:

(a) pay the amount to which the non-member spouse is entitled to the non-member spouse; or

(b) if the amount is not a pension, and the non-member spouse so requests:

(i) allocate the amount to an interest the trustee creates for the non-member spouse in the regulated superannuation fund or approved deposit fund in which the original interest is held; or

(ii) roll over or transfer the amount to another regulated superannuation fund or an RSA, nominated by the non-member spouse, to be held for the benefit of the non-member spouse.

[44]   After regulation 9.02

insert

9.02A Interpretation

A reference in this Division to:

(a) benefits vested in a member of a fund; or

(b) aggregate benefit accounts of a member of a fund; or

(c) benefits accrued to a member of a fund; or

(d) obligations of a fund in respect of a member;

includes any amounts that would be payable to the member's spouse or former spouse under a payment split.

[45]   Subregulation 9.15 (2), definition of benefit entitlements of former members

after

beneficial interests in the fund

insert

(including any amount that would be payable out of those interests to the spouse, or former spouse, of the former member under a payment split)

[46]   Subregulation 9.15 (2), definition of MRB

after

benefits

insert

(including any amount that would be payable out of those benefits to the member's spouse or former spouse under a payment split)

[47]   Regulation 9.27, definition of accrued benefits

omit

that date.

insert

that date (including any amount that would be payable out of those benefits to the member's spouse or former spouse under a payment split).

[48]   Subregulation 9.35 (1), definition of minimum guaranteed benefit, paragraph (b)

omit

member.

insert

member; and

[49]   Subregulation 9.35 (1), definition of minimum guaranteed benefit, after paragraph (b)

insert

(c) any minimum benefits of the member under regulation 5.06B, that are not included in paragraph (a) or (b).

[50]   Subregulation 10.03 (2), including the note

substitute

(2) For paragraph 243 (1) (c) of the Act, the condition is that the beneficiary is not a non-member spouse whose entitlement under a payment split is to be dealt with under regulation 7A.16.

(3) For paragraph 243 (3) (b) of the Act, the amount of the consideration for the issue of a superannuation interest is the amount of the beneficiary's withdrawal benefit in the transferor fund (not including any amount that would be payable to the member's spouse or former spouse under a payment split).

Note Section 243 of the Act sets out the circumstances in which the trustee of a fund may apply to an eligible rollover fund, on behalf of a beneficiary of the fund, for the issue of a superannuation interest in the eligible rollover fund to the beneficiary.

[51]   After subregulation 13.13 (2)

insert

(3) A payment split in respect of a member's interest in a superannuation fund is not a charge over or in relation to the member's benefits for subregulation (1).

[52]   Subparagraph 13.16 (2) (a) (i)

substitute

(i) subject to subregulation (3), written consent to the alteration has been given by:

(A) the beneficiary; and

(B) if the benefits are subject to a payment split, the non-member spouse; or

[53]   ;Sub-subparagraph 13.16 (2) (e) (ii) (B)

omit

paid.

insert

paid; or

[54]   After paragraph 13.16 (2) (e)

insert

(f) the alteration is necessary to give effect to a payment split.

[55]   After paragraph 13.16 (3) (a)

insert

(ab) if the benefits are subject to a payment split, the trustee has given a copy of the notice to the non-member spouse; and

[56]   Paragraph 13.16 (3) (b)

omit

the beneficiary has been allowed

insert

the beneficiary, and the non-member spouse (if any), have been allowed

[57]   After subregulation 13.16 (5)

insert

(6) In deciding whether to consent to an alteration under subparagraph (2) (a) (ii), the Regulator must consider the effect that the alteration would have on the value of benefits that may become payable to a person who is the non-member spouse in relation to an interest in the fund that is subject to a payment split.