Our Director and family lawyer, Jacqueline Brown on ABC radio.
19th July 2017.
Nadia: If you’re in a de facto relationship, you’ll find this next story very interesting. One of Australia’s largest industry super funds, Hester, is calling on the state government to apply Commonwealth laws to the superannuation of de-facto couples when they break up. WA is the only state where the Commonwealth laws, which sees super as a shared asset between de facto couples, are not applied. So why is it different here in WA? And is it time we fell in line with other states? Let’s speak to Jacqui Brown. She’s a director of Lynn and Brown Lawyers. Good morning.
Nadia: Let’s try that again. Good morning.
Jacqui: Good morning, Nadia.
Nadia: Jacqui, what is the situation at the moment in WA?
Jacqui: Okay, so in Western Australia, the fact is that couples are governed by the Family Court Act, which is a State act, and the rest of the country enjoys the Commonwealth Family Law Act for de-facto couples. So, we do things a little bit differently here.
And in relation to superannuation, the state government hasn’t referred any powers to the Commonwealth in order to make superannuation splittable as it is in the rest of the country. So in WA, we can’t split superannuation funds between de-facto couples when they’re separating; in the rest of the country, they can.
Nadia: Why that anomaly? Why are we different?
Jacqui: Well, we’re a bit different because when the Family Court Act came into effect in 1975, WA decided to retain its powers. And we have our own state court, which is the Family Court of Western Australia, but the rest of the country has the Family Court of Australia that deals with the jurisdiction. And initially, there was no jurisdiction that anyone had to deal with de-facto couples at all. But in 1997, WA introduced the Family Court Act, and in 2002, it was the first state in Australia to actually introduce laws dealing with de-facto couples. The federal government didn’t come to the party until 2009, but because superannuation was a Commonwealth issue and not a state issue, WA wasn’t able to make legislation dealing with superannuation.
Nadia: So, if a de facto couple living in WA. broke up now, say, versus a couple of Queensland, when they’re dividing up assets, only superannuation wouldn’t be included.
Jacqui: Superannuation is included, but it’s included in a different way than it can be for other de-facto couples in other states, or married couples in Western Australia. So, it’s treated as a resource that people have available to them at some time in the future. And depending how old the parties are, obviously that resource may be given different weight as to when they’re able to access it. But it can’t be split and it can’t be something that we can give a portion of to different parties.
Nadia: Should it be?
Jacqui: Look, certainly I think it would make things a lot cleaner and easier. I think that there are a lot of people who are focusing on super a lot more now. And if you’ve got the situation where one party is working and the other party might be not working – looking after the family – so one party has accumulated a lot of superannuation and that might be the main significant asset. But there’s still 20 years until they can access that. Then it makes it very difficult for the court to look at how to treat that if they’re not able to actually split it. So I think it’s definitely something that should be able to happen.
Nadia: What problems does it cause with that anomaly within the family, just that it’s not a level playing field, given that long-term de-facto relationships often now are seen just like a marriage?
Jacqui: That’s correct. They are. So it can create a lot of disparity for people if they’re splitting up, say, in their 40s and it’s going to be at least another 20 years before they can access their super. It can sometimes mean that one party will get the bulk of their assets or financial resources in the form of superannuation, so they can’t go and buy a property to live in or they can’t access those funds for a long time. So it can cause problems in a lot of ways.
Nadia: Does a lot of this come up in court? Has this been challenged locally in courts or is it something you’ve seen more of?
Jacqui: Well, it’s certainly it’s not something that gets challenged in court, but it certainly gets spoken about in court a lot because the family lawyers realise exactly what the situation is. And we’re not in a position where we can do anything. And the courts aren’t in a position where they can do anything differently either. They have the legislation that they have to apply. It’s really up to the WA and Federal governments to make that decision pertain to the way things are dealt with.
Nadia: And has the State Government expressed a view on this? Is there any indication that this is something they may change? Is it up to the State Government to make those changes?
Jacqui: Well, the State Government needs to refer the power to the Federal Government and then the Federal Government needs to make the changes. So, in effect, there needs to be a good working relationship between them, because Western Australia had this position where we’ve retained our own state court. There are a number of issues that make it a bit difficult for the two to work together. And one of them is funding, and the West Australian Family Court is under severe pressure with funding. And that’s a lot of the time because the WA Government says, well, the Federal Government funds the rest of the country’s family court. It should fund ours as well. And the Federal Government tends to say, well, you chose to have your own state court, so you should fund it. So there are those issues to deal with.
Nadia: Indeed, thank you, Jacqui Brown. Thanks for explaining that. And we’ll watch with interest. Thanks for your time.
Jacqui: Thank you very much, Nadia.
Nadia: Jacqui Brown is a lawyer at Lynn and Brown. She specializes in family law, talking about a push there to have WA couples in de-facto relationships to be able to have superannuation split up between them when a relationship breaks down. So, it’ll be interesting to see what happens there. WA [is] the only state where that doesn’t apply.