Social Security (Family Law Affected Income Streams) Principles 2022

The instrument centres on a few core concepts that structure its scope and operation.

Family law affected income stream (FLA income stream). The instrument applies to income streams affected by family law mechanisms listed in Part VIIIB or Part VIIIC of the Family Law Act 1975, including payment splits, splitting orders, superannuation agreements and flag lifting agreements (see s 4 definitions and repeated references in Parts 2-6). The Secretary’s obligations are triggered when computing annual ordinary income or asset value of those income streams under specified Social Security Act provisions (s 5).

Income‑stream typology. The instrument distinguishes among:

• asset‑test exempt income streams (Part 2, s 7);
• asset‑tested income streams (long term) (Part 3, s 10);
• asset‑tested income streams (short term) as covered within the asset‑value Part (Part 4, s 13); and
• asset‑tested income streams (lifetime) (Parts 5 and 6, ss 16 and 18).
  Different parts require the Secretary to have regard to different subsets of matters in Schedule 1, so the type/class of income stream changes the data and valuation matters that the Secretary must consider (compare ss 8, 9, 11, 12, 14, 15, 17 and 19).

Defined benefit and other types. Several provisions distinguish defined benefit income streams and military invalidity pension income streams from other income streams. Where the income stream is a defined benefit stream, the Secretary must have regard to a broader set of Schedule 1 matters in some Parts (for example, s 9(2) and s 12(2) include items 1-12 or 1-23, whereas the non‑defined benefit equivalents exclude some items).

Matters to have regard to. Schedule 1 lists 25 discrete matters (items 1-25) the Secretary must have regard to, ranging from commencement day, operative time, purchase price, relevant number, initial annual payment, indexation rate, deductible amount and residual capital value, to asset values at specified historic points, the amounts payable to member and non‑member spouses from primary and secondary FLA income streams, commuted amounts, and detailed rules for base amount payment splits and created new interests or rollovers (Schedule 1 items 1-25). The Schedule items combine timing, valuation, beneficiary, commutation and split‑mechanics data.

Cross‑references to other instruments and statutes. The instrument relies on definitions and valuation concepts from other instruments and statutes:

• it takes the meaning of "allocated pension" and "market linked pension" from the Family Law (Superannuation) Regulations 2025 (s 4);
• it takes "asset value" from regulation 3A.05 of the SIS Regulations (s 4);
• it uses the notions of assessment day, purchase amount and threshold day by adopting the formula and calculation methods in ss 1120AA and 1120AB of the Social Security Act, but it explicitly notes those sections do not apply to family law affected income streams (s 4 Note).
  These cross‑references mean the Secretary’s consideration will often require applying valuation and calculation methods that sit partly in other regulatory instruments.

Obligation standard. The instrument repeatedly uses the language "must have regard to" (for example, ss 8(2), 9(2), 11(2), 12(2), 14(2), 15(2), 17(1), 19(1)). That is a statutory obligation to consider the listed matters; it does not, on its face in this instrument, prescribe the outcome or a rigid formula. The instrument also permits consideration of "any other matter that the Secretary considers relevant" in the circumstances (repeated in many sections), indicating residual discretion.

Multiple payment splits. The instrument systematically requires separate consideration where payments are being made under more than one payment split (see ss 8(3), 9(3), 11(3), 12(3), 14(3), 15(3), 17(2), 19(2)). Practically, an income stream that has been subject to more than one family law transaction must be analysed by applying the Schedule items to each split.

Categories of special mechanics. Schedule items 20-23 and 25 map to particular family law split mechanics:

• percentage payment splits (items 20-21);
• base amount payment splits (item 22), which require court‑determined values or trustee information and detailed records of first and subsequent splittable payments;
• creation of a new interest or rollovers or transfers to another fund or RSA to satisfy the non‑member spouse (item 23);
• assessment and threshold day mechanics where the member spouse has or has not reached the relevant days (items 24-25).
  These items identify precise factual/valuation nodes the Secretary must examine.

In short, the main concepts are that the instrument is a tailored direction to the Secretary which maps legal categories of FLA income streams to a checklist of valuation, timing and transactional facts the Secretary must consider for means testing under the Social Security Act, and it does so while importing some calculation concepts from other regulatory instruments.

This instrument allocates decision duties to the Secretary under the Social Security Act and therefore primarily affects three groups: the decision maker (the Department and Secretary), claimants whose social security means tests incorporate family law affected income streams (member and non‑member spouses), and the superannuation trustees and administrators that hold information required to apply the Schedule matters.

The Secretary and Departmental officers. The instrument prescribes what the Secretary must have regard to when making decisions under specific provisions of the Social Security Act (s 5). That places an administrative obligation on departmental decision makers to identify the income‑stream type, to gather and record the Schedule 1 matters relevant to that type, and to apply those matters in working out annual ordinary income or asset value under the cited Act provisions. The instrument therefore affects internal workflows, documentation and evidence‑collection practices within the Department.

Member spouse and non‑member spouse. People who are party to family law processes that split a superannuation income stream, or who receive FLA income streams after splitting, are affected because those streams will be treated in particular ways when the Department calculates income and assets for social security means tests. The instrument requires the Secretary to consider, for example, the amount payable to the member spouse immediately before the operative time (Schedule 1 item 4), the purchase price, deductible amount and related entitlements (items 5, 11, 12), and the amounts payable to primary and secondary FLA income streams (items 17-18). These are the facts and valuations that determine how the stream enters income and asset tests, and thus affect entitlement outcomes for claimants.

Superannuation trustees, administrators and funds. The Schedule requires a range of factual and valuation matters that will usually be documented by trustees and funds: commencement day, purchase price at commencement, relevant number, initial annual payment, indexation rate, residual capital value, deductible amount, asset values at particular dates, amounts of first splittable payment and proportions, and values determined by a court or provided by a trustee in base amount splits (Schedule 1 items 1-23). While the instrument does not itself impose statutory duties on trustees, in practice the Secretary will need to obtain this information from trustees, and trustees will incur administrative burden responding to Departmental requests. The instrument also ties to the SIS Regulations (asset value per regulation 3A.05) and the Family Law (Superannuation) Regulations 2025 definitions, so trustees must be able to provide data in those terms.

Courts and family law practitioners. The instrument cross‑references court determinations that can affect valuations the Secretary must have regard to (for example, Schedule 1 item 22(b)(i) , where a splitting order applies the value determined by the court). Court orders and the values they specify directly enter the Secretary’s decision record and affect the means test treatment of split income streams. Family law advisors therefore influence the documentation and valuation inputs that the Department must consider.

Other regulators. The instrument imports definitions and valuation concepts from the SIS Regulations and the Family Law (Superannuation) Regulations 2025 (s 4), so administrators working in superannuation regulatory compliance and trustees must reconcile those regimes when producing information the Department requires.

Administrative intermediaries. Professionals who prepare evidence for members and non‑member spouses (solicitors, accountants, actuaries) will be affected because Schedule 1 includes technical items such as purchase price, relevant number, deductible amount, residual capital value and asset values at historic dates (items 5-6, 11-13, 14-15). Where actuarial calculation or historical valuation is needed, advisers will be engaged.

In short, the instrument imposes obligations on the Secretary that translate into information requests and evidential requirements for claimants and trustees, affects the record keeping and valuation tasks of superannuation administrators and family law advisers, and attaches social security treatment to the outcomes of family law splitting mechanisms determined by courts or superannuation agreements.

Duties on the Secretary. The principal duty created by the instrument is the repeated statutory obligation that "the Secretary must have regard to the following matters" when making decisions under specified Social Security Act provisions. The applicable provisions are listed in the instrument’s purpose (s 5): paragraphs 1099DB(1)(a), 1099DB(1)(b), 1099DB(1)(c) (as inserted at ba), paragraphs 1099DC(1)(a) and 1099DC(1)(b), subsection 1099DCA(1), and subsections 1120A(2) and 1120A(3). Each Part specifies which Schedule 1 items apply to that category of FLA income stream and whether the income stream is defined benefit or otherwise (see Parts 2-6, ss 7-19). The Secretary must also consider "any other matter that the Secretary considers relevant in the circumstances" in each applicable provision, preserving administrative discretion to take additional matters into account.

Specificity of duty. The duty is one of consideration rather than a prescriptive computation. The instrument requires the Secretary to have regard to enumerated items (Schedule 1), to record that consideration, and to apply that consideration when "working out a person’s annual rate of ordinary income, or asset value" under the cited Act provisions (s 5). That framing requires credible evidentiary steps and reasoned decision‑making rather than an arbitrary response.

Obligation to treat multiple payment splits separately. Where payments are being made under more than one payment split, the duty to have regard applies to each relevant Schedule 1 matter for each split (see the repeated "If payments are being made ... under more than one payment split" clauses in ss 8(3), 9(3), 11(3), 12(3), 14(3), 15(3), 17(2) and 19(2)). This increases the Secretary’s procedural duty in complex splitting histories.

No duties imposed on trustees in the instrument. The instrument prescribes what the Secretary must consider; it does not itself create duties or obligations on superannuation trustees, funds or courts. That said, several Schedule 1 items explicitly rely on information that will usually originate from trustees or courts, for example court‑determined values in splitting orders (Schedule 1 item 22(b)(i)) or values provided by trustees for superannuation agreements (Schedule 1 item 22(b)(ii)). The instrument therefore creates practical interdependence between the Secretary and trustees, but does not itself lay down trustee obligations.

Rights, remedies and enforcement. The instrument does not create express rights for individuals nor specify enforcement mechanisms or penalties. Its purpose is procedural: to guide the Secretary’s decision‑making. The instrument does not, in its text, specify appeal or review routes. Any rights of review or merits/ judicial review will be governed by the Social Security Act and general administrative law principles, not by this instrument alone. The instrument does not itself create financial liabilities or sanctions.

Required evidentiary inputs. Schedule 1 enumerates factual and valuation inputs the Secretary must consider (items 1-25). These items operate as a checklist the Secretary must use to inform computations under the Social Security Act. Examples: commencement day (item 1), operative time (item 2), purchase price at commencement (item 5), initial annual payment (item 8), indexation rate (item 9), deductible amount and entitlements against it (items 11-12), asset values at historical points (items 14-15), amounts payable to member and non‑member spouses from primary and secondary FLA income streams (items 17-18), and special matters for percentage and base amount splits (items 20-22).

Discretion and residual matters. Each operative provision includes a residual clause permitting consideration of other relevant matters (for example, s 8(2)(b), s 9(2)(b), s 11(2)(b), s 12(2)(b), s 14(2)(b), s 15(2)(b), s 17(1)(b) and s 19(1)(b)). That preserves administrative flexibility to account for circumstances not exhaustively captured by Schedule 1.

In practical terms, the Secretary’s duty is to undertake a documented, itemised evaluation of the Schedule matters relevant to the income‑stream type and to do so separately for each payment split where applicable. The instrument allocates roles rather than creating new legal entitlements or penalties.

The instrument does not create criminal, civil or monetary penalties. It is an administrative instrument that prescribes decision‑making principles for the Secretary; it does not itself impose sanctioning mechanisms against individuals, trustees, funds or the Secretary. The only enforceable obligation contained in the instrument is the duty upon the Secretary to "have regard to" the enumerated matters when exercising the specified decision powers under the Social Security Act (s 5 and the Parts that follow). The instrument contains no penalty clauses, infringement notice mechanisms or directions imposing financial obligations on third parties.

Enforcement in practice will therefore operate as an internal administrative obligation and, where applicable, via the usual statutory review and judicial review avenues that apply to social security decisions under the Social Security Act and administrative law. The instrument itself does not specify those review paths. Because the instrument prescribes mandatory consideration of particular matters, a failure by the Secretary to have regard to the listed matters in an individual decision could be relied upon in merits review or judicial review proceedings, subject to the applicable review regimes in the Social Security Act and general administrative law. The instrument does not itself list those remedies or procedures.

There is no express provision for compliance enforcement vis‑à‑vis third parties such as trustees. Several Schedule matters depend on trustee or court data (for example, Schedule 1 item 22(b)(ii) , values provided by the trustee; Schedule 1 item 22(b)(i) , value determined by the court). The instrument does not compel trustees to supply information; it simply identifies the matters the Secretary must have regard to. In practice this creates operational dependencies: the Secretary will need to obtain the data from trustees and courts to be able to satisfy the "have regard" obligation. The instrument does not provide statutory powers of compulsion within its text to obtain that information.

Internal accountability. The instrument’s operative wording creates an internal accountability requirement for the Secretary to record consideration of the enumerated matters. Administrative review or judicial review may examine whether the Secretary properly considered those matters. The instrument itself does not provide standalone enforcement machinery; any challenge would proceed under the general review mechanisms for decisions made under the Social Security Act and under administrative law.

In short, the instrument establishes mandatory consideration duties for the Secretary but contains no separate penalty framework or enforcement provisions directed at private parties. It thereby relies on administrative processes and external review mechanisms outside the instrument to ensure compliance.

The instrument is heavily cross‑referential. Its operation hinges on interaction with the Social Security Act 1991 (the Act), the Family Law Act 1975 (Parts VIIIB and VIIIC), the Family Law (Superannuation) Regulations 2025, and the Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations). The instrument is expressly made under powers in the Act (s 3, citing s 1099DD and s 1120A(5)) and its purpose is to guide decisions under specific Act provisions (s 5).

Interaction with the Social Security Act. The instrument prescribes the matters to which the Secretary must have regard when making decisions under paragraphs 1099DB(1)(a)/(b)/(c), 1099DC(1)(a)/(b), subsection 1099DCA(1), and subsections 1120A(2)/(3) of the Act (s 5). Those sections in the Act are the decision points used to determine annual ordinary income and asset values for means testing. The instrument thus functions as a delegated decision‑making instrument under the Act: it specifies the set of matters that must inform the Secretary’s statutory exercise of those powers.

Interaction with family law regimes. The instrument relies on several family law concepts , payment split, percentage payment split, base amount payment split, superannuation agreement, flag lifting agreement, operative time, member and non‑member spouse, splitting order, RSA and reversionary beneficiary , all defined under Part VIIIB or Part VIIIC of the Family Law Act 1975 (s 4). The Schedule items require the Secretary to take into account values and timings created by family law processes (for example, the operative time for the payment split under the superannuation agreement, flag lifting agreement or court order, Schedule 1 item 2). When courts or parties produce splitting orders, or trustees produce values under superannuation agreements, those outputs become inputs into the Secretary’s social security decisions. The instrument therefore operationalises the consequences of family law splitting transactions for social security means tests.

Interaction with Family Law (Superannuation) Regulations 2025. The instrument imports the meanings of "allocated pension", "market linked pension", "base amount allocated to the non‑member spouse", and "purchase price" from the Family Law (Superannuation) Regulations 2025 (see s 4). This means the Secretary’s decision‑making under this instrument will be carried out using definitions and valuation conventions that are established in the family law superannuation regulations, ensuring terminology alignment across family law and social security treatments.

Interaction with SIS Regulations. The instrument takes the meaning of "asset value" from regulation 3A.05 of the SIS Regulations (s 4). Where Schedule 1 requires consideration of the "asset value" of an income stream immediately before the operative time or before the first splittable payment (Schedule 1 items 14-15), the Secretary is directed to apply that SIS Regulations definition. That ties the Department’s valuation to superannuation prudential concepts.

Interaction with sections 1120AA and 1120AB of the Act. The instrument’s s 4 note states that the definitions of assessment day, purchase amount and threshold day adopt formula and calculation methods in ss 1120AA and 1120AB of the Act "for the purpose of defining terms as they are used in this instrument," but expressly notes that ss 1120AA and 1120AB "do not apply to family law affected income streams." This is a nuanced textual interaction: the instrument borrows calculation methodology from those Act sections to define certain terms for its own purposes, while simultaneously disapplying the substantive operation of those sections to FLA income streams. Practitioners must note this divide: the instrument uses the computational method but says the underlying Act sections do not apply, potentially creating interpretative complexity in applying those formulae when assessing FLA income streams.

Treatment of court determinations and trustee valuations. Schedule 1 explicitly accommodates court values and trustee figures. For example, in a base amount payment split the value of the superannuation interest is either "the value determined by the court" if a splitting order applies, or "the value provided by the trustee" if a superannuation agreement applies (Schedule 1 item 22(b)). Similarly, item 23 contemplates creation of a new interest, rollovers or transfers and requires comparisons between amounts that would have been payable to the member spouse absent the creation or transfer and amounts actually payable after the creation/transfer. Thus the instrument links social security valuation to outputs from family law determinations and trustee documentation.

Effect on concurrent regimes. Because the instrument aligns the Secretary’s valuation matters with family law and superannuation regulatory conventions, it reduces the risk of mismatched terminology across regimes, but increases reliance on cross‑agency or inter‑parties data flow. The instrument itself does not alter family law entitlements; it only governs how those entitlements and mechanical splits feed into social security assessments. The practical consequence is that family law outcomes (court determinations, splitting orders, trustee valuations and superannuation agreements) become direct inputs into social security calculations.

In short, the instrument sits within a web of family law and superannuation regulation: it takes definitional and valuation methods from family law and SIS rules, applies them as a decision checklist for the Secretary under the Social Security Act, and requires the Secretary to have regard to court and trustee values where those exist.

The instrument as provided is the Social Security (Family Law Affected Income Streams) Principles 2022. The text contains a section headed "Schedules" (s 6) which states: "Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms." That sets a mechanism by which this instrument can amend or repeal other instruments via its own schedules. The document as provided, however, contains no populated Schedule that amends or repeals named instruments; the Schedule included in the instrument is Schedule 1, which lists matters to which the Secretary must have regard. No textual amendment list, history of prior versions, dates of commencement or subsequent modifications appear within the provided text.

The instrument is made under ss 1099DD and 1120A(5) of the Social Security Act (s 3). The name and the authority clauses appear twice in the provided text, including duplicated sections; the duplication appears to be repetition in the source extract rather than textual amendment history. The instrument references the Family Law (Superannuation) Regulations 2025 for several defined terms (s 4) and the SIS Regulations for asset value (s 4), indicating that changes in those instruments could change the operational meaning of terms used here. But the instrument itself contains no amendments to other instruments within the provided extract and does not record past amendments made to it.

Practically, the instrument’s provisions are sensitive to updates in the external instruments it references. For example, if the Family Law (Superannuation) Regulations are amended, the meanings of "allocated pension", "market linked pension", "purchase price" or "base amount allocated to the non‑member spouse" that are imported into this instrument would change accordingly. The instrument does not include transitional or savings clauses in the text provided to deal with changes in those external instruments.

Summary of amendment mechanics observed in the text:

• the instrument is capable of amending other instruments via items in its Schedules (s 6), but no such amendments appear in the provided text;
• the instrument imports definitions from other instruments that may be amended independently; those external amendments will affect how the instrument operates in practice;
• the text as provided contains no historical amendment entries, commencement dates, or enumerated amending instruments.

If you require a reform chronology, commencement dates, or a consolidated version showing later amendments, the instrument as given does not provide that information; obtaining the instrument’s parliamentary or Gazette record, or consolidated legislative history in the authorised legislative database, will be necessary to compile an amendment history beyond what is contained in this text.

The provided instrument text contains no references to judicial decisions, litigation, or precedent. It does not cite any cases and does not record any litigation that interprets or challenges the instrument. The Schedule and Parts list matters for administrative consideration only; there is no litigation history recorded in the instrument itself.

Because the instrument guides the Secretary’s decision‑making under sections of the Social Security Act, any litigation that would concern the instrument would likely arise in challenges to decisions of the Department made using these principles. Such challenges could be judicial review for jurisdictional error, or merits review where Social Security Act review mechanisms permit. However, the instrument does not provide a register of such challenges, nor does it include reported judicial interpretations in its text.

If a practitioner needs to know whether courts have interpreted the operation of "must have regard to" in this instrument or how Schedule 1 items have been applied in contested decisions, the instrument as provided does not contain that information. Locating litigation that engages these principles will require searching judicial databases for challenges to Social Security Act decisions where family law affected income streams and these provisions were in issue. The instrument itself offers no litigation history.

Several practical and interpretive pitfalls arise directly from the instrument’s structure and cross‑references. Below are concrete "watch out" points grounded in the instrument text.

1. Must have regard to different items depending on income‑stream class and defined benefit status. The Schedule matters to be considered differ across Parts and between defined benefit and non‑defined benefit streams. For example, for asset‑test exempt income streams the Secretary must have regard to Schedule items 1-10 and 14-23 for non‑defined benefit streams (s 8(2)(a)), but for defined benefit streams the Secretary must have regard to items 1-12 and 14-23 (s 9(2)(a)). For asset‑tested long term non‑defined benefit streams the Secretary must have regard to items 1-10 and 13-23 (s 11(2)(a)). For lifetime asset‑tested streams the Secretary must have regard to items 1-4 and 14-23 (s 17(1)(a)), and for asset value of lifetime streams additionally items 24-25 may apply (s 19(1)(a)). Practitioners must correctly identify which Part and subsection apply; otherwise they risk failing to produce or obtain required items.

2. "Must have regard to" is an obligation to consider, not a prescriptive formula. The instrument requires consideration, but does not prescribe how to weight or compute outcomes from the matters listed. Decisions that do not document consideration of each relevant Schedule item may be vulnerable to review. The Secretary also retains a residual discretion to consider other relevant matters (e.g. "any other matter that the Secretary considers relevant in the circumstances"). Record keeping of the reasoning trail is essential.

3. Multiple payment splits multiply the work. Each Part includes a clause obliging the Secretary to have regard to each relevant matter in relation to each payment split where more than one payment split exists (see e.g. s 8(3), s 9(3) etc.). Where multiple family law transactions have affected an income stream at different times, the Secretary must treat each split as a separate node for the Schedule checklist, increasing evidentiary and computational complexity.

4. Reliance on trustee and court data without statutory compulsion in this instrument. Schedule 1 requires values that will usually only be available from trustees or courts (items 22(b)(i) and (ii), item 23). The instrument does not create duties on trustees to provide those values; the Secretary will need to obtain them through existing information‑gathering powers or cooperation. Practitioners should plan for possible delays or disputes over trustee valuations and court determinations.

5. Historic valuations and asset values at specific times. Schedule 1 repeatedly requires values "immediately before" operative times or splittable payments (items 14-16, 15). Procuring accurate historical asset values and purchase prices at commencement day (item 5) or initial annual payments (item 8) may require actuarial work or archived trustee statements. The instrument imports "asset value" from regulation 3A.05 of the SIS Regulations (s 4), so correct application depends on knowing that regulation’s method.

6. The 1120AA/1120AB formula note. The instrument’s s 4 note states the definitions of assessment day, purchase amount and threshold day adopt formula and calculation methods in ss 1120AA and 1120AB of the Act "for the purpose of defining terms as they are used in this instrument," while also stating those Act sections do not apply to FLA income streams. This duality can cause confusion: the Secretary must apply the calculation methods embodied in those sections for definition purposes without treating the full operation of those sections as applying to FLA streams. Practitioners should explicitly document which formulae were used and why those Act sections are treated as non‑applicable except for definition adoption.

7. Complexity for base amount payment splits and allocated/market linked pensions. Item 22 is long and prescriptive: it requires the value of the base amount allocated to the non‑member spouse, the value of the superannuation interest (court value or trustee value), details of income paid between operative time and first splittable payment, amounts and proportions of first splittable payments, subsequent payments, lump sum payments and allocations between primary and secondary FLA income streams, and particular values where the stream is paid as an allocated or market linked pension. These granular requirements mean that base amount splits and allocated/market linked pensions will often require multiple trustee data points and potentially actuarial valuation.

8. Commutation and creation of new interests. Items 19 and 23 require the Secretary to consider total commuted amounts and to compare amounts payable before and after the creation of new interests or rollovers/transfers to other funds. Where commutations or rollovers have occurred, establishing "what would have been payable" absent the creation or transfer can be challenging and requires counterfactual valuation.

9. Assessment day and threshold day mechanics. Items 24-25 bring in the member spouse’s and non‑member spouse’s assessment day and threshold day statuses. Item 25 changes which matters to consider if the member spouse has not reached an assessment day in relation to the original family law affected income stream. Properly determining whether a party has reached these statutory days, using the instrument’s adopted formulae, is a necessary precondition to applying other items.

10. No penalty or enforcement mechanism where trustees fail to cooperate. Because the instrument does not create a statutory duty on trustees to provide the required information, delays or disputes with trustees are likely practical "gotchas" that can delay Departmental decisions. Practitioners should anticipate the need to rely on existing Departmental information powers or court processes to secure data.

Practitioners and administrators should therefore build processes that: (a) correctly identify which Part and which Schedule items apply to the income stream at issue; (b) establish a checklist to obtain trustee and court data for each item; (c) record the Secretary’s consideration of each relevant item; and (d) plan for extra work where multiple payment splits, base amount splits, commutations, or rollovers occur.

For departmental decision‑makers, superannuation trustees, family law practitioners and advisers preparing clients for social security assessments, the instrument requires an operational compliance process that ensures all relevant Schedule 1 matters are identified, evidenced and considered. Below is a concrete compliance roadmap tied to the instrument’s sections and Schedule items.

1. Identify the income‑stream category and defined benefit status.

   • Determine whether the FLA income stream is an asset‑test exempt income stream (Part 2, s 7), an asset‑tested income stream (long term) (Part 3, s 10), an asset‑tested income stream (short term) as within Part 4 (s 13), or an asset‑tested income stream (lifetime) (Parts 5-6, ss 16 and 18).
   • Determine whether the stream is a defined benefit income stream or a military invalidity pension (see ss 8-9A, 11-12, 14-15, 17-19). The applicable Part and subsection specify which Schedule items apply.

2. Map the relevant Schedule items to the decision being made.

   • Using the mappings in the instrument, list which Schedule 1 items apply (for example, s 8(2)(a) for non‑defined benefit asset‑test exempt streams requires items 1-10 and 14-23). Build a checklist referencing both the Part/subsection and each Schedule item number.

3. Gather documentary evidence from trustees, courts and parties.

   • For each Schedule item, identify the primary documentary source. Examples:
     • commencement day (Schedule 1 item 1): trustee commencement documentation;
     • operative time for the payment split (item 2): operative clause in the splitting order or superannuation agreement;
     • purchase price at commencement (item 5), relevant number (item 6), initial annual payment and indexation rate (items 8-9): trustee valuation statements, fund purchase documents or actuarial reports;
     • deductible amount and entitlement splits (items 11-12): trustee documentation and splitting order or agreement records;
     • asset values immediately before operative time and before first splittable payment (items 14-15): trustee statements or historic fund unit prices;
     • base amount split details (item 22): court order values or trustee declared values and records of first splittable payments and subsequent payments;
     • rollovers, transfers or new interest creation (item 23): rollover documentation, transfer receipts, transfer valuations.
   • If trustees are the primary source, request structured data in the terms of the Schedule items: dates, amounts, valuations and the method used to produce asset values (noting SIS regulation references).

4. Apply the adopted formulae where necessary, and document method choices.

   • Where the instrument adopts formula and calculation methods from ss 1120AA and 1120AB for defining assessment day, purchase amount and threshold day (s 4 Note), use those formulae to calculate assessment day/purchase amount/threshold day for the purposes of applying Schedule items. Explicitly document that the calculation method from those sections was used and that ss 1120AA and 1120AB do not otherwise apply to FLA income streams, as the instrument requires.

5. Treat multiple payment splits separately.

   • For income streams subject to more than one payment split, repeat the Schedule checklist for each split and record consideration and data for each split separately (see ss 8(3), 9(3), 11(3), 12(3), 14(3), 15(3), 17(2), 19(2)). Where splits occurred at different times, ensure historic asset values and payment records are gathered for each split.

6. Address base amount splits, percentage splits, commutations, new interests and rollovers with special care.

   • For percentage splits, capture the percentage and the amount of first splittable payment (Schedule 1 items 20-21).
   • For base amount payment splits, secure court values or trustee values for superannuation interests and record detailed payment histories between operative time and first splittable payment, proportions paid to member and non‑member spouses and subsequent payments (Schedule 1 item 22). Where the stream is an allocated pension or market linked pension, record the pre‑ and post‑split values per item 22(h).
   • For commutations and the creation of new interests or transfers, document the total commuted amount and perform the "with and without" comparison in item 23.

7. Record indexation, deductible amounts, residual capital values and reversionary beneficiary data.

   • Capture indexation rate (item 9), deductible amounts and the entitlement splits for deductible amounts (items 11-12), residual capital value (item 13) and reversionary beneficiary or reversionary partner details (item 10). These inputs affect the income and asset computations.

8. Keep a documented decision trail.

   • For each decision, document the Schedule items considered, the evidence relied upon, the calculations performed, any other matter taken into account, and the department officer responsible. The instrument’s repeated "must have regard to" requirement will be satisfied by an auditable decision file that records how each relevant Schedule item influenced the outcome.

9. Anticipate and manage trustee cooperation issues.

   • Since the instrument does not impose duties on trustees, anticipate delays and prepare standard information requests to trustees. If trustees provide values using different conventions, document the valuation method used and reconcile it with SIS regulation 3A.05 if "asset value" is required.

10. For practitioners advising clients, assemble or instruct trustees/actuaries early.

• Family law advisers should obtain the trustee valuations, statements of purchase price, purchase amount and other Schedule items at the time of a splitting order or superannuation agreement. If the client anticipates a social security means test, obtain the Schedule items proactively to avoid delays.

11. Use a compliance checklist and workflow templates.

• Implement a template checklist mapping instrument Parts/ subsections to Schedule items and to supporting documents. Include fields for: income stream type, defined benefit status, payment split type, operative time, trustee documents, court values, history of payments, commutation events, rollovers, assessment day/threshold day calculations and final reasoning.

12. Quality control and internal training.

• Provide training for decision‑makers on the differences between income‑stream classes, the implications of defined benefit status, the specifics of items 22 and 23 for base amount splits and new interest creation, and the proper use of the 1120AA/1120AB calculation methods for definition purposes.

By following the above steps, decision makers and advisers can ensure the Secretary’s statutory obligation to "have regard to" the matters in Schedule 1 is satisfied, and that adequate evidence and reasoning are on file to support the social security income and asset determinations that flow from family law affected income stream transactions.