This Regulation replaces the prior Superannuation Regulation and sets the mechanical rules by which STC adjusts, reduces or reallocates State superannuation benefits in specified situations: early release of benefits, missing tax file numbers / no‑TFN tax, family law payment splits, and Commonwealth surcharge assessments. It prescribes valuation methods, notice and timing obligations, debt accounts, commutation powers and limited reimbursement rules. It affects contributors, former contributors, pensioners and non‑contributor spouses, and matters because it determines who pays, when payments shift, and the administrative and actuarial choices STC must make.
This Regulation (the Superannuation Regulation 2022) sets out procedural and valuation rules, notice obligations, and operational discretions that give effect to specified provisions of the Superannuation Act 1916 (the Act) and relevant Commonwealth family law and taxation instruments. It commenced on publication on the NSW legislation website and repeals and replaces the Superannuation Regulation 2016, with transitional saving (see commencement note and s 21). The Regulation prescribes how State-controlled decisions are implemented in areas including reduction of benefits for surcharge, no-TFN tax and early release, the treatment of family law payment splits and associated valuations and notices, creation and management of debt accounts, and limited rules about reimbursement and payment to the Commissioner of Taxation (see Parts 2, 3 and 4).
Mechanically the instrument:
Defines terms used in the Regulation and links to Commonwealth law and other instruments for certain valuation methods and operative time concepts (s 3; s 11).
Authorises the creation of a debt account in the Fund for surcharge, no-TFN tax and early release liabilities and prescribes how that account affects future benefit payments (s 5(3)-(5); s 9(2)-(3); s 10).
Sets out the process for reducing benefits where an early release benefit has been paid, including calculating reductions, interest on debt accounts and the ability to commute pensions for payment (s 5, s 7).
Prescribes a mechanism for a former contributor to request an adjustment to benefits to meet post-payment surcharge assessments and to have amounts paid to the Commissioner or reimbursed (s 8; s 18).
Provides family law provisions on valuation, timing and content of notices to contributor and non-contributor spouse, nomination and default of rollover destination, time limits for responses and transfer/rollover periods, and the method for calculating reduced benefits where a family law superannuation entitlement has been paid, released, transferred or rolled over (Part 3, especially ss 11-16).
Current sections
Direct links to the current provisions in Superannuation Regulation 2022.
additional surcharge amount means the amount of superannuation contributions surcharge assessed to be payable by a post-payment surcharge assessment notice.
approved valuation method, for Part 3—see section 11.
contributor—
(a) for Part 3—see section 11, and
(b) otherwise—has the same meaning as in the Act.
Commissioner of Taxation means the person holding office for the time being as the Commissioner of Taxation under a law of the Commonwealth.
deferred benefit, for Part 3—see section 11.
post-payment surcharge assessment notice means a notice that—
(b) is received on or after 25 June 2004 by the former contributor after a benefit has commenced to be paid, or has been paid, to the former contributor.
surcharge debt account has the same meaning as in the Act, section 61RA.
surcharge deduction cap, in relation to a former contributor, means the maximum surcharge deduction amount that may be determined by STC under the Act, section 61RA(1C) in relation to a benefit payable to the former contributor.
total surcharge amount, in relation to a former contributor, means the sum of—
(a) the total amount of superannuation contributions surcharge that has been assessed to be payable in relation to employer contributions paid to the Fund on the contributor’s behalf up to and including the date on which the former contributor receives a post-payment surcharge assessment notice, and
(b) the amount, if any, of general interest charged in relation to the additional surcharge amount payable under the notice, and
(c) the amount of interest, if any, payable in relation to the surcharge debt account kept in relation to the former contributor.
Note—
The Act and the Interpretation Act 1987 contain definitions and other provisions that affect the interpretation and application of this Regulation.
Part 2
Reduction of benefits
Part 2 Reduction of benefits
Part 2 Reduction of benefits
Division 1
General
Division 1 General
Division 1 General
4
Application of Division
4 Application of Division
4 Application of Division
The benefits under the following provisions of the Act may be the subject of a reduction under this Division—
(a) section 27,
(b) section 28A,
(c) section 28AA,
(d) section 29,
(e) section 30,
(f) section 37,
(g) section 37A,
(h) section 37B,
(i) section 38A,
(j) section 47D,
(k) Part 4, Division 3A,
(l) Part 4, Division 3B,
(m) Part 4, Division 3D.
5
Reductions relating to early release of benefit—the Act, s 61RH
5 Reductions relating to early release of benefit—the Act, s 61RH
5 Reductions relating to early release of benefit—the Act, s 61RH
(1) This section applies to the reduction of benefits payable to, or in relation to, a contributor or former contributor to whom a benefit (an early release benefit) has been released under—
(a) section 61RF, or
(b) section 61RG.
(2) If an early release benefit is released to a former contributor who has provided for a benefit under the Act, Part 4, Division 3A or 3B, or had a benefit preserved under the Act—
(a) STC must, on and from the date of release—
(i) calculate the amount of the benefit provided for or preserved, for both a pension and lump sum, and
(ii) reduce the amount of the benefit provided for or preserved by the amount of the early release benefit, and
(b) when the benefit provided for or preserved is payable, the amount of the benefit must be reduced by the amount of the early release benefit.
(3) If subsection (2) does not apply, STC must—
(a) create a debt account in the Fund in relation to the contributor, and
(b) when a benefit is payable, reduce the benefit that is payable by the amount debited to the debt account at the time the benefit is payable.
(4) Despite subsection (3), if a benefit is deferred or preserved under the Act after the release of an early release benefit and before a benefit is otherwise payable to the contributor—
(a) STC must, on and from the date the benefit is deferred or preserved—
(i) calculate the amount of benefit deferred or preserved, for both a pension and lump sum, and
(ii) reduce the amount of the benefit deferred or preserved by the amount debited to the debt account at the time the benefit is deferred or preserved, and
(b) when the deferred or preserved benefit is payable, the amount of the benefit must be reduced by the amount debited to the debt account at the time the benefit was deferred or preserved.
(5) For subsections (3) and (4), the amount debited to the debt account must be the sum of—
(a) the amount of all early release benefits released to the contributor, and
(b) interest on the amount at a rate determined by STC.
(6) STC may obtain actuarial advice for the purpose of determining the amount of a reduced benefit.
(7) For subsections (2) and (4), STC may determine which component or components of a benefit are to be reduced.
(8) To avoid doubt, this section does not apply to reduce an early release benefit payable under the Act, section 61RF or 61RG.
6
Consent to reduction relating to early release of benefit—the Act, s 61RH(2)(b)
6 Consent to reduction relating to early release of benefit—the Act, s 61RH(2)(b)
6 Consent to reduction relating to early release of benefit—the Act, s 61RH(2)(b)
Before releasing a benefit under the Act, section 61RF or 61RG, STC must obtain the written consent of the contributor or former contributor to the reduction of future benefits as a consequence of the early release.
7
Commutation of pensions for reduction relating to early release of benefit—the Act, s 61RH
7 Commutation of pensions for reduction relating to early release of benefit—the Act, s 61RH
7 Commutation of pensions for reduction relating to early release of benefit—the Act, s 61RH
(1) This section applies if a benefit that is to be reduced under section 5 may be taken in the form of a pension.
(2) STC may, at its discretion and with the consent of the person to whom the pension is payable, commute part of the pension to a lump sum for the purposes of the payment to STC of the amount of the reduction.
(3) Commutation of part of the pension—
(a) does not affect other rights that the person has to commute the pension under the Act, and
(b) must not be taken into account for the purpose of determining whether, and to what extent, another right may be exercised, and
(c) must be done on a basis determined by STC.
(4) STC may obtain actuarial advice for the purpose of determining the basis on which part of a pension is to be commuted under this section.
8
Reduction for superannuation contributions surcharge—the Act, s 61RA(5)
8 Reduction for superannuation contributions surcharge—the Act, s 61RA(5)
8 Reduction for superannuation contributions surcharge—the Act, s 61RA(5)
(1) STC may, at the request of a former contributor—
(a) adjust the amount of a benefit payable to the former contributor by reducing the benefit by an amount (the reduction amount) that is equivalent to the lesser of—
(i) the additional surcharge amount, and
(ii) an amount, not being less than nil, equal to the amount of the surcharge deduction cap less any previously met surcharge liability, and
(b) pay an amount equal to the reduction amount to the former contributor or the Commissioner of Taxation.
(2) The previously met surcharge liability is the sum of—
(a) all amounts paid by the former contributor to STC or the Commissioner of Taxation in relation to the total surcharge amount of the former contributor, and
(b) all amounts in relation to which adjustments relating to the benefit of the former contributor have previously been made under this section or the Act in relation to the superannuation contributions surcharge.
(3) STC may, for the purposes of determining an adjustment under this section, obtain—
(a) actuarial advice, or
(b) other advice, as STC thinks fit.
(4) This section does not authorise STC to pay an amount that would result in payments made to or on behalf of the former contributor being greater than the total benefits to which the former contributor is entitled.
(5) This section does not authorise STC to pay an amount of general interest charged in relation to an additional surcharge amount payable under a post-payment surcharge assessment notice unless—
(a) the request for the payment is made by the former contributor, and
(b) the request is made within a reasonable period after receiving the notice, as determined by STC.
Note—
Sections 18 and 19 also relate to the superannuation contributions surcharge.
Division 2
Reductions relating to no-TFN tax—the Act, s 61RC(1)(d) and (5)
Division 2 Reductions relating to no-TFN tax—the Act, s 61RC(1)(d) and (5)
Division 2 Reductions relating to no-TFN tax—the Act, s 61RC(1)(d) and (5)
9
Benefit reductions relating to no-TFN tax
9 Benefit reductions relating to no-TFN tax
9 Benefit reductions relating to no-TFN tax
(1) For the Act, section 61RC(1)(d), the benefits provided under the following provisions of the Act are prescribed—
(a) section 27,
(b) section 28A,
(c) section 28AA,
(d) section 29,
(e) section 30,
(f) section 37,
(g) section 37A,
(h) section 37B,
(i) section 38A,
(j) section 47D,
(k) Part 4, Division 3A,
(l) Part 4, Division 3B,
(m) Part 4, Division 3D.
(2) STC must create a debt account in the Fund in relation to each contributor or former contributor in relation to whom a benefit is liable to be reduced under the Act, section 61RC.
(3) STC must have regard to the debt account when determining the amount of the reduced benefit.
Note—
Under the Act, section 61RC(3), the amount of the reduced benefit is to be determined by STC after obtaining actuarial advice.
10
Provision of information
10 Provision of information
10 Provision of information
STC must at least once a year—
(a) provide each contributor and former contributor with a statement as to the balance of the debt account created by STC in relation to the contributor or former contributor, and
(b) if a tax file number has not been previously provided to STC for a contributor or former contributor—request that the contributor or former contributor provide a tax file number to STC.
deferred benefit means a benefit under the Act, section 37B.
(2) Words and expressions used in this Part have the same meaning as they have in the Act, Part 4A.
12
Valuation of superannuation interests—the Act, s 61WD(h)
12 Valuation of superannuation interests—the Act, s 61WD(h)
12 Valuation of superannuation interests—the Act, s 61WD(h)
(1) This section applies for the purposes of—
(a) the Act, Part 4A, and
(b) the family law superannuation legislation.
(2) The value of a contributor spouse’s superannuation interest, other than in relation to a deferred benefit, must be determined in accordance with the approved valuation method.
(3) The value of a superannuation interest relating to a deferred benefit must be determined in accordance with the Family Law (Superannuation) Regulations 2001 of the Commonwealth, Schedule 2, Part 7.
13
Notice to contributor and non-contributor spouse when entitlement becomes payable—the Act, ss 61WB(5) and 61WD(a), (b), (e)
13 Notice to contributor and non-contributor spouse when entitlement becomes payable—the Act, ss 61WB(5) and 61WD(a), (b), (e)
13 Notice to contributor and non-contributor spouse when entitlement becomes payable—the Act, ss 61WB(5) and 61WD(a), (b), (e)
(1) If the superannuation interest of a contributor becomes subject to a payment split, STC must provide written notice of that fact to the following—
(a) the contributor,
(b) the non-contributor spouse.
(2) 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, or
(b) for a payment split under a splitting order—within 28 days after the later of the following—
(i) the operative time for the payment split,
(ii) STC’s receipt of a copy of the splitting order.
(3) The notice given to the contributor must specify—
(a) the estimated amount of the family law superannuation entitlement of the non-contributor spouse and how it was calculated, and
(b) the period within which payment of the entitlement must be made, and
(c) the estimated effect of the payment on the entitlement of the contributor under the State Superannuation Scheme established under the Act.
(4) The notice given to the non-contributor spouse must—
(a) specify the estimated amount of the family law superannuation entitlement of the non-contributor spouse and how it was calculated, and
(b) specify the circumstances in which the amount—
(i) may be paid or released to the non-contributor spouse, or
(ii) must be transferred or rolled over to a complying superannuation fund or an RSA, and
(c) require the non-contributor spouse to, within 60 days of the notice being given—
(i) if the non-contributor spouse meets a circumstance for payment or release—provide details as to the required method of payment, or
(ii) if the non-contributor spouse does not meet a circumstance for payment or release—nominate a complying superannuation fund or an RSA to which the amount is to be paid, and
(d) specify that the amount will be credited to the Aware Super Fund if, within the 60 day period—
(i) the details are not provided, or
(ii) the nomination is not made.
(5) For the Act, section 61WB(5)(a) and (b), the prescribed period is 60 days after notice is given under this section.
(6) STC is not required to give the notice if the superannuation interest ceases to be subject to a payment split within the notice period specified in subsection (2).
(7) In this section—
operative time has the same meaning as in the Family Law Act 1975 of the Commonwealth, Part VIIIB.
14
Payment of family law superannuation entitlements—the Act, s 61WD(a), (b) and (f)
14 Payment of family law superannuation entitlements—the Act, s 61WD(a), (b) and (f)
14 Payment of family law superannuation entitlements—the Act, s 61WD(a), (b) and (f)
(1) If the amount of a family law superannuation entitlement is to be paid or released to a non-contributor spouse, the amount must be paid or released by STC when, or as soon as practicable after, the details referred to in section 13(4)(c)(i) are received.
(2) If the amount of a family law superannuation entitlement is to be transferred or rolled over, the amount must be transferred or rolled over—
(a) to a complying superannuation fund or an RSA nominated by the non-contributor spouse within 30 days of the nomination being made, or
(b) if no nomination is made within the 60 day period referred to in section 13(5)—to the Aware Super Fund within 30 days of the end of the period.
(3) STC must give to the contributor, within 28 days after an amount of family law superannuation entitlement is paid, released, transferred or rolled over, a written notice stating—
(a) that the amount has been paid, released, transferred or rolled over, and
(b) the amount paid, released, transferred or rolled over and how it was calculated, and
(c) the estimated effect of that action on the benefit of the contributor.
(4) STC must give to the non-contributor spouse, within 28 days after an amount of family law superannuation entitlement is paid, released, transferred or rolled over, a written notice stating—
(a) that the amount has been paid, released, transferred or rolled over, and
(b) the amount paid, released, transferred or rolled over and how it was calculated, and
(c) if the amount was transferred or rolled over—the name and contact details of the superannuation fund or RSA to which the amount was transferred or rolled over.
Note—
Under the Family Law (Superannuation) Regulations 2001 of the Commonwealth, regulation 59, STC may charge reasonable fees in relation to payment splits, payment flags, flag lifting and other related matters. The fees are generally payable in equal parts by the contributor and the non-contributor spouse.
15
Reduction of benefits of contributors—the Act, s 61WD(j)
15 Reduction of benefits of contributors—the Act, s 61WD(j)
15 Reduction of benefits of contributors—the Act, s 61WD(j)
(1) This section applies if the amount of the family law superannuation entitlement of a non-contributor spouse is paid, released, transferred or rolled over under the Act, Part 4A.
(2) Subject to subsection (3), a benefit payable to the contributor, including a benefit transferred under the Act, must be reduced in accordance with this section at the time it is paid to the contributor or transferred.
(3) If the benefit is a deferred benefit, the deferred benefit must be reduced in accordance with this section—
(a) if the election to take the benefit was made before the superannuation entitlement of the non-contributor spouse was paid, released, transferred or rolled over—at the time the entitlement is paid, released, transferred or rolled over, or
(b) otherwise—when the election to take the benefit takes effect.
(4) The amount of the reduced benefit must be calculated as follows—
where—
r is the amount of the reduced benefit.
v is the amount of the benefit that would have been payable to the contributor if the family law superannuation payment had not been made.
A is the ratio of the amount paid in relation to the non-contributor spouse to the value of the benefit of the contributor when the payment split occurred.
C is the ratio of the benefit accrual when the payment split occurred to the benefit accrual when the benefit is payable or deferred or transferred, as the case requires.
(5) If family law superannuation payments are made in relation to more than one spouse of the contributor, the amount of the reduced benefit, other than a deferred benefit, must be calculated by applying to the amount of the reduced benefit payable under subsection (4), the reduction factor for each family law superannuation payment.
(6) Each reduction factor must be calculated as follows—
where—
f is the reduction factor.
A and C have the same meaning as in subsection (4).
(7) In this section—
benefit accrual, at a particular point in time, means the benefit accrual at that time as determined by STC on actuarial advice.
value of a benefit means the value of the benefit as determined by STC on actuarial advice.
16
Effect of benefit reductions on pensions and other benefits—the Act, s 61WD(j) and (k)
16 Effect of benefit reductions on pensions and other benefits—the Act, s 61WD(j) and (k)
16 Effect of benefit reductions on pensions and other benefits—the Act, s 61WD(j) and (k)
(1) STC may commute part of a pension payable to a contributor for the purposes of payment of the family law superannuation entitlement of a non-contributor spouse.
(2) If STC commutes part of a pension, the amount of the pension must be reduced in accordance with section 15.
(3) A benefit payable under the Act to a person on the death of a contributor whose benefit has been, or is to be, reduced as a result of a family law superannuation payment must be based on the amount of the benefit as so reduced.
(4) Nothing in this Part affects other rights of a contributor or other person to commute a pension or part of a pension under the Act.
17
Apportionment of benefits between reserves—the Act, s 33B(2A)
17 Apportionment of benefits between reserves—the Act, s 33B(2A)
17 Apportionment of benefits between reserves—the Act, s 33B(2A)
For the Act, section 33B(2A), the portion of a payment to be made from the contributors’ reserve and the portion to be made from the employers’ reserve must be determined by STC on actuarial advice.
Part 4
Miscellaneous
Part 4 Miscellaneous
Part 4 Miscellaneous
18
Payment by STC in relation to post-payment surcharge assessment notice received by former contributor—the Act, s 61RA(6) and (7)
18 Payment by STC in relation to post-payment surcharge assessment notice received by former contributor—the Act, s 61RA(6) and (7)
18 Payment by STC in relation to post-payment surcharge assessment notice received by former contributor—the Act, s 61RA(6) and (7)
(1) If the total surcharge amount in relation to a former contributor who has paid an additional surcharge amount to the Commissioner of Taxation is greater than the surcharge deduction cap, STC may reimburse the former contributor by paying to the former contributor an amount equal to the following—
(a) the amount by which the total surcharge amount is greater than the surcharge deduction cap, less
(b) the amount, if any, previously reimbursed to or paid in relation to the former contributor by STC under this section or the Act for the purposes of superannuation contributions surcharge.
(2) STC may, at the request of a former contributor who has received a post-payment surcharge assessment notice in relation to an additional surcharge amount that would, if paid, result in, or that has resulted in, the total surcharge amount being greater than the surcharge deduction cap, pay to the Commissioner of Taxation on behalf of the former contributor an amount equal to the following—
(a) the amount by which the total surcharge amount is greater than the surcharge deduction cap, less
(b) the amount, if any, previously reimbursed to, or paid in relation to, the former contributor by STC under this section or the Act for the purposes of superannuation contributions surcharge.
(3) This section does not authorise STC to pay an amount of general interest charged in relation to an additional surcharge amount payable under a post-payment surcharge assessment notice unless—
(a) the request for the payment is made by the former contributor, and
(b) the request is made within a reasonable period after receiving the notice, as determined by STC.
Note—
Section 8 provides for further reduction of certain benefits resulting from the liability of a former contributor for superannuation contributions surcharge.
19
Maximum surcharge deduction amount—the Act, s 61RA(1C)(b)
19 Maximum surcharge deduction amount—the Act, s 61RA(1C)(b)
19 Maximum surcharge deduction amount—the Act, s 61RA(1C)(b)
For the Act, section 61RA(1C)(b), the surcharge deduction amount determined by STC must not be greater than the sum of the following—
(a) an amount that is 15% of the employer-financed portion of the part of the benefit payable to the contributor or former contributor that accrued—
(i) after 20 August 1996, and
(ii) before 1 July 2003,
(b) an amount that is 14.5% of the employer-financed portion of the part of the benefit payable to the contributor or former contributor that accrued—
(i) on or after 1 July 2003, and
(ii) before 1 July 2004,
(c) an amount that is 12.5% of the employer-financed portion of the part of the benefit payable to the contributor or former contributor that accrued—
(i) on or after 1 July 2004, and
(ii) before 1 July 2005.
20
Cancellation of breakdown pension at direction of pensioner—the Act, s 52(c)
20 Cancellation of breakdown pension at direction of pensioner—the Act, s 52(c)
20 Cancellation of breakdown pension at direction of pensioner—the Act, s 52(c)
(1) A pensioner who receives a breakdown pension that is not payable for the remainder of the pensioner’s life may direct STC, by written notice, to cancel the pension.
(2) The breakdown pension is cancelled on—
(a) the date STC receives the notice, or
(b) if a future date is specified in the notice for the cancellation—on the future date.
(3) Subject to subsection (5), when the breakdown pension is cancelled, entitlement to a further pension or other benefit under the Act must be determined on the basis the pensioner ceased, on the cancellation, to be on leave of absence without pay as provided by the Act, sections 48 and 49.
(4) The notice may direct—
(a) the cancellation have effect only for the period stated in the notice, being a period ending on—
(i) a specified date, or
(ii) the happening of a specified event, and
(b) STC to re-determine the grant of the pension at the end of the period.
(5) If the notice directs that the cancellation have effect only for the period stated in the notice—
(a) the breakdown pension is not payable to the pensioner during the period, and
(b) at the end of the period STC may, on application, grant a breakdown pension or other pension or benefit for which the pensioner is eligible as if the pensioner had continued during the period as an employee on leave of absence without pay in accordance with the Act, sections 48 and 49.
(6) The pensioner may, during the period the cancellation has effect, extend or reduce the period of cancellation by further written notice to STC.
(7) In this section—
breakdown pension means a pension payable under the Act, section 29 or 52E.
(2) An act, matter or thing that, immediately before the repeal of the Superannuation Regulation 2016, had effect under that Regulation continues to have effect under this Regulation.
Source text: opening excerpt
Sourced from legislation.nsw.gov.au, CC BY 4.0.
Part 1 Preliminary
Part 1 Preliminary
Part 1 Preliminary
1 Name of Regulation
1 Name of Regulation
1 Name of Regulation
This Regulation is the Superannuation Regulation 2022.
2 Commencement
2 Commencement
2 Commencement
This Regulation commences on the day on which it is published on the NSW legislation website.
Note—
This Regulation repeals and replaces the Superannuation Regulation 2016, which would otherwise be repealed on 1 September 2022 by the Subordinate Legislation Act 1989, section 10(2).
3 Definitions
3 Definitions
3 Definitions
In this Regulation—
additional surcharge amount means the amount of superannuation contributions surcharge assessed to be payable by a post-payment surcharge assessment notice.
approved valuation method, for Part 3—see section 11.
contributor—
(a) for Part 3—see section 11, and
(b) otherwise—has the same meaning as in the Act.
Commissioner of Taxation means the person holding office for the time being as the Commissioner of Taxation under a law of the Commonwealth.
deferred benefit, for Part 3—see section 11.
post-payment surcharge assessment notice means a notice that—
(b) is received on or after 25 June 2004 by the former contributor after a benefit has commenced to be paid, or has been paid, to the former contributor.
surcharge debt account has the same meaning as in the Act, section 61RA.
surcharge deduction cap, in relation to a former contributor, means the maximum surcharge deduction amount that may be determined by STC under the Act, section 61RA(1C) in relation to a benefit payable to the former contributor.
the Act means the .
Sets limits on the surcharge deduction cap calculation by specifying percentage rates for employer-financed portions accrued in particular historical periods (s 19).
Requires STC to provide annual statements of debt account balances and to request TFNs where not held (s 10).
The Regulation repeatedly confers discretion on “STC” to determine actuarial bases, rates of interest charged to debt accounts, how components of a benefit are to be reduced, and reasonable timeframes or “reasonable periods” in particular contexts (for example ss 5(5)-(7), 7(3), 8(3)-(5), 12-15). Those discretions are the primary operational levers created by the Regulation, and they are the mechanisms through which reductions, reimbursements and family law transfers are implemented.
This section summarises what the instrument changes mechanically; subsequent sections explain the main concepts, who is affected, duties and rights, enforcement levers, interactions with other laws, amendment and litigation history available in the text, practical pitfalls and compliance steps required by the Regulation.
Main concepts
The Regulation builds on a few recurrent operational concepts that determine treatment of liabilities and family law entitlements. These core concepts are defined or applied in multiple places and determine how STC acts, how balances are preserved, and how third parties such as the Commissioner of Taxation and family law counterparties are involved.
Debt account
The Regulation prescribes creation of a debt account in the Fund in circumstances where a contributor or former contributor has an outstanding liability that will reduce future benefits. It expressly requires STC to create a debt account for no‑TFN liabilities (s 9(2)), and provides that debt accounts must be created for early release amounts where subsection 5(3) applies (s 5(3)). The definition of surcharge debt account in s 3 cross‑references the Act (s 61RA), and s 5(5) identifies the composition of amounts debited (amounts released plus interest at a rate determined by STC).
STC must provide an annual statement of the debt account balance to each contributor or former contributor and must request a TFN if none has been provided (s 10).
Reduction of benefits
The Regulation sets the mechanics for reducing benefits in several contexts: early release of benefits (ss 5-7), superannuation contributions surcharge and post‑payment surcharge assessment notices (ss 8, 18, 19), and reductions flowing from family law payment splits (ss 12-16).
For early release benefits, if a contributor later has a preserved or provided benefit STC either offsets the preserved benefit by the amount released (s 5(2)) or creates and debits a debt account to be offset against future payables (s 5(3)). Interest on amounts debited accrues at a rate determined by STC (s 5(5)). STC may obtain actuarial advice to determine reduced amounts and may choose which components of a benefit are reduced (s 5(6)-(7)).
Family law interactions and valuation
The Regulation adopts Commonwealth family law valuation rules by reference: for non‑deferred superannuation interests the approved valuation method is the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003 (s 11(1)); for deferred benefits it directs use of Family Law (Superannuation) Regulations 2001, Schedule 2, Part 7 (s 12(3)). Section 12(2) requires valuation of a contributor spouse’s superannuation interest (other than deferred benefits) using the approved valuation method.
The Regulation establishes notice obligations where a superannuation interest becomes subject to a payment split: STC must notify contributor and non‑contributor spouse within defined timeframes and include specified content, including estimates, calculation method, effects on contributor entitlements and a 60‑day nomination period; it also provides a rollover default to Aware Super Fund if the non‑contributor spouse does not nominate within 60 days (s 13(1)-(5)).
Calculation of reduced benefit
Section 15 prescribes the arithmetic approach for reducing a contributor’s benefit after a family law payment split. It defines variables and uses actuarial advice to determine benefit accrual and value; multiple family law payments are combined by multiplying reduction factors (s 15(4)-(6)). STC must apply actuarial advice when determining value and accrual (s 15(7)) and may commute part of a pension under section 16(1) for payment of a non‑contributor spouse’s entitlement.
Surcharge deduction cap
The Regulation constrains the surcharge deduction amount by setting upper limits for employer‑financed portions of benefits accrued over particular historical ranges (s 19). The percentage caps differ by accrual period: 15% for amounts accrued after 20 August 1996 and before 1 July 2003, 14.5% for amounts accrued on or after 1 July 2003 and before 1 July 2004, and 12.5% for amounts accrued on or after 1 July 2004 and before 1 July 2005.
Discretion and advice
STC has recurring powers to obtain actuarial or other advice to support calculations (for example ss 5(6), 7(4), 8(3), 9(3), 15(7), 17). STC determines interest rates applied to debt accounts and which benefit components are reduced (s 5(5), s 5(7)). The Regulation therefore centralises technical determination with STC, subject to the requirement to use actuarial advice in many contexts.
Time limits and defaults
The Regulation establishes explicit time frames: notice periods for payment split events (28 days, s 13(2)), a 60‑day nomination period for non‑contributor spouses to nominate rollover destination or provide payment details (s 13(4)(c)), transfer/rollover timelines (30 days, s 14(2)), annual statements for debt accounts (s 10), and “reasonable period” qualification for requests involving payment of general interest to be reimbursed (ss 8(5), 18(3)).
These main concepts are the building blocks for the duties, rights and discretionary choices that follow. Their implementation depends on STC’s operational capacities, actuarial inputs, record keeping and communication systems, and they impose a set of private costs and procedural obligations on contributors, former contributors and non‑contributor spouses.
Who it affects
The Regulation identifies and affects a circumscribed set of actors, with different duties and consequences for each actor defined by circumstance.
STC
The Regulation places numerous duties and discretions on STC. STC must create debt accounts in prescribed circumstances (s 9(2); s 5(3)), provide annual statements of debt account balances (s 10), obtain actuarial or other advice to determine reductions and apportionments (ss 5(6), 8(3), 15(7), 17), calculate and apply reductions, commute pensions with consent (s 7), give notices to contributors and non‑contributor spouses (ss 13(1)-(4), 14(3)-(4)), and pay or transfer family law entitlements within specified timeframes (s 14). STC also has power to reimburse or pay amounts to the Commissioner of Taxation on behalf of former contributors in certain surcharge contexts (s 18). The Regulation therefore allocates decision‑making and significant operational responsibility to STC.
Contributors and former contributors
Contributors and former contributors are the primary subjects of reductions, debts and notices. They may receive early release benefits (ss 5-7) and be required to have future benefits reduced, possibly via debt accounts (s 5(3)-(5)). A former contributor receiving a post‑payment surcharge assessment notice is the person in relation to whom STC may make and pay adjustments or reimbursements under ss 8 and 18. Contributors and former contributors are required to be sent annual debt account statements and to supply TFNs if requested (s 10). They must also give written consent to benefit reductions before STC releases certain early release benefits (s 6).
Non‑contributor spouses
Non‑contributor spouses affected by a payment split created by superannuation agreements, flag lifting agreements or splitting orders are entitled to notices, to receive or nominate a receiving fund or RSA, and to have amounts paid, released, transferred or rolled over to them or their nominated complying super fund or RSA (ss 13-14). They must act within specified timeframes (60 days to nominate or provide payment details, s 13(4)(c)) or else the Regulation provides for default crediting to the Aware Super Fund (s 13(4)(d)).
Commissioner of Taxation
The Regulation interacts with the Commonwealth Commissioner of Taxation in contexts of superannuation contributions surcharge. It contemplates STC paying amounts directly to the Commissioner on behalf of a former contributor when a post‑payment surcharge assessment would otherwise produce total surcharge amounts greater than the surcharge deduction cap (s 18(2)). The Regulation also references the Commonwealth Superannuation Contributions Tax (Assessment and Collection) Act 1997 in definitions (s 3).
Aware Super Fund
A specific default receiving vehicle is specified. If the non‑contributor spouse does not nominate a complying superannuation fund or an RSA within the 60‑day period, the Regulation provides that the amount will be credited to the Aware Super Fund (s 13(4)(d)). This creates a concrete operational default that affects the eventual holder of transferred funds where a non‑contributor spouse fails to nominate.
Complying superannuation funds and RSAs
These entities are potential recipients of family law superannuation entitlements transferred by STC. The Regulation sets deadlines and nomination procedures for transfers and rollovers (s 14(2)).
Other stakeholders
Actuaries and advisers: The Regulation expressly contemplates STC procuring actuarial and other advice for valuation, apportionment and calculation purposes (see ss 5(6), 8(3), 9(3), 15(7), 17). Those professionals will be engaged regularly.
Administrators of the Fund: Operationally responsible for implementing debt accounts, calculating interest, preparing notices and making transfers in line with the Regulation.
Distributional effects
The regulation’s mechanics allocate costs and benefits in a specific way. Contributors and former contributors bear the direct financial cost of surcharge and no‑TFN liabilities via reduced future benefits or debt accounts (ss 5, 9). Non‑contributor spouses gain a protected and time‑bound route to receive family law entitlements with a statutory default to Aware Super Fund where they do not nominate (ss 13-14). STC bears the administrative cost of calculating, notifying and administering the debt accounts and family law transfers, and of obtaining actuarial and other professional advice (multiple sections authorise STC to obtain advice).
Who decides and who pays
STC decides how debt accounts are maintained, the rate of interest to be applied to debited amounts, the valuation methodologies (subject to prescribed approved methods for family law purposes), the apportionment of reserves on actuarial advice, and whether to reimburse or pay the Commissioner in surcharge cases (see ss 5(5), 5(6), 8(3), 17, 18(1)-(2)). Contributors and former contributors ultimately pay by reduced benefits or out‑of‑pocket payments to the Commissioner as determined or facilitated by STC under ss 8 and 18.
Procedural burdens on private persons
Contributors and non‑contributor spouses must respond to statutory notices within defined timeframes to avoid default outcomes such as automatic credit to Aware Super Fund or reductions being applied without further negotiation (ss 13-14). Former contributors who receive post‑payment surcharge notices can request STC adjustments (s 8), but those adjustments are limited by the surcharge deduction cap and previous payments (s 8(1)-(2), s 19).
Geographic and legal scope
The instrument is made under the Act and operates in New South Wales, but it incorporates several Commonwealth laws and regulations for particular valuation rules and tax treatment (s 11, s 12, s 3 definitions and notes). The factual settings in which it operates include interplays between State fund administration and Commonwealth taxation and family law regimes.
Key duties and rights
The Regulation allocates explicit duties to STC and to contributors, former contributors and non‑contributor spouses. Rights of affected persons are largely procedural and financial: rights to notices, rights to make requests, rights to nominate receiving funds and limited rights to require STC to act in specific ways.
STC duties
Create and maintain debt accounts: STC must create a debt account where a benefit is liable to be reduced under the no‑TFN rules and has duties concerning debt accounts for early release amounts (s 9(2); s 5(3)-(5)).
Provide statements and request TFNs: STC must at least once a year provide each contributor and former contributor with a statement as to the balance of the debt account created in relation to them and must request a TFN if none is on record (s 10).
Notices and timing: STC must provide written notice to contributor and non‑contributor spouse when a superannuation interest becomes subject to a payment split and must do so within 28 days after the operative time (or receipt of the splitting order where relevant) (s 13(1)-(2)). STC must also give written notice after amounts are paid, released, transferred or rolled over (s 14(3)-(4)).
Payment and rollover timing: STC must pay or release family law superannuation entitlements as soon as practicable after receiving required details from the non‑contributor spouse or within fixed times where nominations are made or not (s 14(1)-(2)).
Reduction calculations and actuarial advice: STC must determine the amount of reduced benefits using actuarial advice where specified (for example s 15(7); s 9(3) requires STC to have regard to the debt account and obtain actuarial advice under the Act). STC may obtain actuarial or other advice for certain adjustments (ss 5(6), 8(3)).
Discretion to commute: STC may commute part of a pension at its discretion and with the consent of the person to whom the pension is payable, to facilitate payment of reductions or family law entitlements (ss 7(2), 16(1)).
Contributor and former contributor duties and rights
Consent to reduction prior to early release: STC must obtain written consent from the contributor or former contributor to the reduction of future benefits before releasing a benefit under the Act sections referenced (s 6). This is a pre‑release consent requirement.
Right to request adjustment for post‑payment surcharge: A former contributor may request STC to adjust the amount of a benefit by reducing it and to pay an equivalent amount to either the former contributor or the Commissioner of Taxation, subject to the lesser of the additional surcharge amount and the surcharge deduction cap (s 8(1)). The Regulation limits STC from making payments that would result in payments to or on behalf of the former contributor being greater than total benefits to which the person is entitled (s 8(4)).
Reimbursement and payment to Commissioner: STC may reimburse a former contributor where total surcharge amounts exceed the surcharge deduction cap or may pay the excess to the Commissioner on behalf of the former contributor upon request (s 18(1)-(2)). Payment of general interest charged is not authorised unless the request for payment is made by the former contributor within a reasonable period as determined by STC (ss 8(5), 18(3)).
Obligation to provide TFN: Contributors and former contributors who have not provided a tax file number may be asked to supply it when STC provides the annual statement required under s 10.
Non‑contributor spouse rights and duties
Notice and information rights: Non‑contributor spouses must receive a written notice specifying the estimated amount of their family law superannuation entitlement, how it was calculated and the circumstances in which the amount may be paid, released, or must be transferred or rolled over (s 13(4)(a)-(b)).
Nomination and default: Non‑contributor spouses must, within 60 days of the notice, provide payment details if they are eligible for payment or nominate a complying superannuation fund or an RSA for transfer/rollover if not eligible (s 13(4)(c)). If they fail to do so the amount will be credited to the Aware Super Fund (s 13(4)(d)).
Receipt and transfer notices: After payment, release, transfer or rollover, STC must notify the non‑contributor spouse of the action taken, the amount, how it was calculated and, in the case of transfer/rollover, the receiving fund and contact details (s 14(4)).
Procedural protections and limitations
Actuarial and advisory processes: The Regulation repeatedly requires or permits STC to obtain actuarial advice for the purposes of valuation and reduction calculations (see ss 5(6), 8(3), 12(2), 15(7), 17). This is the primary procedural safeguard for technically complex reductions but also centralises the professional expertise with STC.
Limits on payments: STC is not authorised to pay amounts that would make payments to or on behalf of a former contributor exceed the total benefits to which the person is entitled (s 8(4)). That operates as a guardrail against overpayment.
Time limits and “reasonable period” caveats: The Regulation sets many explicit timeframes but also leaves certain questions subject to STC’s determination of “reasonable period” for payment of general interest in surcharge reimbursements (ss 8(5), 18(3)). That introduces an element of administrative judgment.
Rights to seek adjustment or reimbursement
The Regulation creates a specific pathway for a former contributor to request an STC adjustment to pay amounts equivalent to surcharge liabilities (s 8(1)) and for STC to reimburse a former contributor when the total surcharge exceeds the surcharge deduction cap (s 18(1)). Those rights are contingent on the statutory limits and prior payments and are constrained by definitions such as total surcharge amount and surcharge deduction cap (s 3 and s 19).
In sum the Regulation confers operational responsibilities on STC, procedural rights to contributors and non‑contributor spouses to receive notices and to nominate receiving funds, and limited adjustment rights for former contributors affected by surcharge assessments. The practical effect is that many financial obligations are realised by reductions to future benefits rather than immediate external payments, with STC’s actuarial determinations determining the quantum and timing.
Penalties and enforcement
The Regulation deploys administrative enforcement mechanisms rather than standalone criminal penalties. Its principal enforcement levers are reductions of benefits, the creation of debt accounts, deductions from future benefits, and contractual/operational defaults (for example rollover default to Aware Super Fund). The instrument contains no express criminal sanctions or pecuniary penalty provisions within the text provided. Enforcement and compliance therefore occur through administrative action by STC and interaction with Commonwealth tax and family law processes.
Administrative enforcement mechanisms
Benefit reduction and debt accounts: The primary enforcement tool is reduction of benefits. Where a debt account is created (for no‑TFN tax reasons or as a result of early release), STC is required to have regard to the debt account when determining the reduced benefit and to reduce benefits when payable by the amount debited to the debt account (s 9(2)-(3); s 5(3)). Section 5(2) provides that if an early release benefit has been released to a former contributor who has provided for or preserved a benefit, STC must calculate and reduce the provided or preserved benefit from the date of release (s 5(2)).
Interest and rates set by STC: Interest on amounts debited to the debt account accrues at a rate determined by STC (s 5(5)). Setting interest rates is an enforcement mechanism that increases the eventual amount debited and thus the reduction applied to future benefits.
Commutation and commensurate reductions: STC may commute part of a pension with the consent of the pensioner to facilitate payment of a reduction or family law entitlement and must reduce the pension in accordance with the prescribed calculation (ss 7(2)-(3); 16(1)-(2)). This provides a direct enforcement route where pensions are the mechanism of payout.
Time‑bound default to Aware Super Fund: If a non‑contributor spouse fails to respond within the statutory 60‑day period, STC will credit the amount to the Aware Super Fund by default (s 13(4)(d)). That is an enforcement mechanism that imposes a default outcome on non‑responding parties.
Payment to Commissioner of Taxation: In surcharge contexts STC may pay the Commissioner on behalf of a former contributor where total surcharge amount exceeds the surcharge deduction cap (s 18(2)). This enables STC to settle Commonwealth tax liabilities directly and converts an administrative calculation into a discharge of external statutory debt.
Constraints and limitations on enforcement
Limits on authorised payments and interest: STC is not authorised to pay an amount that would result in payments to or on behalf of a former contributor being greater than the total benefits to which the former contributor is entitled (s 8(4)). Payment of general interest charged in relation to additional surcharge amounts is not authorised unless a request is made by the former contributor and is within a reasonable period determined by STC (ss 8(5), 18(3)). These constraints limit the instances in which STC must absorb or pay incidental interest rather than reducing future benefits.
Reliance on actuarial advice: Many reductions must be determined after STC obtains actuarial advice (s 9(3); s 15(7)). Enforcement therefore depends on technical valuation processes that are subject to professional judgement and can be a focal point for disputes.
Procedural requirements: STC must give notices with specified information and timeframes (s 13; s 14). Failure to observe those notice obligations could give rise to procedural challenges under administrative law, though the Regulation does not itself specify remedies or review mechanisms.
Potential enforcement pathways outside the Regulation
The Regulation ties into Commonwealth tax and family law processes. For instance, post‑payment surcharge assessment notices are issued under the Commonwealth Superannuation Contributions Tax (Assessment and Collection) Act 1997 and STC’s capacity to pay the Commissioner under s 18 interacts with Commonwealth collection processes. Disputes about valuation or calculation of reduced benefits arising from family law splitting orders would engage Family Law Act Part VIIIB concepts because the Regulation repeatedly refers to operative time and Commonwealth family law valuation instruments (s 11, s 12, s 13(7)).
Administrative discretion and risk of challenge
Because STC sets key parameters (interest rates, which components of benefits are reduced, and “reasonable periods” for requests relating to general interest), administrative discretion is significant. Many determinations require actuarial advice, which introduces technical components open to dispute. Absent any express internal merits review process in the Regulation, affected persons would rely on general mechanisms such as requests to STC, administrative appeals (if provided elsewhere in the Act), or judicial review, none of which are set out in the Regulation itself.
Sanctions absent from the Regulation
The Regulation does not create express criminal offences, pecuniary penalty provisions, or civil penalty regimes within its text. The enforcement emphasis is operational: offsets and transfers that reduce future entitlements and direct payments to the Commissioner where appropriate.
In short, enforcement under the Regulation is achieved by administrative debits and reductions, timing defaults and transfer obligations enacted via STC’s operational functions and discretionary determinations supported by actuarial advice. The primary risk of non‑compliance for individuals is loss of future benefit entitlements or default rollover to a nominated vehicle where they fail to act within statutory timelines.
How it interacts with other laws
The Regulation is explicitly designed to operate alongside and to implement aspects of the Superannuation Act 1916 (the Act) and to interlock with Commonwealth tax and family law instruments. The text contains multiple cross‑references and incorporations that create dependencies and delegate certain technical matters to Commonwealth instruments.
Links to the Act
The Regulation operates under and for the purposes of various sections of the Act. Each substantive part is expressly stated to give effect to specified Act provisions, for example s 5 is for Act s 61RH, s 8 for Act s 61RA(5), s 9 for Act s 61RC(1)(d) and (5), s 12 for Act s 61WD(h), and so on. The Act provides the statutory authority and the Regulation supplies operational detail about how reductions, debt accounts, notices and payments happen.
Family law regime interactions
The Regulation adopts Commonwealth family law valuation standards and operational concepts. It defines “approved valuation method” by reference to the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003 and directs use of the Family Law (Superannuation) Regulations 2001 for deferred benefits (s 11(1); s 12(3)). It also uses the Family Law Act 1975 concept of “operative time” when prescribing notice timelines for payment splits established by splitting orders (s 13(7); s 13(2)(b)). The practical effect is that STC must apply Commonwealth family law valuation practice when calculating values for state law purposes, ensuring consistency in cross‑jurisdictional family law settlements.
Commonwealth taxation
The Regulation interacts with Commonwealth taxation law in the context of superannuation contributions surcharge and post‑payment surcharge assessment notices. The definition of post‑payment surcharge assessment notice in s 3 expressly cites the Superannuation Contributions Tax (Assessment and Collection) Act 1997 of the Commonwealth. Sections 8 and 18 set out how STC may adjust benefits or reimburse and may, at the request of a former contributor, pay amounts to the Commissioner of Taxation on the former contributor’s behalf (ss 8(1)(b), 18(2)). The Regulation therefore functions as an administrative bridge between Commonwealth tax assessments and State fund operations.
Interpretation and subordinate legislation linkages
The Regulation’s preamble notes the Interpretation Act 1987 and references the Subordinate Legislation Act 1989; the commencement note explains the timing and repeal of the previous regulation (commencement note and s 21). These connections situate the Regulation within the broader schema of State legislative interpretation and subordinate instruments.
Regulatory and administrative overlap
The Regulation authorises STC to charge or pass on costs in limited contexts indirectly by referencing Commonwealth regulations. For example, a Note under s 14 states that under Commonwealth Family Law (Superannuation) Regulations 2001 regulation 59, STC may charge reasonable fees in relation to payment splits, flagging and related matters with fees generally payable in equal parts by contributor and non‑contributor spouse. That cross‑reference signals administrative cost recovery that is governed by Commonwealth regulation even though the material administrative act is performed by a State entity.
Default funds and superannuation law
The Regulation imposes a default credit to the Aware Super Fund where a non‑contributor spouse does not nominate within the 60‑day window (s 13(4)(d)). That creates a State law‑imposed interaction with a named industry fund and with transfer/rollover rules that operate under Commonwealth superannuation law and complying fund rules.
Actuarial and professional standards
The Regulation repeatedly requires or contemplates actuarial advice for valuation and apportionment (ss 5(6), 8(3), 9(3), 12(2), 15(7), 17). Those requirements create an interface with professional standards, liability and procurement practices for actuaries whose advice will be determinative of reductions and allocations under the Act and Regulation. The use of actuarial advice also creates potential cross‑jurisdictional contestability where Commonwealth family law valuations meet State fund valuation practices.
Administrative law and review
While the Regulation imposes duties and confers discretions, it does not set out an internal review process for disputes over STC decisions. Consequently, affected parties seeking to challenge STC valuations, interest rates applied to debt accounts, or decisions not to reimburse interest will likely rely on general administrative law remedies, or on the appeals or review mechanisms present in the Act or elsewhere. The Regulation’s silence on internal review means interactions with broader administrative and judicial review regimes are inevitable where contested determinations arise.
In short, the Regulation is an implementing instrument that threads State fund administration into Commonwealth taxation and family law frameworks, delegates technical valuation matters to Commonwealth approved methods for family law purposes, and requires STC to operate within a mesh of State administrative law, professional actuarial practice and Commonwealth tax and family law obligations.
Amendment history
The Regulation itself contains concise amendment and commencement information within the text provided.
Commencement and repeal of predecessor instrument
The commencement clause states that the Regulation commences on the day on which it is published on the NSW legislation website and records that it repeals and replaces the Superannuation Regulation 2016, which otherwise would have been repealed on 1 September 2022 under the Subordinate Legislation Act 1989 s 10(2) (Commencement note and s 2). Section 21(1) expressly repeals the Superannuation Regulation 2016. Section 21(2) provides saving provisions that preserve acts or matters that had effect under the repealed Regulation so they continue to have effect under the new Regulation.
Transitional saving
The saving clause in s 21(2) preserves existing actions, matters or things that had effect immediately prior to repeal. The clause ensures continuity of legal effect for ongoing administrative matters and obligations arising under the prior regulation.
No other amendments in the text
The text supplied does not record any later amendments to the Superannuation Regulation 2022. The Regulation contains internal cross‑references to the Act and to Commonwealth instruments but no schedule of amendment history beyond the transition from the 2016 regulation. There are several explanatory Notes that reference other instruments but do not record subsequent amending activity.
Implication for users
Users should note that the current Regulation superseded the 2016 instrument and that ongoing changes to the underlying Act or relevant Commonwealth legislation may require further subordinate amendments. The Regulation’s references to Commonwealth instruments (for example family law valuation approvals and regulations, and the Superannuation Contributions Tax Act) mean that subsequent Commonwealth changes to those instruments can affect how s 11 and s 12 operate in practice without requiring immediate NSW Regulation amendment.
Record keeping and version awareness
Because this Regulation replaced an earlier instrument, administrators and practitioners need to ensure they consult the current version of the Regulation and the Act together with updated Commonwealth instruments for valuation and tax processes. The Regulation itself relies on external schedules and approvals for valuation methods (s 11) and on the Family Law Act 1975 concept of operative time (s 13(7)). That means the effective legal regime is dynamic and can change when referenced Commonwealth instruments are updated.
Absence of retroactive amendment detail
The Regulation’s saving provision preserves prior acts and matters as continuing effect. There is no provision in the text supplied for retroactive amendments or for particular transitional calculation methods other than the general saving clause in s 21(2).
If the reader needs a formal amendment history beyond the repeal of the 2016 Regulation, they should consult the NSW legislation website for subsequent amendment instruments, commencement notices and consolidated versions. The Regulation itself contains the core transitional provision and commencement statement necessary to understand its initial entry into force.
Litigation history
The Regulation text supplied does not identify any cases or judicial decisions that interpret or apply its provisions. It does not cite or list litigation outcomes, judicial constructions, or disputes arising under the Regulation. Therefore, within the text itself there is no litigation history to summarise.
Practical implications of the absence of recorded cases
The lack of cases in the Regulation means that many of the discretions conferred on STC and the technically complex matters (for example actuarial valuations, calculation of reduced benefits under family law splits, interest rates on debt accounts and application of surcharge deduction caps) may not have been the subject of a reported judicial decision at the time of this Regulation’s publication.
In practice, disputes that might lead to litigation would likely focus on actuarial methodology, the calculation of benefit accruals and values (ss 12, 15), the setting of interest rates on debt accounts (s 5(5)), STC’s exercise of discretion as to which component of a benefit is reduced (s 5(7)), and the interpretation of “reasonable period” in ss 8(5) and 18(3).
Potential judicial review and family law pathways
Given STC’s administrative role, affected persons who consider a decision to be legally deficient would typically have two primary avenues: family law mechanisms where a family law splitting order or agreement is in issue and administrative law remedies such as judicial review for errors of law, procedural unfairness, or unreasonableness. The Regulation itself does not provide a standalone internal merits review scheme, so remedies will be derived from the Act, general administrative law or family law processes. Because the Regulation requires application of Commonwealth family law valuation instruments (ss 11-12), family law courts may be a forum for valuational disputes tied to those methods.
Areas likely to generate litigation if disagreements arise
Disputes about STC’s actuarial determinations under the Regulation: s 15 requires STC to determine benefit accrual and value on actuarial advice. Differences in actuarial assumptions or methods could produce disputes.
Disputes about the application and calculation of surcharge‑related deductions and reimbursements: ss 8 and 18 create pathways for adjustment and reimbursement but also introduce constraints such as the surcharge deduction cap and the timing requirement for payment of interest.
Disagreements about STC’s setting of interest rates for debt accounts and the subsequent impact on reduced benefits: an interest rate determined by STC (s 5(5)) directly affects the amount debited to the debt account and the future reductions applied.
What is not in the text
The Regulation does not name any tribunal, court, or statutory appeal route specific to disputes under the Regulation. There is no textual catalogue of past litigation. To locate reported cases engaging the Regulation in practice, one would need to search case law databases, family law judgments and administrative law reports in the relevant period after the Regulation’s commencement.
In short, the text supplied contains no litigation history. The Regulation’s provisions, particularly those that confer technical or discretionary powers on STC, create the factual settings where litigation could arise, but the Regulation itself does not record any judicial interpretation or contested adjudications.
Gotchas
This section sets out specific pitfalls, operational traps and points likely to generate confusion or unintended outcomes for administrators, contributors, former contributors and non‑contributor spouses. Each “gotcha” is grounded in the Regulation’s text and highlights implementation, timing, and discretion risks.
Consent for early release reductions
STC must obtain written consent of the contributor or former contributor to the reduction of future benefits before releasing a benefit under the Act sections referenced (s 6). Practically this means a release cannot proceed without the contributor’s written consent to future reductions. Failure to obtain consent may invalidate the release process or expose STC to procedural challenge. Administrators should ensure robust consent forms and record‑keeping.
Debt accounts and interest set by STC
Amounts debited to a debt account for early release include interest at a rate determined by STC (s 5(5)). The Regulation gives STC discretion to pick the interest rate, which materially affects the magnitude of future reductions. Contributors may not anticipate this compounding effect; administrators should disclose the applicable rate and method for its determination to avoid disputes.
Annual statement and TFN request
STC must at least once a year provide each contributor/former contributor with a statement as to the balance of their debt account and must request TFNs if not held (s 10). Failure to provide the statement may lead to disagreements about the balance. Contributors failing to provide TFNs may be subject to no‑TFN tax treatment and associated reductions; ignoring the TFN request effectively triggers risk of future deductions under s 9.
“Reasonable period” caveats for payment of interest
Sections 8(5) and 18(3) state STC does not authorise payment of general interest charged unless the former contributor requests payment of the interest within a “reasonable period” after receiving a post‑payment surcharge assessment notice, as determined by STC. The lack of a defined objective timeframe transfers significant discretion to STC and creates uncertainty for contributors about whether they will be reimbursed for interest. Expect disputes where contributors miss STC’s internally determined “reasonable period”.
Default rollover to the Aware Super Fund
If a non‑contributor spouse does not nominate a complying superannuation fund or RSA within 60 days after notice, the amount will be credited to the Aware Super Fund (s 13(4)(d)). Non‑contributor spouses who do not act within the 60 days will lose choice of receiving fund. Administrators must be diligent in giving the statutory notice and documenting the 60‑day clock. Practitioners must warn clients that failing to respond leads to a concrete default.
Timing requirements
The Regulation imposes tight statutory timeframes: 28 days for notices after operative time or receipt of splitting order (s 13(2)), 60 days for non‑contributor nomination (s 13(4)(c)), and 30 days for transferring/rolling over amounts once nominated or if nomination is absent at end of the period (s 14(2)). Failure to meet these timeframes could lead to claims of administrative error or disputes about the effect of a splitting order. STC should have operational workflows to adhere to these deadlines.
Complexity of family law valuation and actuarial reliance
Section 12 requires use of an approved valuation method for non‑deferred interests and the Family Law Regulations for deferred benefits. Section 15 relies on actuarial advice to determine benefit accrual and value. Actuarial valuations can produce substantially different outcomes depending on assumptions. Parties may therefore face unpredictability and contested valuations; procurement of independent actuarial advice may be essential in dispute contexts.
Surcharge deduction cap and historical accrual windows
Section 19 prescribes the maximum surcharge deduction amount using percentage caps tied to employer‑financed portions in specific historical accrual windows. The presence of multiple accrual date bands (1996-2003; 2003-2004; 2004-2005) complicates calculations, requiring careful historical payroll and benefit accrual analysis. Incomplete historical records will impede accurate cap calculation and could result in contested adjustments.
Limits on payments and non‑authorisation of interest payments
STC is not authorised to pay amounts that would make payments to or on behalf of a former contributor greater than total benefits (s 8(4)). Payment of general interest is not authorised unless certain conditions are met (ss 8(5), 18(3)). Contributors should be aware that reimbursements are constrained and that interest will often remain part of the total surcharge amount unless a timely request is made.
Multiple family law payments and multiplicative reduction factors
When family law superannuation payments are made for more than one spouse, s 15(5)-(6) prescribes applying multiplicative reduction factors. This is not a simple additive subtraction. The multiplicative approach can lead to unintuitive reductions when multiple splits across time affect the same original benefit, and it requires an actuarial computation that is not easily replicated in lay terms.
Absence of express internal merits review mechanism
The Regulation confers substantial discretions to STC (interest rates, which components to reduce, reasonable period determinations) but does not set out an internal merits review or appeal route. Affected persons may need to resort to general administrative review routes or judicial review where decisions are contested. That increases the cost and complexity of dispute resolution.
Fees under Commonwealth family law regulations
The Regulation’s Note to s 14 indicates STC may charge reasonable fees under the Commonwealth Family Law Regulations and that fees are generally payable in equal parts by the contributor and non‑contributor spouse. Parties should budget for these fees in settlement planning as they reduce net transfer amounts and may slow administration if fees are disputed.
In summary, the main practical “gotchas” are timing and notice requirements, STC’s discretions (interest rates and “reasonable periods”), reliance on actuarial valuations, defaults to a specified fund where non‑contributor spouses fail to nominate, and constrained reimbursement mechanics for surcharge interest. Close operational attention to record keeping, notice dispatch, and timely responses will mitigate many of these pitfalls.
How to comply
This section sets out practical, source‑grounded steps for administrators, contributors, former contributors and non‑contributor spouses to meet obligations and manage risks created by the Regulation. Each step is anchored to specific provisions.
For STC and Fund administrators
Establish debtor ledger processes and annual statements: Implement and maintain a debt account ledger for each contributor/former contributor as required by s 9(2) and s 5(3). Produce and send annual statements of debt account balances to each contributor/former contributor as required by s 10. The statements should include the balance, interest applied and the calculation basis to reduce disputes.
Document and retain written consents: Ensure robust record‑keeping and secure storage for written consents required before release of benefits under the Act provisions referenced in s 6. Consent forms should explicitly inform contributors about the effect of the reduction on future benefits.
Set and document interest methodology: Since interest on amounts debited to debt accounts is at a rate determined by STC (s 5(5)), adopt a clear policy for rate determination, periodic review, and disclosure. Publish or provide to impacted contributors the interest rate, calculation period and compounding method to reduce contention.
Maintain actuarial procurement processes: The Regulation authorises STC to obtain actuarial advice in many contexts (for example ss 5(6), 8(3), 9(3), 15(7), 17). Establish procurement and quality assurance for actuarial services, including documented assumptions, sensitivity analyses and peer review to withstand challenges.
Implement notice workflows and timelines: Build reliable operational workflows to meet the 28‑day notice obligations in s 13(2), the 60‑day nomination period for non‑contributor spouses in s 13(4), and the 30‑day transfer/rollover period in s 14(2). Track operative times and dates of receipt of splitting orders to trigger the statutory clocks.
Default rollover procedures: Prepare procedures for defaulting a non‑contributor spouse’s amount to the Aware Super Fund where no nomination is received within 60 days (s 13(4)(d)). Document attempts to contact the non‑contributor spouse and the point when defaulting to Aware Super Fund is executed.
Fees and cost recovery: Be aware that STC may be able to charge reasonable fees under Commonwealth family law regulations in relation to payment splits and related matters (note to s 14). Ensure transparent fee schedules and allocation between contributor and non‑contributor spouse as referenced.
For contributors and former contributors
Provide and update TFN: Respond to STC’s TFN request and supply a TFN where not already on file. Failure to provide a TFN exposes you to no‑TFN tax consequences and creation of debt accounts (s 10; s 9).
Consent and understand consequences for early release: Before consenting to release under the Act provisions referenced for early release benefits, obtain written documentation of the reduction consequences and ask STC to explain how reductions will be calculated and how interest is applied (ss 5-6).
Monitor debt account statements: Review annual debt account statements that STC must provide (s 10) and query any unexpected balances promptly. Keep contemporaneous records to reconstruct historic accruals if ss 19 and related calculations become relevant.
Use the adjustment pathway for surcharge notices: If you receive a post‑payment surcharge assessment notice and the additional surcharge amount would result in a total surcharge greater than the surcharge deduction cap, consider requesting STC to adjust the benefit under s 8(1). Do so promptly and provide evidence of prior payments captured by the definition of previously met surcharge liability (s 8(2)). If you wish STC to pay the Commissioner on your behalf in the circumstances of s 18(2), make that request explicitly.
Request payment of interest within a reasonable period: Be aware that payment of general interest charged is not authorised unless you request it within a reasonable period after receiving the notice as determined by STC (ss 8(5), 18(3)). Ask STC for a statement of what it treats as a reasonable period and make your request within that window.
For non‑contributor spouses
Respond within 60 days: When STC gives notice of a payment split, you must either provide payment details if eligible for payment or nominate a complying superannuation fund or RSA within 60 days (s 13(4)(c)). If you do not, the Regulation prescribes default credit to the Aware Super Fund (s 13(4)(d)).
Check notice content: The notice to the non‑contributor spouse must specify estimated entitlement, how it was calculated, and circumstances for payment, release or transfer (s 13(4)). If the notice is deficient or unclear, seek clarification from STC promptly to avoid default outcomes.
Verify transfers and rollovers: After transfer/rollover, STC must give a written notice specifying the amount and receiving fund (s 14(4)). Confirm receipt with the receiving fund and keep documentation of transfer dates, amounts and fund details.
For actuaries and advisers
Provide documented assumptions: Where STC engages actuarial advice as authorised, ensure reports specify assumptions, projections, mortality, discount rates and method references mandated by Commonwealth family law valuation approvals where applicable (ss 11-12; s 15(7)). Prepare sensitivity analyses to explain how different choices affect benefit accrual and value.
Clarify whether valuation concerns deferred or non‑deferred interests: Section 12 distinguishes valuation methods for non‑deferred and deferred benefits. Confirm which method applies to the specific interest being valued and cite the relevant Commonwealth schedule or approval.
Record keeping and auditability
Maintain documentary trails for all notices, consents, actuarial advice, computations of surcharge deduction caps (s 19), debt account entries and communications. The Regulation creates numerous statutory clocks and technical calculations that require verifiable records to support STC’s decisions and to protect contributors’ and spouses’ rights.
Where to seek clarification and review
If disputes cannot be resolved administratively, affected persons should identify remedies under the Act or general administrative law channels. The Regulation itself does not specify internal appeal mechanisms; therefore, alternative dispute resolution, requests for internal review to STC and external administrative or judicial review should be considered in turn.
In short, compliance requires proactive record keeping, timely responses to notices, clear consent documentation for releases and commutations, early engagement of actuarial advisers where complex valuations arise, and an operational framework at STC to implement statutory timeframes and default procedures set out in the Regulation.
total surcharge amount, in relation to a former contributor, means the sum of—
(a) the total amount of superannuation contributions surcharge that has been assessed to be payable in relation to employer contributions paid to the Fund on the contributor’s behalf up to and including the date on which the former contributor receives a post-payment surcharge assessment notice, and
(b) the amount, if any, of general interest charged in relation to the additional surcharge amount payable under the notice, and
(c) the amount of interest, if any, payable in relation to the surcharge debt account kept in relation to the former contributor.
Note—
The Act and the Interpretation Act 1987 contain definitions and other provisions that affect the interpretation and application of this Regulation.
Part 2 Reduction of benefits
Part 2 Reduction of benefits
Part 2 Reduction of benefits
Division 1 General
Division 1 General
Division 1 General
4 Application of Division
4 Application of Division
4 Application of Division
The benefits under the following provisions of the Act may be the subject of a reduction under this Division—
(a) section 27,
(b) section 28A,
(c) section 28AA,
(d) section 29,
(e) section 30,
(f) section 37,
(g) section 37A,
(h) section 37B,
(i) section 38A,
(j) section 47D,
(k) Part 4, Division 3A,
(l) Part 4, Division 3B,
(m) Part 4, Division 3D.
5 Reductions relating to early release of benefit—the Act, s 61RH
5 Reductions relating to early release of benefit—the Act, s 61RH
5 Reductions relating to early release of benefit—the Act, s 61RH
(1) This section applies to the reduction of benefits payable to, or in relation to, a contributor or former contributor to whom a benefit (an early release benefit) has been released under—
(a) section 61RF, or
(b) section 61RG.
(2) If an early release benefit is released to a former contributor who has provided for a benefit under the Act, Part 4, Division 3A or 3B, or had a benefit preserved under the Act—
(a) STC must, on and from the date of release—
(i) calculate the amount of the benefit provided for or preserved, for both a pension and lump sum, and
(ii) reduce the amount of the benefit provided for or preserved by the amount of the early release benefit, and
(b) when the benefit provided for or preserved is payable, the amount of the benefit must be reduced by the amount of the early release benefit.
(3) If subsection (2) does not apply, STC must—
(a) create a debt account in the Fund in relation to the contributor, and
(b) when a benefit is payable, reduce the benefit that is payable by the amount debited to the debt account at the time the benefit is payable.
(4) Despite subsection (3), if a benefit is deferred or preserved under the Act after the release of an early release benefit and before a benefit is otherwise payable to the contributor—
(a) STC must, on and from the date the benefit is deferred or preserved—
(i) calculate the amount of benefit deferred or preserved, for both a pension and lump sum, and
(ii) reduce the amount of the benefit deferred or preserved by the amount debited to the debt account at the time the benefit is deferred or preserved, and
(b) when the deferred or preserved benefit is payable, the amount of the benefit must be reduced by the amount debited to the debt account at the time the benefit was deferred or preserved.
(5) For subsections (3) and (4), the amount debited to the debt account must be the sum of—
(a) the amount of all early release benefits released to the contributor, and
(b) interest on the amount at a rate determined by STC.
(6) STC may obtain actuarial advice for the purpose of determining the amount of a reduced benefit.
(7) For subsections (2) and (4), STC may determine which component or components of a benefit are to be reduced.
(8) To avoid doubt, this section does not apply to reduce an early release benefit payable under the Act, section 61RF or 61RG.
6 Consent to reduction relating to early release of benefit—the Act, s 61RH(2)(b)
6 Consent to reduction relating to early release of benefit—the Act, s 61RH(2)(b)
6 Consent to reduction relating to early release of benefit—the Act, s 61RH(2)(b)
Before releasing a benefit under the Act, section 61RF or 61RG, STC must obtain the written consent of the contributor or former contributor to the reduction of future benefits as a consequence of the early release.
7 Commutation of pensions for reduction relating to early release of benefit—the Act, s 61RH
7 Commutation of pensions for reduction relating to early release of benefit—the Act, s 61RH
7 Commutation of pensions for reduction relating to early release of benefit—the Act, s 61RH
(1) This section applies if a benefit that is to be reduced under section 5 may be taken in the form of a pension.
(2) STC may, at its discretion and with the consent of the person to whom the pension is payable, commute part of the pension to a lump sum for the purposes of the payment to STC of the amount of the reduction.
(3) Commutation of part of the pension—
(a) does not affect other rights that the person has to commute the pension under the Act, and
(b) must not be taken into account for the purpose of determining whether, and to what extent, another right may be exercised, and
(c) must be done on a basis determined by STC.
(4) STC may obtain actuarial advice for the purpose of determining the basis on which part of a pension is to be commuted under this section.
8 Reduction for superannuation contributions surcharge—the Act, s 61RA(5)
8 Reduction for superannuation contributions surcharge—the Act, s 61RA(5)
8 Reduction for superannuation contributions surcharge—the Act, s 61RA(5)
(1) STC may, at the request of a former contributor—
(a) adjust the amount of a benefit payable to the former contributor by reducing the benefit by an amount (the reduction amount) that is equivalent to the lesser of—
(i) the additional surcharge amount, and
(ii) an amount, not being less than nil, equal to the amount of the surcharge deduction cap less any previously met surcharge liability, and
(b) pay an amount equal to the reduction amount to the former contributor or the Commissioner of Taxation.
(2) The previously met surcharge liability is the sum of—
(a) all amounts paid by the former contributor to STC or the Commissioner of Taxation in relation to the total surcharge amount of the former contributor, and
(b) all amounts in relation to which adjustments relating to the benefit of the former contributor have previously been made under this section or the Act in relation to the superannuation contributions surcharge.
(3) STC may, for the purposes of determining an adjustment under this section, obtain—
(a) actuarial advice, or
(b) other advice, as STC thinks fit.
(4) This section does not authorise STC to pay an amount that would result in payments made to or on behalf of the former contributor being greater than the total benefits to which the former contributor is entitled.
(5) This section does not authorise STC to pay an amount of general interest charged in relation to an additional surcharge amount payable under a post-payment surcharge assessment notice unless—
(a) the request for the payment is made by the former contributor, and
(b) the request is made within a reasonable period after receiving the notice, as determined by STC.
Note—
Sections 18 and 19 also relate to the superannuation contributions surcharge.
Division 2 Reductions relating to no-TFN tax—the Act, s 61RC(1)(d) and (5)
Division 2 Reductions relating to no-TFN tax—the Act, s 61RC(1)(d) and (5)
Division 2 Reductions relating to no-TFN tax—the Act, s 61RC(1)(d) and (5)
9 Benefit reductions relating to no-TFN tax
9 Benefit reductions relating to no-TFN tax
9 Benefit reductions relating to no-TFN tax
(1) For the Act, section 61RC(1)(d), the benefits provided under the following provisions of the Act are prescribed—
(a) section 27,
(b) section 28A,
(c) section 28AA,
(d) section 29,
(e) section 30,
(f) section 37,
(g) section 37A,
(h) section 37B,
(i) section 38A,
(j) section 47D,
(k) Part 4, Division 3A,
(l) Part 4, Division 3B,
(m) Part 4, Division 3D.
(2) STC must create a debt account in the Fund in relation to each contributor or former contributor in relation to whom a benefit is liable to be reduced under the Act, section 61RC.
(3) STC must have regard to the debt account when determining the amount of the reduced benefit.
Note—
Under the Act, section 61RC(3), the amount of the reduced benefit is to be determined by STC after obtaining actuarial advice.
10 Provision of information
10 Provision of information
10 Provision of information
STC must at least once a year—
(a) provide each contributor and former contributor with a statement as to the balance of the debt account created by STC in relation to the contributor or former contributor, and
(b) if a tax file number has not been previously provided to STC for a contributor or former contributor—request that the contributor or former contributor provide a tax file number to STC.
deferred benefit means a benefit under the Act, section 37B.
(2) Words and expressions used in this Part have the same meaning as they have in the Act, Part 4A.
12 Valuation of superannuation interests—the Act, s 61WD(h)
12 Valuation of superannuation interests—the Act, s 61WD(h)
12 Valuation of superannuation interests—the Act, s 61WD(h)
(1) This section applies for the purposes of—
(a) the Act, Part 4A, and
(b) the family law superannuation legislation.
(2) The value of a contributor spouse’s superannuation interest, other than in relation to a deferred benefit, must be determined in accordance with the approved valuation method.
(3) The value of a superannuation interest relating to a deferred benefit must be determined in accordance with the Family Law (Superannuation) Regulations 2001 of the Commonwealth, Schedule 2, Part 7.
13 Notice to contributor and non-contributor spouse when entitlement becomes payable—the Act, ss 61WB(5) and 61WD(a), (b), (e)
13 Notice to contributor and non-contributor spouse when entitlement becomes payable—the Act, ss 61WB(5) and 61WD(a), (b), (e)
13 Notice to contributor and non-contributor spouse when entitlement becomes payable—the Act, ss 61WB(5) and 61WD(a), (b), (e)
(1) If the superannuation interest of a contributor becomes subject to a payment split, STC must provide written notice of that fact to the following—
(a) the contributor,
(b) the non-contributor spouse.
(2) 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, or
(b) for a payment split under a splitting order—within 28 days after the later of the following—
(i) the operative time for the payment split,
(ii) STC’s receipt of a copy of the splitting order.
(3) The notice given to the contributor must specify—
(a) the estimated amount of the family law superannuation entitlement of the non-contributor spouse and how it was calculated, and
(b) the period within which payment of the entitlement must be made, and
(c) the estimated effect of the payment on the entitlement of the contributor under the State Superannuation Scheme established under the Act.
(4) The notice given to the non-contributor spouse must—
(a) specify the estimated amount of the family law superannuation entitlement of the non-contributor spouse and how it was calculated, and
(b) specify the circumstances in which the amount—
(i) may be paid or released to the non-contributor spouse, or
(ii) must be transferred or rolled over to a complying superannuation fund or an RSA, and
(c) require the non-contributor spouse to, within 60 days of the notice being given—
(i) if the non-contributor spouse meets a circumstance for payment or release—provide details as to the required method of payment, or
(ii) if the non-contributor spouse does not meet a circumstance for payment or release—nom
This is an opening excerpt, not the complete document.
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