Document ID: chunk:federal_register_of_legislation:C2004C01250:clause:1_27aca:p1
Version: federal_register_of_legislation:C2004C01250
Segment Type: clause
Provision Reference: sch 1 cl 27ACA (pt 1/2)
Character Range: 2745–5425

27ACA  Effect of payment split under the Family Law Act 1975 on eligible termination payments

ETP for non‑member spouse

 (1) If:
 (a) a payment split applies to a splittable payment; and
 (b) as a result, a payment is made to the non‑member spouse (or to his or her legal personal representative if he or she has died); and
 (c) the payment, if it had been made to the original payee, would have been an eligible termination payment under a paragraph of the definition of eligible termination payment in subsection 27A(1);
then the payment is taken to be an eligible termination payment (the new ETP) in relation to the non‑member spouse under that same paragraph.

Example: A has a superannuation interest that is subject to 2 payment splits in respect of A's marriages to B and C (in that order). The first payment split provides for a 60% share to B and the second payment split provides for a 50% share to C.

 Assume that any payment to B or C would have been an eligible termination payment for A (if the payment had been made to A). A becomes entitled to a splittable payment of $100.

 By applying subsection (1) in relation to the first payment split, B gets an eligible termination payment of $60.

 By applying subsection (1) in relation to the second payment split, C gets an eligible termination payment of $20.

Calculation of components of new ETP

 (2) Each identified component of the new ETP is to be worked out in accordance with the following formula:
where:

corresponding amount means the amount that would have been that component if the whole of the pre‑split amount had been an eligible termination payment in relation to the original payee.

pre‑split amount means the amount to which the payment split was applied.

Example: To continue the example in subsection (1), assume A's undeducted contributions (one of the identified components) are $40.

 In relation to B, the pre‑split amount is $100 (the amount of the splittable payment). The undeducted contributions component of B's eligible termination payment is:

 The other identified components of B's eligible termination payment are worked out in a corresponding way.

 In relation to C, the pre‑split amount is $40 (the original amount of $100 less the $60 paid to B under the first payment split). A's undeducted contributions have been reduced to $16. The undeducted contributions component of B's eligible termination payment is:

 The other identified components of C's eligible termination payment are worked out in a corresponding way.

 (3) For the purposes of working out all the components of the new ETP, the number of days in the eligible service period is taken to be zero.

ETP