Bills Digest no. 150 2005–06
Federal Magistrates Amendment (Disability and Death Benefits) Bill
2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Financial Implications
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Federal Magistrates Amendment
(Disability and Death Benefits) Bill 2006
Date introduced: 29 March 2006
House: House
of Representatives
Portfolio: Attorney-General
Commencement: The
Act commences on the day after it receives the Royal Assent.
The purpose of the Bill is to amend the Federal
Magistrates Act 1999 (FMA) to provide statutory disability cover and
death benefits for Federal Magistrates. Current arrangements for Federal
Magistrates provide no specific entitlements in the event of retirement
on the grounds of disability or death.(1)
The Federal Magistrates Court of Australia (FMC) was established by the
Commonwealth Parliament at the end of 1999. It conducted its first sittings
on 3 July 2000. The FMC currently consists of a Chief Federal Magistrate
and 34 other Federal Magistrates. In the 2006-07 budget, the Attorney-General
announced the appointment of another five Federal Magistrates in response
to increases in the general federal and family law jurisdiction and workload
of the Federal Magistrates Court.(2)
The FMA established the Federal Magistrates Court and its jurisdiction
is found in the Federal Magistrates (Consequential Amendments) Act
1999. The jurisdiction of the Federal Magistrates Court includes family
law and child support, administrative law, bankruptcy, unlawful discrimination,
consumer protection law, privacy law, migration, copyright and workplace
relations. The court shares those jurisdictions with the Family Court
of Australia and the Federal Court of Australia. Some work in those jurisdictions
continues to be done in state courts also.
The Government’s intention in the creation of the FMC was that it would
be a low cost court. As a result of this intention, Federal Magistrates
were not covered by the Judges’ Pensions Act 1968. The Judges Pensions
Act applies to Federal, Family and High Court judges.
On 30 March 2006 the Bill was referred to the Senate Legal and Constitutional
Legislation Committee for inquiry and report by 2 May 2006. The Committee
released its report
on 2 May 2006. While welcoming the changes introduced by the bill, the
recommendation of the Committee was to make two amendments to the bill
which would provide greater consistency to benefits payable to Federal
Magistrates.
Current Benefits and Entitlements for Federal Magistrates
Schedule 1 of the FMA covers personnel matters such as the appointment
and removal of Federal Magistrates. A Federal Magistrate is appointed
by the Governor-General and must be a legal practitioner of at least five
years standing. A Federal Magistrate’s term expires when he or she turns
70 unless they resign or are removed by the Parliament on the ground of
proved misbehaviour or incapacity. Federal Magistrates may be appointed
on a full-time or part-time basis except for the Chief Federal Magistrate
who is a full-time appointee.
Schedule 1 of the FMA provides that the Remuneration Tribunal is to determine
the remuneration for Federal Magistrates. A Federal Magistrate’s remuneration
cannot be diminished while he or she is in office.
Terms and conditions for Federal Magistrates are determined by the Governor-General.
These conditions currently include an entitlement to a superannuation
contribution by the Commonwealth. This contribution is limited to 13.1%
of salary and is paid to the Magistrate’s choice of either a complying
superannuation fund or a retirement savings account.
There are currently no provisions which provide adequate income protection
for Federal Magistrates in the event of serious disability. A Federal
Magistrate whose performance is significantly impaired for medical reasons
may thus be unwilling to resign. There is also no lump-sum death benefit
currently payable to a Magistrate’s family if they die in office or are
in receipt of a disability pension.
In comparison, the Judges Pensions Act provides for a pension of 62.5%
of salary to a spouse or dependants on the death of a judge or the death
of a retired judge. When a judge retires due to permanent disability or
infirmity, they are entitled to a pension of 60% of their salary.
In the Second Reading Speech the Attorney-General stated that:
The Bill provides federal magistrates, their spouses
and dependants with income protection and death benefits that have until
now been lacking. The Government acknowledges the significant contribution
federal magistrates make to an efficient federal civil justice system,
and is committed to ensuring that they are provided with fair and adequate
remuneration and conditions.(3)
There has been limited press commentary in relation to this bill.
Justice Kenneth Raphael, currently Australia’s oldest Federal Magistrate
has been highly critical of the proposed amendments, calling them ‘ageist,
homophobic and mean’.(4) His submission
to the Senate Committee provides further detail to these comments.
Justice Ronald Sackville, as chair of the Judicial Conference of Australia
has also commented on the bill and is generally supportive of the changes
which will provide adequate retirement benefits for Federal Magistrates.(5)
Justice Sackville has commented on the procedure required for a Federal
Magistrate to retire on the grounds of permanent disability or infirmity.
The procedure [new clause 9A] may cause uncertainty and a medically
unfit magistrate may be reluctant to retire first and then face the uncertainty
of applying for certification to the minister or the AAT. He suggests
that it would be better for the decision to be made by an independent
body and for that to be done before retirement.(6)
The Federal Magistrates Court of Australia made a submission to the Senate
Committee which was generally supportive of the changes to improve the
remuneration and entitlements of Federal Magistrates.
It is the view of the Court that all judicial officers
should be treated equally in respect of disability and death entitlements.
The Court submits that the simplest way to achieve equality in this
matter is to include Federal Magistrates in the operation of the
Judges’ Pensions Act 1968 (Cth). However, in the absence of this,
other improvements to achieve better entitlements for Federal Magistrates
are welcome. The Federal Magistrates Amendment (Disability and Death
Benefits) Bill 2006 (“Bill”) seeks to make a number of improvements
in the entitlements of Federal Magistrates.(7)
The Australian Democrats (AD) support the recommendations
of the Senate Committee report. They made some additional comments and
points of dissent in the Senate Committee report. The AD noted that the
definitions in the bill discriminate against same sex couples and recommended
the definitions in this bill and other legislation establishing Commonwealth
superannuation and pensions should be expanded to expressly provide for
the provision of benefits where a same sex relationship exists.
The Australian Government Actuary has costed the proposed disability
cover and death benefits at 3% of salaries on average. For the existing
35 Magistrates, the total cost would currently be on average some $250
000 per annum.
It is proposed that the new benefits be funded through a special appropriation
authorised by the Act, as it would not be possible to predict when such
benefits would need to be paid.(8)
Items 1 – 9 insert new terms into the section 5 (definitions)
of the FMA. Some of these terms are defined in greater detail in the following
clauses.
Item 10 inserts new section 5A into the FMA. It defines
prior
judicial service. It makes it clear that where a person held office
as a Federal Magistrate on more than one occasion any service before the
person’s most recent appointment falls within the definition.(9)
Items 11 and 12 insert new headings and divisions into Schedule
1. This provides a structural framework to the Schedule. The current heading
is ‘Personnel provisions relating to Federal Magistrates.’ Item 11
inserts the new heading Appointment of Federal Magistrates which
creates Part 1 of Schedule 1 and covers existing clauses 1-3.
Item 12 inserts new headings after clause 3 of Schedule 1. The
heading Terms and Conditions of Federal Magistrates creates a new
Part 2 of Schedule 1. It also inserts a new Division into that
Part dealing with the terms and conditions of serving Magistrates.
Item 13 inserts a new Division 2 into Part 2 of Schedule
1 to the FMA. The new division provides for disability and death
benefits for Federal Magistrates. The following new clauses provide the
details for the new entitlements.
New clause 9A allows the Minister to certify that a Federal Magistrate
who retires before reaching age 65 is a retired disabled Federal Magistrate.
The Minister can only make the certification following a request and must
be satisfied that the retirement was due to permanent disability or infirmity
[clause 9A (2)]. Where the Minister refuses the certification, the decision
may be reviewed by the Administrative Appeals Tribunal (AAT).
New clause 9B provides for pensions for retired disabled Federal
Magistrates. Pensions are payable until the retired disabled Federal Magistrates
reaches the age of 65 years or dies, whichever happens first. The annual
rate of pension is 60% of the salary the Magistrate would have received
if he or she had not retired.
New clause 9C provides that a retired disabled Federal Magistrate
is only entitled to a Commonwealth superannuation contribution until he
or she reaches the age of 65 years or dies, whichever occurs first.
New clause 9D provides death benefits where a Federal Magistrate
or a retired disabled Federal Magistrate who has not reached the age of
65 dies. The death benefits are payable to an eligible spouse or eligible
children. The amount of death benefits payable is equivalent to the amount
of Commonwealth superannuation contributions the Federal Magistrate would
have been entitled to if the Federal Magistrate had neither died or retired
before the age of 65. Under existing arrangements the Commonwealth makes
a superannuation contribution payment to Federal Magistrates of an amount
equal to 13.1% of salary.
New clause 9E provides relationship definitions for ‘eligible
spouse’ and ‘marital relationship’. These definitions are used to establish
if a person is an eligible beneficiary for a death benefit payment. The
Explanatory Memorandum states:
These definitions, and that included by clause 9F, are
generally consistent with the definitions used in legislation establishing
Commonwealth superannuation and pensions schemes, including those contained
in the Judges’ Pensions Act 1968.(10)
An ‘eligible spouse’ includes only those people which have or have previously
had a ‘marital relationship’ with a Federal Magistrate or retired disabled
Federal Magistrate. A ‘marital relationship’ is defined to only include
heterosexual married and de facto couples. Same sex relationships are
not provided for in the current definitions.
New clause 9F provides a definition for ‘eligible child’. This
definition is used to establish if a person is an eligible beneficiary
for a death benefit payment. The criteria used to establish if a child
is eligible are based on age and dependency.
New clause 9G establishes a special appropriation for pensions
and superannuation contributions payable to retired disabled Federal Magistrates
and death benefits payable to eligible spouses and children. The establishment
of a special appropriation is necessary as it is not possible to predict
when such benefits will need to be paid.(11)
Item 13 also introduces new division of Part 2 of Schedule 1 Remuneration
of a Federal Magistrate not to be diminished. Clause 9H replicates
existing clause 11 of Schedule 1 and prohibits a Federal Magistrate’s
remuneration being reduced while in office.
Item 14 introduces a new heading Acting Chief Federal Magistrate
establishing Part 3 of Schedule 1. The heading will appear before
existing clause 10 of Schedule 1 which allows the Minister to appoint
an acting Chief Federal Magistrate in certain circumstances.
Item 15 inserts a technical item which relates to the reorganisation
of existing provisions within the new structural framework of Schedule
1. The item repeals clause 11 of Schedule 1 which is replicated in new
clause 9H.
Item 16 provides that the amendments only apply to persons
who are Federal Magistrates at the time the amendments commence or who
are appointed after that time.(12)
The amendments in the Bill go some way to providing improved conditions
for Federal Magistrates. The new conditions may make appointments to the
position of Federal Magistrates more attractive. However, there has been
some criticism that the amendments are discriminatory and financially
inequitable when compared to judicial officers who are covered by the
Judges’ Pensions Act.
The appointment of a Federal Magistrate is until 70 years of age. The
age limitations for entitlements provided for in new sections 9A, 9B,
9C and 9D appear to discriminate against Federal Magistrates and retired
disabled Federal Magistrates between the ages of 65 and 70. This point
was noted in some of the submissions to the Senate Committee and in the
Senate report. The Senate Committee recommended that the age limits specified
in the Bill limiting eligibility for disability cover and death benefits
be amended from 65 to 70 years.
The amount of death benefits payable to an eligible spouse and children
are not as generous as those payable under the Judges’ Pensions Act. The
Senate Committee recommended that the amount of death benefits payable
under the Bill be reviewed to provide more adequate compensation payments.
Some of the submissions(13) to the Senate Committee were of
the view that it would be far simpler and equitable to allow the Judges
Pensions Act to apply to the Federal Magistrates. However, there are no
costings available on this alternative proposal.
-
Hon. Phillip Ruddock MP, Attorney-General, ‘Second reading speech:
Federal Magistrates Amendment (Disability and Death Benefits) Bill
2006’ House of Representatives, Debates, 29 March 2006,
p. 7.
-
Hon. Phillip Ruddock MP, Attorney-General
increased access to justice News Release 9 May 2006
http://www.ag.gov.au/agd/WWW/rwpattach.nsf/VAP/(1E34438A184496CEA370A0C8D75B1710)~15+Increased+access+to+justice.PDF/$file/15+Increased+access+to+justice.PDF,
accessed 1/6/06
-
Ruddock, Second Reading Speech op. cit. p. 8.
-
Cath Hart ‘Magistrates’
pension scheme ‘ageist, homophobic and mean’, The Australian 28/04/06
p. 23.
-
Justice Ronald Sackville ‘Fair
pensions ensure judicial independence’, The Australian 21/04/06
p. 22.
-
ibid.
-
Federal Magistrates Court of Australia. Submission
to the Senate Legal and Constitutional Legislation Committee. Inquiry
into the provisions of the Federal Magistrates Amendment (Disability
and Death Benefits) Bill 2006. 19 April 2006.
-
Explanatory Memorandum p. 2.
-
ibid., p. 4.
-
ibid., p. 6.
-
ibid., p. 8.
-
ibid., p. 8.
-
Victorian Bar submission;
Federal Magistrates Court of Australia submission
to the Senate Legal and Constitutional Legislation Committee. Inquiry
into the provisions of the Federal Magistrates Amendment (Disability
and Death Benefits) Bill 2006.
Catherine Lorimer
13 June 2006
Bills Digest Service
Parliamentary Library
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ISSN 1328-8091
© Commonwealth of Australia 2006
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