Equal opportunities for same sex couples
A Same-Sex Relationships (Equal Treatment in Commonwealth Laws – Superannuation) Bill has been introduced into Parliament which modifies the definition of ‘spouse’ and ‘child’ for superannuation purposes to include partners and children of same-sex relationships. It is intended to reduce discrimination against same-sex couples. If passed, it will affect who a superannuation death benefit can be paid to, what tax will be applied, tax treatment of death benefit termination payments and eligibility for contributions splitting.
Superannuation definition of ‘spouse’ and ‘child’
The Bill proposes to alter the Superannuation Industry (Supervision)Act 1993 definition of spouse and child to ensure that the partner and child of a same-sex relationship is eligible for the same entitlements and recognition provided for an opposite-sex de facto relationship. The changes are proposed to apply during
the 2008/09 income year, however, due to delays in passing the Bill, the start date is not clear.
The proposed definition of spouse includes persons ‘in a relationship as a couple’, whether they are same sex or different sexes. Further clarification is required to determine what is meant by the phrase ‘in a relationship as a couple.’ The change would:
enable that person to be nominated as a dependant,
enable their same-sex partner to receive the death benefit without having to satisfy the interdependency or financial dependant criteria,
allow contribution splitting between the couple, and
allow for pensions and lump sums (where allowable).
It is proposed that the definition of ‘child’ will be extended to include a child who is the product of a ‘relationship as a couple’ (whether same sex or different sexes). For a child to be the product of a relationship, they need to be either a biological child
of at least one of the persons (ie conceived utilising the gametes
of the person), or be born to a woman in the relationship (adopted children are already included in the definition of child).
Furthermore, a child who is the product of a person’s previous relationship who is brought into the person’s current relationship cannot be the product of the current relationship.
Effect on taxation
At this stage the general taxation definition of spouse and child is not changing. Transitional provisions have been introduced for certain super death benefits, to apply for the 2008/09 income year only.
The intention is for same-sex discrimination to be reduced in tax law more generally from the 2009/10 income year.
The proposed new superannuation definition of spouse and child
(as above) are also to be used in the definition of death benefit dependant* for
superannuation death benefits and death benefit termination payments, for determining whether a person is entitled to a death benefit anti-detriment payment, and to ensure the commutations of child death benefit pensions
are not subject to tax.
Where to now?
This Bill was passed by the House of Representatives on 4 June 2008. It was introduced to the Senate on 16 June 2008 and has been referred to the Senate Legal and Constitutional Affairs Committee for report by 30 September 2008.
We will have to just wait and see.
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