These changes surfaced following a landmark report by the Human Rights and Equal Opportunity Commission in 2007 to extend the meaning of ‘de-facto’ to include same-sex relationships.

s part of the Rudd government’s election promises, the bill took less than a year to pass through the Senate and brings long-awaited equality to same sex-couples in areas including superannuation, taxation, social security, Medicare, veteran’s affairs, workers compensation and education.

Focusing on superannuation, the Same-Sex Relationships (Equal Treatment in Commonwealth Laws-Superannuation) Act 2008 received Royal Accent on 4 December 2008. The Act amends the Superannuation Industry (Supervision) Act 1993 (‘SIS Act’) allowing regulated super funds to recognise same-sex relationships from 1 July 2008.

Importantly, this Act changes the definition of ‘spouse’ by replacing the words ‘as husband or wife of the person’ with ‘in a relationship as a couple (whether the persons are the same sex or different sexes)’. This change will mean that ‘spouse’ will include a person who is in a relationship as a couple with another person irrespective of their gender. It also amends related taxation legislation affecting super death benefits, death benefit termination payments and other Acts that regulate the super industry. To summarise:

• the definition of ‘spouse’, ‘child’ and ‘relative’ in the ‘SIS Act’ and other super legislation has been extended to include same-sex partners and their children
• the definitions of ‘dependant’ and ‘spouse’ in the income tax laws have been amended to include same-sex partners and their children for anti-detriment payments made by a super fund
• same-sex partners and their children are treated as dependants for the purposes of the taxation of superannuation death benefits and death benefit termination payments.

So what does this mean?

In terms of superannuation benefits, same-sex couples can now leave their entitlements to their partner or their partner’s children upon death. The payment can be in the form of a tax-free lump sum, or a reversionary pension. In determining the tax treatment of the pension, the age of the deceased, the age of the dependant, and whether the fund was a taxed or untaxed fund, all need to be assessed. If a lump sum is paid, an anti-detriment payment can also be claimed.

An anti-detriment payment is an amount paid as compensation for the contributions tax paid by the deceased member. The law also enables a member of a same sex couple to make superannuation contributions to their partner’s super. The contributions (known as spouse contributions) are to be treated as non-concessional contributions and therefore, they will not attract contribution tax. It also enables ‘contribution splitting’. This allows a super fund member to apply to their fund to transfer certain concessional contributions (commonly employer contributions) to their spouse’s super account.
This allows the member to boost their same-sex spouse’s retirement savings.

What do you need to do?

If this legislative change is applicable to you and you run a Self Managed Super Fund (SMSF) you should consider amendments to your superannuation fund trust deed and changes to your procedures in relation to the payment of death benefits. Alternatively, if you are a member of a public offer fund, you should contact your fund and advise them of any change you would like to make to your current death benefit nomination.

For more information on this please contact our office.

Josh Davis
Consultant
jdavis@moorestephens.com.au