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Same-Sex: Same Entitlements: Chapter 13

Same-Sex: Same Entitlements Report


 

Chapter 13. Superannuation

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13.1 What

is this chapter about?

This chapter focuses on discrimination against

same-sex couples and their families in the context of superannuation.

Superannuation is one of the main ways of

saving for retirement. It is designed to provide financial security for

individuals and their families in retirement; or when a person dies

unexpectedly.

Superannuation is often a

person’s largest asset apart from the family home. Most people expect that

their superannuation entitlements will be inherited by a partner, children or

other dependants. But for people in same-sex couples and families, this is not

always the case.

The same-sex partner of a

member of a private superannuation fund may receive superannuation death

benefits if he or she can establish an ‘interdependency

relationship’ with, or financial dependence on, the deceased member of the

fund. However, the ‘interdependency’ and financial dependence

categories impose more onerous qualifying criteria than for an opposite-sex de

facto couple in the same position.

The same-sex

partner of a federal government public servant will not get any direct access to

superannuation death benefits, unless his or her partner joined the public

service after 1 July 2005. This is because a same-sex partner does not qualify

as a ‘spouse’ under the relevant legislation.

Further, a same-sex partner may not get the

same tax benefits for superannuation contributions and earnings as an

opposite-sex partner (in either private or federal government

funds).[1] Some tax concessions flow

onto ‘dependants’ who inherit superannuation death benefits and this

may include a same-sex partner in some circumstances. However, other tax

concessions are only available to a ‘spouse’. The definition of

‘spouse’ under the relevant tax legislation and federal government

superannuation schemes excludes a same-sex

partner.

Finally, the child of a same-sex

couple may not be entitled to the same superannuation benefits and tax

concessions as a child of an opposite-sex couple. This is because of the

definition of ‘child’ in the relevant

legislation.

This

chapter explains how private, federal and state superannuation schemes

distribute benefits to same-sex couples and families. The chapter commences with

a discussion of superannuation death benefits as this was the issue most

frequently raised in submissions to the Inquiry. It also addresses a range of

other superannuation entitlements and tax concessions which put same-sex couples

at a significant financial disadvantage before and after retirement.

The chapter finds that the discrimination

against same-sex couples in superannuation laws amounts to a breach of human

rights. It then goes on to recommend amendments to the laws in order to avoid

future discrimination.

Specifically the chapter

addresses the following questions:

  • Can the surviving same-sex partner of a federal public

    servant access superannuation death benefits?

  • Can the surviving same-sex partner of a member of a state

    public sector superannuation scheme access member death benefits?

  • Can the surviving same-sex partner of a private

    superannuation scheme member access superannuation death benefits?

  • Can a surviving same-sex partner access death benefit tax

    concessions?

  • Can a same-sex couple take advantage of superannuation

    contributions splitting?

  • Can a same-sex couple access the superannuation spouse

    tax offset?

  • Can the surviving same-sex partner of a judge access a

    judicial pension?

  • Can the surviving same-sex partner of a Governor-General

    access an allowance?

  • Do superannuation laws breach human rights?
  • How should the law be changed to avoid future human

    rights breaches?

13.2 Can

the surviving same-sex partner of a federal public servant access superannuation

death benefits?

One of the main purposes of superannuation schemes is

to encourage savings during life which will support a person’s family

after he or she dies. Superannuation law ensures this support by providing for

the payment of death benefits directly to the deceased’s

dependants.[2]

However, the same-sex partner of a federal

government public servant is not entitled to death benefits, unless the deceased

joined the public service after 1 July 2005. This is because they do not qualify

as a ‘spouse’ or a person in a ‘marital relationship’

under any of the various statutes which govern the relevant federal government

superannuation schemes. In comparison, an opposite-sex de facto partner will

qualify under all relevant

legislation.

Further, because of the definition

of ‘child’, a person born to a same-sex couple will generally only

qualify for death benefits if the child’s birth mother or birth father

dies. The child will usually not qualify for death benefits on the death of his

or her lesbian co-mother or gay co-father.

13.2.1 All

but one federal superannuation scheme discriminates against same-sex

families

The following federal government superannuation

schemes exclude the surviving partners of a same-sex couple from receiving death

benefits. They may also exclude the child of a lesbian co-mother and gay

co-father:

  • Commonwealth Superannuation Scheme (CSS)
  • Public Sector Superannuation Scheme (PSS)
  • Defence Forces Retirement and Death Benefits Scheme

    (DFRDB)

  • Military Superannuation and Benefits Scheme

    (MSBS)

  • Parliamentary Contributory Superannuation Scheme

    (PCSS)

  • Judges’ Pension Scheme

Table 1 at the end of this chapter

summarises the legislation governing each federal government superannuation

scheme, the definitions which exclude a surviving same-sex partner or child, and

the benefits for which same-sex couples are ineligible because of those

definitions.

The only federal superannuation

scheme which does not discriminate against a surviving same-sex partner is the

Public Sector Superannuation Accumulation Plan

(PSSap).[3] This federal scheme covers

employees hired on or after 1 July 2005. The PSSap Trust Deed has adopted the

‘interdependency relationship’ category, which is discussed in the

context of private superannuation schemes in the following

sections.[4]

3.2.2 ‘Spouse’

and ‘marital relationship’ exclude a same-sex couple

The cause of the discrimination against a surviving

same-sex partner lies in the various legislative provisions which define a

‘spouse’ or a person in a ‘marital relationship’.

By way of example, these terms are examined in

the context of the definitions in the Superannuation Act 1976 (Cth)

(Superannuation Act 1976) which governs the Commonwealth Superannuation Scheme

(CSS).

Under that legislation, a person will be

entitled to death benefits if the person is a ‘spouse who survives a

deceased person’. This means that the person must have had a

‘marital relationship’ with the

deceased.[5]

A person will have had a ‘marital

relationship’ if:

...the person ordinarily lived with that other person as

that other person's husband or wife on a permanent and bona fide domestic

basis at that

time.[6]

In

1994, Mr Gregory Brown applied for the spouse benefit when his same-sex partner

died. When he was denied the benefit he appealed to the Administrative Appeals

Tribunal. In considering whether this definition could include a surviving

same-sex partner, the Tribunal held that:

There is no doubt that the applicant and [his same-sex

partner] had a close marriage-like relationship and that they conformed to the

requirements of sections 8A in all respects except for their

gender.[7] (emphasis

added)

Thus the definitions of

‘spouse’ and ‘marital relationship’ under the various

federal superannuation schemes require the couple to be of the opposite-sex.

13.2.3 Only

a ‘spouse’ can access a reversionary pension

Many federal government superannuation schemes offer

death benefits to the surviving ‘spouse’ or ‘child’

either as a reversionary pension or a lump sum payment. A reversionary pension

is usually worth much more to the survivors than a lump sum.

However, if there is no qualifying spouse or

child, a lump sum payment can be made to an

estate.

A same-sex partner can only ever

inherit a death benefit through the estate of his or her partner. So a same-sex

partner will only ever qualify for an amount equal to the lump sum. And a

superannuation lump sum payment made to a non-dependant through an estate is

taxed more heavily than a lump sum payment made directly to a dependant (see

further section 13.5 below).

Gary Fan and

Wayne Lodge clearly realised this predicament:

...we are both members of the PSS (a Comsuper administered

defined benefit fund), which expressly denies recognition of each other as

significant dependents for the purposes of pensions, death benefits etc. by

defining a spouse as a member of the opposite sex. Should one of us die, then we

would only be able to inherent the death benefit via our wills/estate, with a

much higher taxation treatment of that

benefit.[8]

13.2.4 Negative

financial consequences for federal public servants

Good Process provide an example demonstrating that a

lump sum paid to an estate is less valuable to a dependant than a reversionary

pension:

If there are no other eligible beneficiaries, a lump sum

can be paid to the estate and distributed to the same-sex partner. However, the

lump sum is worth far less then a ComSuper pension.

For example, a $500,000 lump sum could buy a commercial

pension of $23,697 (male 55 year old). However, investing a lump sum would mean

taking on an investment risk and would involve management of the investment and

payment of all associated investment fees.

In contrast, as a surviving ‘eligible spouse’

of a ComSuper PSS member, a notional $500,000 lump sum would entitle the person

to a guaranteed pension of $30,454 fully indexed for their entire life (67% of the original member’s pension if they stayed in the scheme until

age 60). No fees are charged by ComSuper to manage the

pension.[9]

The

Association of Superannuation Funds of Australia outline the impact of

discrimination in the CSS both when a member dies in service and when the member

dies in the pension phase.

[If a]... member dies in service, their spouse... would

receive an indexed pension and the option of a lump-sum or a non-indexed

pension. The same-sex partner ... of a member who dies in service does not

receive a pension in the event of the death of their partner. If there is no

eligible beneficiary a lump sum will be paid to the estate of the deceased

person... The lump sum paid from an estate may be taxed unless the recipient can

prove financial dependency under the [Income Tax Assessment Act 1936 (Cth)]. The lump sum may not be sufficient to purchase [the equivalent of a

pension] with annual payments, security and fees comparable to the CSS.

A 55 year old CSS member (with a spouse aged 55), dies in

service after 20 years service. The member has a member financed benefit of

$100,000 and a Superannuation Guarantee component of $20,000 and was on a salary

of $70,000 at date of death. The member’s spouse may have the option of an

indexed pension of $23,450 and a lump sum of $100,000 or a pension of $32,830

($23,450 indexed and $9,830 non-indexed). If the member instead had a same-sex

partner there would have been no benefit entitlement but a lump sum of $120,000

would be payable to the member’s estate. This lump sum would purchase a

lifetime indexed pension/annuity of approximately $5690 from a commercial

provider.[10]

In other words, the surviving partner of a same-sex

couple might receive approximately $27,000 per year less than the member of an

opposite-sex couple.

Where the... member dies [after retirement while receiving

a pension], their spouse would receive a reversionary pension equivalent to 67%

of the deceased member’s pension. If there is no spouse or eligible child

reversionary beneficiary, there is no benefit payable to any other person or to

the estate.

On retirement, a CSS pensioner member aged 65, with 30

years service and on a final salary of $70,000 took their whole entitlement to a

lifetime pension as a part indexed and part non-indexed pension. The annual

pension is $49,000 ($35,000 indexed pension plus $14,000 non-indexed pension).

On their death, their spouse would receive a lifetime pension of $32,830 (part

indexed and part non-indexed pension), or 67% of the entitlement the pensioner

was receiving at their death. If the pensioner has a same-sex partner, that

partner would receive no entitlement and no residual benefit would be payable to

the pensioner’s

estate.[11]

So

the surviving partner of a same-sex couple would receive nothing, while the

surviving partner of an opposite-sex couple would receive $32 830 per

year.

13.2.5 Negative

personal impact on federal public servants

A considerable number of submissions to the Inquiry

expressed concern about the discriminatory treatment of same-sex couples by

federal government superannuation funds. For example, the Gay and Lesbian Rights

Lobby (NSW) told the Inquiry that:

Despite a commitment from the Government, public sector

funds have not incorporated the category of ‘interdependency’,

meaning that public sector and military employees who are in a same-sex

relationship cannot nominate their same-sex partner of their beneficiary for any

super death benefits. Instead they must distribute their benefit to their

partner through their estate, which attracts a higher rate of

tax.[12]

People still working for the federal

government expressed concern that they could not name their partner as a

beneficiary, that the only way their partner could receive their superannuation

benefit was as a lump sum payment through their estate. For example:

[I] soon discovered that I was unable to join another

superannuation scheme, and after contacting the PSS, it was confirmed that I

could not put my same-sex partner down as a beneficiary. I was left with no

choice but to contribute to the PSS and put my mother as my beneficiary. I

write to you to highlight the real consequences that the Commonwealth’s

active discrimination of people in same-sex relationships have had in my life. I

felt sick when I realised that once again the loving and supportive relationship

I had with my same-sex partner, was not supported by the legal and social

systems under which I conduct my daily life. It is extremely unnerving to not

feel the protection of the state, and subsequently the approval of

society.[13]

Retired fund members were also acutely aware

of their predicament. For example Barbara Guthrie and Maureen Kingshott

said:

In recent years, we have each commuted our Commonwealth

PSS superannuation to a pension. We are thus directly affected by the

Commonwealth’s failure to extend the 2004 amendment broadening the

definition of ‘dependant’ to its own superannuants in same-sex

relationships. We understand that this means that when one of us dies, the

other will not be entitled to receive a reversionary

pension.[14]

Another

federal government retiree said:

I retired six years ago after [many] years in the

Commonwealth Public Service. The Commonwealth Superannuation Scheme provides

for a death benefit to be paid to a spouse if he/she has had a ‘marital

relationship’ at the time of the superannuant’s death. I understand

that the benefit would be a pension based on 67% of my ‘potential

invalidity entitlement’. Unfortunately for my male partner, a martial

relationship is restricted to two people of the opposite sex. If my partner was

female and we were married or had lived together in a permanent and bona fide

relationship for at least 3 years, he’d qualify. The criteria that is used

to determine that a marital relationship exists covers the length of the

relationship, financial dependence, children, and joint property ownership. We

would have no trouble meeting these criteria if the definition of spouse was

extended to a same-sex partner. Apart from children, our lives are very similar

to our heterosexual neighbours. The main difference is that we have no

children. We have had a loving, committed, supportive relationship for [a

substantial period of time]. It’s simply unfair and discriminatory that

we don’t have equality with my straight retired

colleagues.[15]

Other

submissions expressed a similar degree of frustration at the manner in which

federal government superannuation funds discriminated against them:

As a federal public servant, I [name withheld] am required

[to] pay superannuation into either PSS or CSS (I am with PSS), but I am unable

to nominate my partner as beneficiary as these schemes do not recognise same sex

relationships. I have willed my superannuation to my partner [name withheld] in

the event of my death, but whether that occurs will only be seen should I die.

Why do Comsuper schemes not allow same sex couples to nominate their partners as

beneficiaries? If I had personal superannuation (I am entitled to, but

don’t see the point in splitting super across multiple funds –

particularly when the Comsuper schemes have a guarantee of no negative returns)

I could nominate [my partner], but not so in the scheme I am forced by law to be

part of. The law says I must pay into the scheme and also says –

“your same sex partner will not be getting any of it”. How unfair

is that?[16]

Given the age of my partner and myself, the possibility of

one of us dying in the next ten years is not insignificant. If that happens, the

surviving partner will not receive any death benefit payments from the deceased

partner’s superannuation. I could accept that if other members of those

schemes faced the same dilemma, but of course they do not. Former military or

public service members who have a partner of the opposite sex automatically

receive death benefit entitlements... Granting me and my partner superannuation

death benefits will not bring about the collapse of my neighbours’

marriages, nor lower their income, nor make their roses wilt. There is no

logical reason to maintain this discrimination; it is being maintained out of

ideological spite... We are all citizens and there should not be one

superannuation law for my brother and a different superannuation law for

me.[17]

13.2.6 Federal

government budget concerns

Several submissions to the Inquiry reported

correspondence with the Minister for Finance regarding discriminatory federal

government superannuation funds.[18]

However, correspondence provided to the

Inquiry by the Superannuated Commonwealth Officers Association, indicates that

budgetary implications need to be examined before any decision is made:

The issue of extending eligibility for death benefits in

[the CSS and the PSS] to persons in an interdependency relationship with a

scheme member is being examined. However, because of the design of these schemes

a number of technical matters and also Budgetary considerations need to be fully

examined before any decision could be

made.[19]

nother

submission to the Inquiry reported similar correspondence with the Minister for

Finance:

I also have a letter from Senator Minchin addressed to the

both of us which basically states that even taking the “interdependent

relationship” avenue for giving [name withheld] [my partner] access to my

PSS death benefit, the federal government was of the opinion that the cost of

allowing this (ie.. allowing same sex couples equality under Comsuper rules) was

far too great.[20]

13.3 Can

the surviving same-sex partner of a state public sector superannuation scheme

member access death benefits?

It appears to the Inquiry that same-sex couples can

now generally access the same benefits as opposite-sex couples under state and

territory public sector superannuation legislation. This is because of general

reforms recognising same-sex couples under state and territory law (see further

Chapter 4 on Recognising Relationships).

However, research indicates that there may

still be some discriminatory definitions in the legislation listed below. The

Inquiry has not had sufficient resources to investigate whether there has been

subsequent law or policy removing any remaining discriminatory impact of this

legislation. Further, the Inquiry has not had the resources to investigate

whether the children of same-sex couples may be impacted by this

legislation.

The Inquiry therefore urges all

state and territory authorities to review this legislation, and any other

superannuation legislation, to ensure the elimination of any discrimination

which may still exist.

New South Wales

  • Coal and Oil Shale Mine Workers (Superannuation) Act

    1941 (NSW)

  • Local Government and Other Authorities

    (Superannuation) Act 1927 (NSW)

  • New South Wales Retirement Benefits Act 1972 (NSW)
  • Public Authorities Superannuation Act 1985 (NSW)
  • Transport Employees Retirement Benefits Act 1967 (NSW)

Victoria

  • Coal Mines (Pensions) Act 1958 (Vic)

Western Australia

  • Superannuation and Family Benefits Act 1938 (WA)

In addition, the Equal Opportunity

Commission of Victoria (EOCV) pointed out to the Inquiry that even though

discrimination has been removed for a same-sex partner who died after the

reforms:

...the new, non-discriminatory provisions only apply to

members who ‘become entitled’ to superannuation benefits or pensions

(that is, when their super entitlements vest) after the amendments came into

operation. Therefore members who “became entitled to their benefits”

prior to the Relationships Acts amendments (either by retiring and in receipt of

a pension or death [benefit]) could not have their benefits or entitlements

subsequently vest with their same-sex partners. This means that discrimination

still occurs where, for example, a same-sex couple member who retired prior to

the amendments commencing, was receiving a pension from his or her scheme and

dies after the amendments commenced would be prohibited from having a

reversionary pension or other benefit pass to their surviving same-sex domestic

partner.[21]

The

EOCV argues that:

Provisions enabling reversionary pensions or death

benefits to vest with domestic partners should apply by reference to the date of

death of a superannuant or pensioner and not the date a super member became

entitled to their benefits. Furthermore, a scheme should be established to

enable provision for bereaved same-sex partners in necessitous circumstances

where the past discriminatory laws denied them the super benefits that would

otherwise have accrued or reverted to them had they been in a heterosexual

relationship.[22]

Similar

provisions exist in superannuation legislation in other states and

territories.[23]

13.4 Can

the surviving same-sex partner of a private superannuation scheme member access

superannuation death benefits?

The Superannuation Industry (Supervision) Act

1993 (Cth) (Superannuation Industry Act) governs who can receive a death

benefit in private superannuation schemes.

The Superannuation Industry Act highlights

that one of the main purposes of superannuation is to provide death benefits

directly to the ‘dependant’ of a deceased superannuation

member.[24] The federal government

seeks to encourage contributions to superannuation schemes by providing

significant tax concessions for death benefits paid to a dependant directly or

via the estate of the deceased fund

member.

Since 1 July 2004, the Superannuation

Industry Act has provided that a same-sex partner may qualify as a

‘dependant’ if the couple meets the criteria for an

‘interdependency relationship’ or if he or she can establish

financial dependency on the deceased. A member of an opposite-sex couple will

qualify as a ‘dependant’ if he or she meets the criteria of a

‘spouse’.
A child born to an

opposite-sex couple will also qualify as a ‘dependant’. But a child

born to a same-sex couple will only qualify as the ‘dependant’ of

the birth mother or birth father (not the lesbian co-mother or gay co-father)

unless he or she can establish financial dependency on the

deceased.

The same-sex partner or child of a

deceased superannuation member who is not a dependant of the deceased could also

receive death benefits through the estate of the deceased (if no other person

qualified as a ‘dependant’). However, any such payment would only be

made at the discretion of the trustee. Further, only a lump sum payment can be

paid to the estate and this is generally worth less than a reversionary pension

that can be paid to a ‘dependant’. Further, a death benefit paid to

an estate will only attract the tax concessions available to benefits paid

directly to a ‘dependant’ under superannuation legislation if the

recipient is also considered a ‘dependant’ under the relevant

taxation legislation.[25] Thus it is

financially important for same-sex families to qualify as a

‘dependant’ in the same way as opposite-sex families.

13.4.1 A

same-sex partner may be a ‘dependant’ for the purposes of death

benefits in private funds

The definition of ‘dependant’ in the

Superannuation Industry Act includes:

  • a ‘spouse’ of the deceased

    person[26]

  • a ‘child’ of the deceased

    person[27]

  • a person in an ‘interdependency

    relationship’ with the deceased

    person[28]

  • a dependant in the ordinary sense of the word,

    generally referring to a person who was partly or wholly financially dependent

    on the

    deceased.[29]

(a) A

same-sex partner cannot be a ‘spouse’

Under the Superannuation Industry Act, a

‘spouse’ includes a person who:

although not legally married to the person, lives with the

person on a genuine domestic basis as the husband or wife of the

person.[30]

As noted above, the Administrative Appeals

Tribunal has held that a reference to ‘husband or wife’ requires the

couple to be of the

opposite-sex.[31]

Furthermore, the Superannuation Complaints

Tribunal believes that any attempt to amend a superannuation trust deed to

include same-sex partners within the definition of ‘spouse’, would

potentially breach the Superannuation Industry

Act.[32]

(b) A

same-sex partner may be in an ‘interdependency

relationship’

In July 2004 both the Superannuation Industry Act and

the Income Tax Assessment Act 1936 (Cth) (Income Tax Assessment Act 1936)

were amended to introduce the category of ‘interdependency

relationship’ within the definition of ‘dependant’. This

opened the door for same-sex partners to qualify as a ‘dependant’ if

they could not establish financial

dependency.

However, it is important to note

that although these amendments permit a superannuation trustee to include

same-sex couples by adopting the category of ‘interdependency

relationship’, the law does not require them to do

so.[33] Same-sex couples may

therefore still be at a disadvantage in some superannuation trust

deeds.

Further, the amendments in the

Superannuation Industry Act apply to private superannuation funds only. The

interdependency relationship category does not apply to most federal government

superannuation schemes, as discussed above.

Finally, as discussed below, a same-sex

partner may have a harder time qualifying as a person in an

‘interdependency relationship’ than an opposite-sex partner has in

qualifying as a ‘spouse’.

Nevertheless, same-sex couples may qualify for

death benefits under the following definition of ‘interdependency

relationship’:

2 persons (whether or not related by family) have an interdependency relationship if:

(a) they have a close personal relationship; and

(b) they live together; and

(c) one or each of them provides the other with financial

support; and

(d) one or each of them provides the other with domestic

support and personal

care.[34]

This

definition is used both in the Superannuation Industry Act and relevant tax law

(discussed in section 13.5 below).

(c) A

same-sex partner may be ‘financially dependent’

According to the Superannuation Complaints Tribunal,

the definition of ‘dependant’ in both the Superannuation Industry

Act and the Income Tax Assessment Act 1936 extends to those who are

‘financially dependent’, in the ordinary meaning of

‘dependant’.[35]

This category of financial dependency may

continue to be important for surviving same-sex partners where a fund has not

adopted the interdependency provisions. Further, in some cases it may be easier

to prove financial dependency than an ‘interdependency

relationship’.

The Association of

Superannuation Funds of Australia (ASFA) outlines what it believes is required

for a person to be ‘financially dependent’:

  • unless the trust deed provides otherwise, partial

    financial dependency is sufficient

  • unless the trust deed provides otherwise, financial

    interdependency is sufficient

  • a person does not have to prove they were in financial

    need to establish dependency

  • the mere provision of gifts and loans does not establish

    financial dependency

  • if a relationship has broken down, but there is

    still some degree of financial dependency, a claimant may not qualify as a

    spouse, but would possibly qualify as a financial

    dependant.[36]

The

Australian Taxation Office may apply a stricter approach to financial

dependency. In some cases, significant or full financial dependency is required:

‘where a person is wholly or substantially maintained financially by

another person’.[37]

(d) A

‘child’ generally includes a birth child only

‘Child’ is defined in the Superannuation

Industry Act and the Income Tax Assessment Act 1936 to include an adopted child,

step-child or ex-nuptial child.[38]

Chapter 5 on Recognising Children notes that

when children are born to a lesbian or gay couple, their parents may include a

birth mother, lesbian co-mother, birth father or gay

co-father(s).[39]

Chapter 5 also explains that definitions of

‘child’, like those in the Superannuation Industry Act and the

Income Tax Assessment Act 1936, will generally include the child of a

birth mother or birth father but exclude the child of a lesbian co-mother

or gay co-father (in the absence of

adoption).[40]

The children of a lesbian co-mother or gay

co-father may be able to claim a death benefit as a ‘dependant’ if

they are financially dependent on the deceased co-mother or

co-father.[41] However, the child of

a birth mother or birth father will automatically qualify whereas the child of a

lesbian co-mother or gay co-father will have to prove financial dependence.

13.4.2 It

is harder to prove an ‘interdependency relationship’ than a de facto

‘spouse’ relationship

The main way a same-sex partner will qualify as a

dependant for superannuation purposes is through proving the existence of an

‘interdependency relationship’.

Several submissions to the Inquiry suggest

that both the criteria and the process for proving an ‘interdependency

relationship’ are unduly onerous. They highlight that it is more difficult

to prove an ‘interdependency relationship’ than to prove an

opposite-sex married or de facto relationship for the purpose of qualifying as a

‘spouse’.[42]

(a) General

criteria to prove an opposite-sex partner is a

‘spouse’

In

the case of a married person, a copy of the marriage certificate is sufficient

proof that a person is a ‘spouse’ and therefore a

‘dependant’.[43]

A trustee of a superannuation fund needs to be

satisfied that a member of an opposite-sex de facto couple is in a

‘genuine domestic relationship’. The following criteria are

considered relevant in making this assessment:

(a) the duration of the relationship;

(b) the nature and extent of the common

residence;

(c) whether or not a sexual relationship

existed;

(d) the degree of financial interdependence, and any

arrangements for support, between or by the parties;

(e) the ownership, acquisition and use of

property;

(f) the procreation of children;

(g) the performance of household duties;

(h) the degree of mutual commitment and

support;

(i) reputation and ‘public’ aspects of the

relationship.[44]

These

criteria are not listed in the Superannuation Industry Act but were developed

through case law. No one of the above criteria is determinative of the existence

of the relationship. The Superannuation Complaints Tribunal adopts the common

law interpretation of these criteria which generally requires that the couple

must live

together.[45]

(b) Prescriptive

criteria to prove that a same-sex partner is in an ‘interdependency

relationship’

The criteria for establishing an

‘interdependency relationship’ is much more prescriptive than the

general criteria for proving a genuine domestic relationship for opposite-sex

couples.

A same-sex couple must prove all of

the criteria set out in the definition of ‘interdependency

relationship’ in the Superannuation Industry Act. This means that a

surviving member of a couple must establish:

  • a close personal relationship and
  • they live together and
  • financial support and
  • domestic support and
  • personal

    care.[46]

In

addition, superannuation trustees must consider the following factors set out in

the Superannuation Industry (Supervision) Regulations 1994 (Cth) (Superannuation

Regulations) before conferring a death benefit on a person in an

‘interdependency relationship’:

(a) all of the circumstances of the relationship between

the persons, including (where relevant):

(i) the duration of the relationship; and

(ii) whether or not a sexual relationship exists; and

(iii) the ownership, use and acquisition of property; and

(iv) the degree of mutual commitment to a shared life; and

(v) the care and support of children; and

(vi) the reputation and public aspects of the

relationship; and

(vii) the degree of emotional support; and

(viii) the extent to which the relationship is one of mere

convenience; and

(ix) any evidence suggesting that the parties intend the

relationship to be permanent;

(b) the existence of a statutory declaration signed by one

of the persons to the effect that the person is, or (in the case of a statutory

declaration made after the end of the relationship) was, in an interdependency

relationship with the other

person.[47]

(c) Additional

criteria to prove an ‘interdependency relationship’

The Superannuation Regulations contain factors which

do not otherwise appear in the statutes or case law regarding opposite-sex de

facto relationships.

These additional criteria

include:

  • the degree of emotional support
  • whether the relationship is one of mere convenience
  • whether the relationship is intended to be

    permanent.[48]

Again, meeting these additional

criteria may make establishing an interdependent relationship more difficult

than establishing an opposite-sex de facto relationship.

(d) ‘Interdependency

relationship’ emphasises a carer role

The hardest element of the legislative definition of

‘interdependency relationship’ for same-sex couples to prove seems

to be ‘domestic support and personal

care’.[49]

However, the Superannuation Regulations

mitigate the impact of these criteria by stating that two people will still be

in an ‘interdependency relationship’ if they have a close personal

relationship, live together, financially support each other and:

one or each of them provides the other with support and

care of a type and quality normally provided in a close personal relationship,

rather than by a mere friend or

flatmate.[50]

This

still requires one member of a same-sex couple to provide significant and

constant care for the other. Examples of relevant care include:

  • significant care provided for the other person when he or

    she is unwell

  • significant care provided for the other person

    when he or she is suffering

    emotionally.[51]

Thus

the interdependency criteria appear to emphasise a ‘carer’

relationship at times of serious illness or trauma rather than a couple-like

relationship.[52] This puts same-sex

couples on a different footing to opposite-sex couples.

(e) Proving

an ‘interdependency relationship’ creates great uncertainty for

same-sex couples

Miranda Stewart argues that the high level of scrutiny

and the degree of proof required to persuade a trustee to exercise discretion in

favour of a same-sex partner:

results in greater uncertainty and injustice for the

surviving same-sex partner, especially where the deceased’s family is

hostile and makes a competing claim for death

benefits.[53]

Several

submissions to the Inquiry expressed concern about the unfairness of having to

prove an interdependency relationship. For example:

  • According to [the Superannuation Industry Act] if

    I was to die, any death insurance that I hold through my superannuation would

    only be paid to my same-sex spouse tax free (up to the pension RBL) if she could

    prove interdependency. When I asked ASFA (Association of Super Funds of

    Australia) and the ATO (Aust Tax Office) how does one prove interdependency,

    they were unable to answer my query, except for stating that my partner would

    (probably) need to show banking records and photos as proof. Why is this

    necessary? Do heterosexual couples need to show banking records and personal

    effects to prove they are in a relationship? I can’t imagine the horror

    that has been or will be faced by many Australian gay or lesbian people, when

    faced by death and subsequent grief of a loved partner to have to then prove

    their relationship status. What an inhumane request, especially seeing as

    though opposite-sex couples do not have to suffer the same

    experience.[54]

  • Same-sex partners ... will ... still have to

    prove to the trustee’s satisfaction that they were in an interdependency

    relationship with the deceased in order for their entitlements to be binding on

    the trustee. This is in stark contrast to opposite-sex spouses, who are

    automatically recognised as dependents and who do not have to endure the

    intrusive process of having to provide private information in order establish a

    claim to the death benefits. Further, until the interdependency relationship is

    proven, a same-sex partner’s entitlement to the death benefit remains in a

    doubt and is at greater risk of challenge by relatives of the

    deceased.[55]

  • I have listed my partner down as the recipient of

    my Super, yet under legislation currently this can be easily challenged. This

    would not be the case for heterosexual couples. If my partner died I

    would have to prove an interdependent relationship, which has been interpreted

    very differently by different courts. There is no clean statement to clear the

    confusion up.[56]

The uncertainty caused by proving an

‘interdependency relationship’ also affects financial planning. For

example, the Inquiry heard:

The 2004 changes to the [the Superannuation Industry Act]

broadened the definition of [‘dependant’] to include

‘interdependency relationships’. While this change is welcome, the

definition still does not offer equal rights to couples in same-sex

relationships as it remains for the partner left behind, on the death of one

member of the couple, to prove that they were indeed in an ‘interdependent

relationship’. If a married couple have full and unquestioned rights to

the benefits of their partner’s superannuation, same-sex couples should

also have these rights. I have named my partner as sole beneficiary of my

superannuation benefits upon my death. However, in order to receive this

benefit, not only will she have to prove that we were life partners, she will

also be at the mercy of the chair of the board of the superannuation company,

who still holds the right to refuse benefit payment. It should not be the

responsibility of a stranger to determine who receives my benefits upon my death

and it is for this reason that I do not salary sacrifice into my superannuation

to provide myself and my family with greater retirement or death benefits

– I have no guarantee that they will actually receive my superannuation

entitlements.[57]

Margie Collins described the inequities that she and

her partner face with superannuation:

Should we now choose to invest in the hope to gain some

retirement wealth, we can’t be sure our super would be available to each

other should one of us die. If it is available, it would only be following legal

action.[58]

(f) ‘Interdependency

relationships’ do not adequately characterise same-sex

relationships

The creation of a separate category for same-sex

couples suggests, in itself, that there is something different about the quality

of a same-sex relationship. And, as indicated above, the interdependency

category emphasises a carer role over a couple

role.

Some submissions to the Inquiry talk

about the indignity of being placed in an ‘other’ category to that

of ‘spouse’:

Does the Tax Act call de facto heterosexual couples as

interdependent? No they are titled and respected as spouses. Does it describe

a married couple as interdependent? No they are titled and respected as

spouses. Surely a same-sex partner should be recognised under [the

Superannuation Industry Act] as a spouse in the same way as heterosexual couples

are.[59]

Some people told the Inquiry that the

interdependency category inadequately represents the nature of their

relationships. For example:

In a general philosophical sense, it causes discomfort,

embarrassment or even anger among lesbian and gay people, that their

relationship should be defined in that way. It’s a lessening, a

diminishment and a failure to acknowledge the depth and sincerity of same-sex

relationships by using that kind of

language.[60]

13.4.3 A

same-sex partner can only nominate a ‘dependant’ as superannuation

beneficiary

Some superannuation funds allow members to nominate a

person as a ‘nominated beneficiary’ in case of the member’s

death. In many superannuation funds, this nomination is not binding but provides

an indication to the trustee of the member’s wishes. Since same-sex

partners do not automatically receive death benefits, some same-sex couples try

to nominate their partner as a beneficiary.

In

some superannuation funds, a binding nomination can be made subject to various

conditions. However, the trustees of a fund are still bound by the provisions of

the Superannuation Industry Act regarding the payment of death benefits to

dependants. This means that in any case, a death benefit nomination will only

bind the trustee if the nominated person is either the member’s

‘dependant’ or legal personal representative (executor of the

estate).[61]

So,

while a nomination indicates the wishes of the deceased member, it does not

necessarily bind the trustee regarding the distribution of the death

benefit.

13.4.4 A

same-sex partner cannot usually receive a reversionary pension

Some superannuation funds pay a reversionary pension

to the surviving dependants of a deceased member. This pension is generally a

portion of the superannuation pension that would have been paid, or was being

paid to the deceased.

However, surviving

same-sex partners are generally not eligible for a reversionary pension. This is

because most trust deeds only pay a reversionary pension to a married or

opposite-sex de facto spouse.[62]

Miranda Stewart explains how reversionary

pensions work as follows:

A member of a superannuation fund may be in receipt of

benefits, after retirement or disability, as a pension (or income stream) from

the fund rather than as a lump sum. A superannuation pension may be

‘reversionary’ such that it will revert automatically to another

nominated person on death of the pensioner. Most trust deeds only allow for

reversion of a pension to a de jure or de facto spouse, which does

not include a partner in a same-sex relationship; as a result, trustees have

refused to pay reversionary pensions to surviving members of same-sex

relationships. As the ‘interdependency relationship’ reform has not

actually amended the meaning of ‘spouse’, an amendment of trust

deeds to include a same-sex partner in this category may breach the

[Superannuation Industry Act]. Under the recent proposals to reform

superannuation, reversionary pensions would be limited by statute to spouses and

would therefore not be allowed for a surviving member in a same-sex

couple.[63]

The

Inquiry heard that ineligibility for reversionary pensions affects the long term

financial planning of same-sex couples:

Under current legislation, a person can nominate a spouse

to continue to receive their pension in the event of their death. When the

pension is set up, a person is able to select a term based on either their or

their spouse’s life expectancy. This assists with managing assets where an

age difference exists between a member of a couple. It also slows the eating

away of capital and is useful if a longer life expectancy is expected or a

selected term is preferred (i.e. to reduce the risk of the survivor outliving

their capital).[64]

13.4.5 A

surviving same-sex partner may access death benefits from a retirement savings

account

A retirement savings account (RSA) is a special

account offered by banks, building societies, credit unions, life insurance

companies and financial institutions. It is used for retirement savings and is

similar to a superannuation

fund.[65]

RSA benefits are available to the

‘dependants’ or personal legal representative of the account

holder.[66] A

‘dependant’ is defined in identical terms to the Superannuation

Industry Act and therefore includes a person in an ‘interdependency

relationship’.[67]

Consequently, a same-sex partner will be

entitled to RSA benefits if an interdependency relationship can be proven or if

he or she can establish financial dependence.

13.5 Can

a surviving same-sex partner access death benefit tax

concessions?

As mentioned earlier, a same-sex partner who does not

qualify for direct payment of death benefits as a ‘dependant’ under

the Superannuation Industry Act, or a ‘spouse’ under the federal

government schemes, may still inherit a partner’s superannuation benefit

through the estate.

In general, death benefits

are tax-free when paid to dependants of the deceased. The rate of tax that a

surviving partner pays on a death benefit thus depends on whether that partner

is considered a ‘dependant’ under the relevant tax law. A person

other than a ‘dependant’ will pay significantly more tax on a

superannuation death benefit received through an estate than a person who meets

the tax law definition of ‘dependant’.

13.5.1 A

same-sex partner may be a ‘dependant’ for tax concession purposes

The definition of ‘dependant’ in the tax

law is essentially the same as the definition under the Superannuation Industry

Act.[68] So, the main difference is

that in the tax law, a child is generally only a dependant if he or she is less

than 18 years of age (however, a child over the age of 18 may qualify as a

dependant if she or he can provide financial dependency).

It has been held that a same-sex partner

is not a ‘spouse’ under the Income Tax Assessment Act

1997.[69]

Thus,

if a surviving same-sex partner qualifies for a direct death benefit as a

‘dependant’ under the Superannuation Industry Act, he or she will

qualify as a ‘dependant’ under the tax law.

The children of a lesbian co-mother or gay

co-father may qualify as a ‘dependant’ under the tax law if they are

financially dependent on the deceased co-mother or co-father. However, the child

of a birth mother or birth father will automatically be entitled whereas the

child of a lesbian co-mother or gay co-father will have to prove financial

dependence.

13.5.2 A

‘dependant’ is eligible for tax concessions on lump sum

superannuation death benefits

The rate at which a superannuation death benefit is

taxed depends on whether the benefit is paid to a ‘dependant’ as

defined in the relevant taxation

legislation.[70]

If

a surviving same-sex partner does not qualify as a ‘dependant’ he or

she will pay a higher rate of tax on a superannuation death benefit received

through his or her partner’s estate.

A

lump sum payment is tax-free when paid to a dependant. If paid to a

non-dependant, any element that has already been taxed is subject to 15% tax,

while any element that has not been taxed is subject to 30%

tax.[71]

From

1 July 2007 a non-dependant can only receive a lump sum payment. In contrast,

for dependants, depending on the terms of the superannuation fund deed, a

superannuation death benefit can be taken as an income stream. Income streams

received by non-dependants, which commenced before 1 July 2007, are taxed at the

same rate as those received by

dependants.[72]

This means that a non-dependant will pay more

tax on a lump sum superannuation death benefit than a dependant.

13.5.3 A

same-sex partner cannot access the death benefits anti-detriment

payment

The 15% superannuation contributions tax was

introduced in 1988. The anti-detriment payment is essentially a reimbursement of

the contributions tax that has been paid by those people who were receiving

death benefits prior to the introduction of the tax in

1988.[73]

In

other words, the anti-detriment payment ensures that death benefits received

prior to and after the introduction of the contributions tax in 1988 are taxed

in the same way.[74]

However, in the case of anti-detriment

payments, a ‘dependant’ is defined to include a ‘spouse’

and ‘child’ but not an ‘interdependency

relationship’.[75] So a

same-sex partner will not be eligible for this payment.

13.6 Can

a same-sex couple take advantage of superannuation contributions

splitting?

Contributions

splitting allows a couple to direct superannuation contributions to the

superannuation fund of a partner who has a lower superannuation

benefit.[76] This will minimise the amount of tax each member of the couple have to pay on

superannuation benefits exceeding the relevant thresholds (the Reasonable

Benefit Limit (RBL) threshold and the Eligible Termination Payment (ETP)

threshold).[77]

13.6.1 A

same-sex partner cannot engage in contributions splitting

Since 1 January 2006, the Superannuation Industry

Regulations have provided that an individual can split his or her superannuation

contributions with a

‘spouse’.[78]
While ‘spouse’ is not defined in the

Superannuation Industry Regulations, the definition of ‘spouse’ in

the Superannuation Industry Act and tax legislation clearly excludes a same-sex

partner. Therefore it is the Inquiry’s view that a same-sex partner will

not qualify as a ‘spouse’ for the purposes of superannuation

contributions splitting.[79]

13.6.2 Negative

impact on same-sex couples

The Association of Superannuation Funds of Australia

(ASFA) notes that access to contributions splitting can be a considerable

financial advantage for couples with large superannuation

benefits.[80] The ALSO Foundation

also highlights that contributions splitting greatly helps a couple where one

partner is not

working.[81]

Several

people in same-sex couples told the Inquiry of the impact of their ineligibility

for these provisions. For example:

In our case, my partner has significantly less

superannuation savings than I do and we would like to equalise the amounts saved

in superannuation. The ability to do this by splitting superannuation

contributions would be of great benefit to our retirement savings. The

potential tax saving is over $20,000 at retirement. We are unable to take

advantage of this initiative as it is not available to same sex

couples.[82]

Action Reform Change Queensland and the Queensland

AIDS Council describe one couple’s experience of discrimination in the

area of contributions splitting:

Karen and Siobhan (not their real names) have lived

together for 8 years. As Karen works full-time, and Siobhan works on a casual,

part-time basis, Karen would like to be able to make contributions into

Siobhan’s superannuation fund. As Karen says:

What are our rights? Superannuation is quite confusing but

for same sex couples it is much worse. This is discriminatory. Super splitting

is not an option for same sex couples. This is a good idea if one person in the

couple is working more regularly than the other, but this option is not

available in same sex

couples.[83]

13.7 Can

a same-sex couple access the superannuation spouse tax

offset?

A person is eligible for a tax offset if he or she

makes an after-tax superannuation contribution on behalf of his or her

low-income earning

‘spouse’.[84] The tax

offset is 18% for contributions made up to $3000 per annum (which amounts to a

tax offset of up to $540 per

annum).[85]

In addition, any after-tax contribution to the

superannuation fund of a ‘spouse’ or ‘child’ will be

exempt from the 15% superannuation contributions

tax.[86]

13.7.1 A

same-sex partner cannot access the superannuation spouse tax

offset

For the purposes of the spouse tax offset, a

‘spouse’ is defined as a person who ‘lives with the person on

a genuine domestic basis as the person’s husband or wife’ even

though they are not legally

married.[87]

As discussed previously, the terms

‘husband’ and ‘wife’ exclude a same-sex partner from

this definition.

13.7.2 Negative

impact on same-sex families

A person who makes a superannuation contribution on

behalf of a same-sex partner or child other than a birth child will be excluded

both from the offset and the contribution tax

exemption.

A person will not be entitled to

either the spouse tax offset or the tax exemption available to a person who

makes after-tax contributions to his or her same-sex partner or non-birth

child.

The Inquiry heard of the impact of this

discrimination:

There have been some financial years where one of us has

qualified as a low income earner under the Tax Office’s definition. Yet

as we do not qualify as “spouses” under the Taxation Office

definition, the other is unable to claim the $540 rebate for contributing to the

lower income earner’s superannuation fund. We are therefore financially

worse off than we would be if the definition of spouse included same-sex spouse.

This impacts not only our pocket today but it removes an incentive to top up

superannuation, it impacts upon what is available to us at

retirement.[88]

13.8 Can

the surviving same-sex partner of a judge access a judicial

pension?

Judicial pensions are a form of superannuation

entitlement.

13.8.1 The

surviving same-sex partner of a federal judge cannot access a reversionary

pension

When a federal judge or magistrate dies, his or her

‘spouse’ is entitled to a reversionary pension equivalent to 62.5%

of the pension entitlement paid while the judge was

alive.[89] A pension may also be

available to an ‘eligible

child’.[90]

However,

the same-sex partner of a judge does not qualify as a ‘spouse who survives

a deceased judge’ and is therefore not entitled to this reversionary

pension.[91]
The

child of a deceased judge who was the lesbian co-mother or gay co-father may

qualify as an ‘eligible child’ if the Attorney-General forms the

view that he or she was wholly or substantially dependent, but otherwise will be

excluded.[92]

The

Judicial Conference of Australia told the Inquiry that they believed that

‘Australian judicial officers, like other working Australians, should be

able to share the fruits of their labours with their partners of either

sex’.[93] They also argue

that:

...it is important to recognise that the pension

entitlements or retirement benefits provided to judicial officers play an

important role in protecting judicial independence. Entitlements and benefits

should be uniform among all judicial officers, State and Federal, and should

reflect the principle that family members will be protected after the death of a

judicial

officer.[94]

The

Judicial Conference of Australia also draws attention to potential

discrimination in the Federal Magistrates Amendment (Disability and Death

Benefits) Bill 2006, which is still before the federal Parliament. The Bill

seeks to amend the Federal Magistrates Act 1999 (Cth) to provide

disability cover and death benefits to an ‘eligible spouse’ or

‘eligible child’ of a federal

magistrate.[95] However, those

definitions do not include the same-sex partner of a magistrate. Nor do they

include a child of a lesbian co-mother or gay

co-father.[96]

13.8.2 The

surviving same-sex partner of a state judge can access a reversionary pension

except in Victoria

Except in Victoria, it seems that the same-sex partner

of a judge in all state and territory jurisdictions is entitled to the same

retirement benefits as an opposite-sex

partner.

According to the Equal Opportunity

Commission of Victoria, a same-sex partner will be ineligible for a reversionary

pension under any of the following legislation. This legislation does not define

‘spouse’:

  • Attorney-General and Solicitor-General Act

    1972 (Vic)[97]

  • Constitution Act 1975 (Vic)[98]
  • County Court Act 1958 (Vic)[99]
  • Magistrates’ Court Act 1989 (Vic)[100]
  • Public Prosecutions Act 1994 (Vic)[101]
  • Supreme Court Act 1986 (Vic)[102]

The Equal Opportunity Commission of

Victoria describes recent efforts to amend this legislation:

In April 2005 the Victorian Government introduced into

Parliament the Courts Legislation (Judicial Pensions)

Bill. It

sought to modernise the State’s constitutionally protected pension schemes

to ensure that they operate in accordance with Commonwealth family law and

Victorian equal opportunity law. The second reading speech to this Bill

acknowledged that the constitutionally protected pension schemes were

established in the middle of the 19th century and reversionary

pensions were only made available to married partners. This Bill sought to

replace references to spouse with domestic partner to ensure that reversionary

pension schemes were also available to mixed-sex and same-sex unmarried

partners. The proposed amendments would have brought reversionary pension

entitlements up to date with commensurate relationship recognition reform under

the Relationships

Acts.[103]

The

situation in the ACT is complex due to the interaction between federal and ACT

law. The Judicial Conference of Australia explains:

In the ACT, a judge has the same entitlements as a Federal

judge under s.4(1) of the Judges Pensions Act 1968 (Cth). However, the

ACT has effectively overcome the discriminatory operation of the Judges

Pensions Act by adopting a definition of “marital relationship”

in s.37U(3)(h) of the Supreme Court Act 1933 (ACT) which includes a

relationship between two people of the same sex. Section 37U(3)(a) applies the Judges Pensions Act as if it was a law of the ACT. Assuming that the ACT

has achieved its objective, the odd result is that the Judges Pensions Act has a more generous operation as a law of the ACT than it does as a law of

the Commonwealth. This raises interesting questions as to the position of

judges who hold dual commissions as both Commonwealth and ACT

judges.[104]

13.9 Can

the surviving same-sex partner of a Governor-General access an

allowance?

As with judges, a former Governor-General receives an

allowance which passes to their ‘spouse’ on

death.[105] However, the relevant

definition excludes a same-sex

partner.[106] Therefore a same-sex

partner of the Governor-General will not be entitled to the allowance.

13.10 Do

superannuation laws breach human rights?

This chapter shows that same-sex couples do not have

access to the range of superannuation benefits and tax concessions available to

opposite-sex couples. In particular, the same-sex partner of a federal public

servant does not have access to direct death benefits.

A same-sex partner may be able to access some

benefits in private superannuation schemes if he or she can establish financial

dependence on his or her partner or meet the ‘interdependency

relationship’ criteria. However, both these categories impose more onerous

qualifying criteria than for an opposite-sex de facto partner in the same

position.

Therefore, the main finding of this

chapter is that superannuation and tax laws which exclude same-sex couples from

superannuation entitlements and associated tax concessions available to an

opposite-sex couple, breach the right to equal protection of the law under

article 26 of the International Covenant of Civil and Political Rights (ICCPR).

Under the International

Covenant of Economic Social and Cultural Rights (ICESCR), any steps

Australia takes to guarantee the right to social security (including

superannuation entitlements) must occur without discrimination (articles 9,

2(2)). The discriminatory treatment of same-sex couples in superannuation

breaches this right.

In some federal employee

superannuation schemes the child of a lesbian co-mother or gay co-father may not

be entitled to the direct death benefits available to the child of a birth

mother or birth father. This may amount to a breach of article 18(1) of the Convention on the Rights of the Child (CRC) which requires recognition of

the common responsibilities of both parents of a child.

In other superannuation schemes, the child

of a lesbian or gay co-parent may be able to access direct death benefits if

they can prove financial dependence. Since these schemes do not deny a child

access to direct death benefits outright, the Inquiry makes no finding of breach

insofar as the laws apply to the children of same-sex

couples.

Nevertheless, to the extent that a

same-sex family may be financially worse-off because of discrimination in

accessing superannuation entitlements and tax concessions, the best interests of

the child may be compromised.

Finally, to the

extent that proving the ‘interdependency category’ requires greater

intrusion into the private family life of a same-sex couple than for an

opposite-sex couple, there may be a breach of articles 17 and 2(1) of the

ICCPR.

13.11 How

should the law be changed to avoid future human rights

breaches?

It is clear that same-sex couples and families are

denied access to a range of superannuation entitlements and associated tax

concessions which are available to opposite-sex de facto couples and

parents.

The introduction of the

interdependency category has given same-sex couples access to certain death

benefits which were previously denied to them. However, it is more complex for a

same-sex couple to satisfy the ‘interdependency’ criteria than it is

for an opposite-sex de facto couple to satisfy the ‘spouse’

criteria. And the creation of a different category for same-sex couples suggests

that they are a lesser, or at least different quality of couple to an

opposite-sex couple. The Inquiry does not accept this

distinction.

The Inquiry recommends amending

the legislation to avoid future breaches of the human rights of people in

same-sex couples.

The following sections

summarise the cause of the problems and how to fix them.

13.11.1 Narrow

definitions are the main cause of discrimination

Same-sex couples are worse off than opposite-sex

couples because the definitions in superannuation and associated taxation

legislation fail to treat same-sex couples and families in the same way as

opposite-sex couples and families.

In

particular, the narrow definition of ‘spouse’ in various pieces of

superannuation and associated taxation legislation limits the entitlements

available to same-sex couples and families.

The definition of ‘child’ in

certain pieces of superannuation legislation is also problematic because it may

exclude the child of a lesbian co-mother or gay co-father.

13.11.2 The

solution is to amend the definitions and recognise both same-sex

parents

While the interdependency definition opens the door to

gay and lesbian couples, it still does not treat same-sex and opposite-sex

couples in the same way. And it is not the appropriate mechanism for bringing

equality to same-sex couples.

A better way to

bring equality is to treat a same-sex partner as a ‘spouse’ in the

same-way as an opposite-sex partner.

Chapter 4

on Recognising Relationships presents two alternative approaches to amending

federal law to remove discrimination against same-sex couples.

The Inquiry’s preferred approach for

bringing equality to same-sex couples is to:

  • retain the current terminology used in federal

    legislation (for example retain the term ‘spouse’ in the

    Superannuation Act 1976)

  • redefine the terms in the legislation to include same-sex

    couples (for example, redefine ‘spouse’ in the Superannuation Act

    1976 to include a ‘de facto partner’)

  • insert new definitions of ‘de facto

    relationship’ and ‘de facto partner’ which include same-sex

    couples.

Chapter 5 on Recognising

Children sets out how to better protect the rights of both the children of

same-sex couples and the parents of those children.

Chapter 5 recommends that the federal

government implement parenting presumptions in favour of a lesbian co-mother of

a child conceived through assisted reproductive technology (ART). This would

mean that an ART child born to a lesbian couple would automatically be the

‘child’ of both members of the lesbian couple (in the same way as an

ART child is automatically the ‘child’ of both members of an

opposite-sex couple).

Chapter 5 also suggests

that it should be easier for a lesbian co-mother and gay co-father to adopt a

child for the same reasons.

Chapter 5 further

recommends the insertion of a new definition of ‘step-child’ which

would include a child under the care of a ‘de facto partner’ of the

birth parent. This would make it easier for the child of a lesbian co-mother or

gay co-father to qualify under those definitions of ‘child’ which

include a ‘step-child’.

It may not

be necessary to amend the definition of ‘child’ if these three

things occur, because a lesbian co-mother and gay co-father will fall under the

definition as is.

Finally, Chapter 5 suggests

that federal legislation should clearly recognise the status of a person who has

a parenting order from the Family Court of Australia. This would mean that the

children of a gay co-father or lesbian co-mother with a parenting order could

more confidently assert their right to superannuation

entitlements.

The following list sets out the

definitions which would need to be amended according to these suggested

approaches.

The Inquiry notes that if the

government were to adopt the alternative approaches set out in Chapter 4 on

Recognising Relationships, then different amendments would be

required.

13.11.3 A

list of federal legislation to be amended

The Inquiry recommends amendments to the following

legislation discussed in this

chapter:

Defence Force Retirement and Death

Benefits Act 1973 (Cth)

‘child’ (s 3(1) – no need to amend if

the child of a lesbian co-mother or gay co-father may be recognised through

reformed parenting presumptions, adoption laws or a new definition of

‘step-child’)

‘de facto relationship’ (insert new

definition)

‘eligible child’ (s 3(1) – no need to

amend if the child of a lesbian co-mother or gay co-father may be recognised

through reformed parenting presumptions, adoption laws or a new definition of

‘step-child’)

‘marital relationship’ (s 6A – amend to

include a ‘de facto relationship’)

‘spouse’ (s 6B(2) – no need to amend if

‘marital relationship’ is amended)

‘step-child’ (insert new

definition)

Federal Magistrates Amendment

(Disability and Death Benefits) Bill 2006 seeking to amend the Federal

Magistrates Act 1999 (Cth)

‘de facto partner’ (insert new

definition)

‘de facto relationship’ (insert new

definition)

‘eligible child’ (sch 1, cl 13 inserting sch

1, cl 9F into the Act - no need to amend if the child of a lesbian co-mother or

gay co-father may be recognised through reformed parenting presumptions or

adoption laws)

‘eligible spouse’ (sch 1, cl 13 inserting sch

1, cl 9E into the Act – no need to amend if ‘marital

relationship’ is amended)

‘marital relationship’ (sch 1, cl 13 inserting

sch 1, cl 9E(5) into the Act – amend to include a ‘de facto

partner’)

Governor-General Act

1974 (Cth)

‘de facto relationship’ (insert new

definition)

‘marital relationship’ (s 2B – amend to

include ‘de facto relationship’)

‘spouse of a deceased person’ (s 2C – no

need to amend if ‘marital relationship’ is amended)

Income Tax Assessment Act 1936 (Cth)

‘child’ (s 6(1) – no need to amend if

the child of a lesbian co-mother or gay co-father may be recognised through

reformed parenting presumptions, adoption laws or a new definition of

‘step-child’ in the Income Tax Assessment Act 1997)

‘relative’ (s 6(1) – no need to amend if

‘spouse’ is amended and a lesbian co-mother or gay co-father may be

recognised as a parent through reformed parenting presumptions or adoption laws

in the Income Tax Assessment Act 1997)

‘spouse’ (s 6(1) – no need to amend if

‘spouse’ is amended in the Income Tax Act

1997)

Income Tax Assessment Act 1997 (Cth)

‘child’ (s 995-1 – no need to amend if

the child of a lesbian co-mother or gay co-father may be recognised through

reformed parenting presumptions, adoption laws or a new definition of

‘step-child’)

‘death benefits

dependant’ (s 302-195 – no need to amend if ‘spouse’ is

amended and ‘child’ may recognise the child of a lesbian co-mother

or gay co-father through reformed parenting presumptions, adoption laws or a new

definition of ‘step-child’)

‘de facto partner’ (insert new

definition)

‘de facto relationship’ (insert new

definition)

‘interdependency relationship’ (s 302-200

– no need to amend if ‘spouse’ is amended)

‘relative’ (s 995-1 – no need to amend

if ‘spouse’ is amended and a lesbian co-mother or gay co-father may

be recognised as a parent through reformed parenting presumptions or adoption

laws)

‘spouse’ (s 995-1 – amend to include a

‘de facto partner’)

‘step-child’ (insert new

definition)

Income Tax Regulations 1936

(Cth)

‘interdependency relationship’ (reg 8A(1)

– no need to amend if ‘spouse’ is amended in the Income Tax

Assessment Act 1997)

Judges’ Pensions

Act 1968 (Cth)

‘de facto relationship’ (insert new

definition)

‘eligible child’ (s 4AA – amend to

clarify the role of a parenting order; otherwise no need to amend if the child

of a lesbian co-mother or gay co-father may also be recognised through reformed

parenting presumptions or adoption laws)

‘marital relationship’ (s 4AB(1) – amend

to include ‘de facto relationship’)

‘spouse who survives a deceased judge’ (s

4AC(2) – no need to amend if ‘marital relationship’ is

amended)

Military

Superannuation and Benefits Trust Deed (made under s 5(1) of the Military Superannuation and Benefits Act 1991 (Cth))

‘child’ (sch 1, r 1 – no need to amend

if ‘spouse’ is amended and the child of a lesbian co-mother or gay

co-father may be recognised through reformed parenting presumptions, adoption

laws or a new definition of ‘step-child’)

‘de facto relationship’ (insert new

definition)

‘eligible child’ (sch 1, r 1 – no need

to amend if the child of a lesbian co-mother or gay co-father may be recognised

through reformed parenting presumptions, adoption laws or a new definition of

‘step-child’)

‘marital relationship’ (sch 1, r 1A –

amend to include ‘de facto relationship’)

‘spouse’ (sch 1, r 9 – no need to amend

if ‘marital relationship’ is amended)

‘spouse’ (sch 1, r 12 –

delete)

‘step-child’ (insert new

definition)

Parliamentary Contributory

Superannuation Act 1948 (Cth)

‘child’ (s 19AA(5) – no need to amend if

the child of a lesbian co-mother or gay co-father may be recognised through

reformed parenting presumptions or adoption laws)

‘de facto relationship’ (insert new

definition)

‘eligible child’ (s 19AA(5) - no need to amend

if the child of a lesbian co-mother or gay co-father may be recognised through

reformed parenting presumptions or adoption laws)

‘marital relationship’ (s 4B – amend to

include ‘de facto relationship’)

‘spouse’ (s 4C(2) – no need to amend if

‘marital relationship’ is

amended)

Retirement Savings Accounts Act

1997 (Cth)

‘child’ (s 20(3) – no need to amend if

the child of a lesbian co-mother or gay co-father may be recognised through

reformed parenting presumptions, adoption laws or a new definition of

‘step-child’)

‘de facto partner’ (insert new

definition)

‘de facto relationship’ (insert new

definition)

‘dependant’ (s 20(1) – no need to amend

if ‘spouse’ is amended and ‘child’ may recognise the

child of a lesbian co-mother or gay co-father through reformed parenting

presumptions, adoption laws or a new definition of

‘step-child’)

‘interdependency relationship’ (s 20A –

no need to amend if ‘spouse’ is amended)

‘spouse’ (s 20(2) – amend to include a

‘de facto partner’)

‘step-child’ (insert new

definition)

Superannuation

Act 1976 (Cth)

‘child’ (s 3(1) – no need to amend if

the child of a lesbian co-mother or gay co-father may be recognised through

reformed parenting presumptions, adoption laws or a new definition of

‘step-child’)

‘de facto relationship’ (insert new

definition)

‘eligible child’ (s 3(1) – no need to

amend if the child of a lesbian co-mother or gay co-father may also be

recognised through reformed parenting presumptions, adoption laws or a new

definition of ‘step-child’)

‘marital relationship’ (s 8A – amend to

include ‘de facto relationship’)

‘partially dependent child’ (s 3(1) – no

need to amend if the child of a lesbian co-mother or gay co-father may also be

recognised through reformed parenting presumptions, adoption laws or a new

definition of ‘step-child’)

‘spouse’ (s 8B(2) – no need to amend if

‘marital relationship’ is amended)

‘step-child’ (insert new definition)

Superannuation Act 1990 (Cth)

‘child’ (sch 1, r 1.1.1 – no need to

amend if ‘spouse’ is amended and the child of a lesbian co-mother or

gay co-father may be recognised through reformed parenting presumptions,

adoption laws or a new definition of ‘step-child’)

‘de facto partner’ (insert new

definition)

‘de facto relationship’ (insert new

definition)

‘eligible child’ (sch 1, r 1.1.1 – no

need to amend if the child of a lesbian co-mother or gay co-father may also be

recognised through reformed parenting presumptions, adoption laws or a new

definition of ‘step-child’)

‘partially dependent child’ (sch 1, r 1.1.1

–no need to amend if the child of a lesbian co-mother or gay co-father may

also be recognised through reformed parenting presumptions, adoption laws or a

new definition of ‘step-child’)

‘spouse’ (sch 1, r 1.1.1 – amend to

include a ‘de facto partner’)

‘step-child’ (insert new

definition)

Superannuation Industry

(Supervision) Act 1993 (Cth)

‘child’ (s 10(1) – no need to amend if

the child of a lesbian co-mother or gay co-father may be recognised through

reformed parenting presumptions, adoption laws or a new definition of

‘step-child’)

‘de facto partner’ (insert new

definition)

‘de facto relationship’ (insert new

definition)

‘dependant’ (s 10 – no need to amend if

‘spouse’ is amended and the child of a lesbian co-mother or gay

co-father may be recognised through reformed parenting presumptions, adoption

laws or a new definition of ‘step-child’)

‘interdependency relationship’ (s 10A - no

need to amend if ‘spouse’ is amended)

‘spouse’ (s 10(1) – amend to include a

‘de facto partner’)

‘step-child’ (insert new

definition)

Superannuation Industry (Supervision) Regulations 1994

(Cth)

‘interdependency relationship’ (reg 1.04AAAA -

no need to amend if ‘spouse’ is amended in the Superannuation

Industry Act)

Superannuation (Public Sector

Superannuation Accumulation Plan) Trust Deed (made under s 10 of the Superannuation Act 2005 (Cth))

‘dependant’ (Div 2, r 1.2.1 – no need to

amend if ‘spouse’ is amended in the Superannuation Industry

Act)

13.11.4 A

list of state legislation to be amended

The Inquiry recommends review of the following

legislation and amendment if discrimination remains with respect to same-sex

couples or their children:

New South

Wales

  • Coal and Oil Shale Mine Workers (Superannuation) Act

    1941 (NSW)

  • Local Government and Other Authorities

    (Superannuation) Act 1927 (NSW)

  • New South Wales Retirement Benefits Act 1972 (NSW)
  • Public Authorities Superannuation Act 1985 (NSW)
  • Transport Employees Retirement Benefits Act 1967 (NSW)

Victoria

  • Attorney-General and Solicitor-General Act 1972 (Vic)
  • Coal Mines (Pensions) Act 1958 (Vic)
  • Constitution Act 1975 (Vic)
  • County Court Act 1958 (Vic)
  • Magistrates Court Act 1989 (Vic)
  • Public Prosecutions Act 1994 (Vic)
  • Supreme Court Act 1986 (Vic)

Western Australia

  • Superannuation and Family Benefits Act 1938 (WA)

Table

1: Federal government superannuation schemes

Scheme
Benefits
Definitions
Commonwealth Superannuation Scheme

(CSS)

Members include federal government

and ACT government employees. The scheme closed to new members from 1 July 1990.

CSS is governed by the Superannuation

Act 1976 (Cth).

A range of death benefits are payable to spouses and

children: ss 81-88, 89-92, 93-96AB,

97-109A.

Some of these benefits are higher when

there are partially dependent children: ss 96B-96BB,

109A.

In the event that there is no surviving

spouse or child, a benefit is payable to the person’s legal personal

representative. If no legal personal representative can be found, benefits can

be paid to any individual or individuals that the Board determines: s 110SQ.

Spouse: ‘a person is a spouse who survives

a deceased person if the person had a marital relationship with the deceased

person at the time of the death of the deceased person’: s

8B(2).

Marital relationship: ‘a

person had a marital relationship with another person at a particular time if

the person ordinarily lived with that other person as that other person’s

husband or wife on a permanent and bona fide domestic basis at that

time’: s 8A(1).

Child: ‘a

child (including an adopted child, an ex-nuptial child, a foster child, a step

child or a ward) of the person or of a spouse of the person’: s

3(1).

Eligible child: a child under 16

years; or over 16 but under 25 and receiving full-time education and is not

ordinarily in employment or engaged in work on his or her own account; and

immediately before the deceased person’s death, ordinarily lived with the

deceased person (except where the person is a child of a spouse but not of the

deceased person) or was wholly or substantially dependent upon the deceased

person, in the opinion of the Board: s

3(1).

Partially dependent child: a child

under 16 years; or over 16 but under 25 and receiving full-time education and

not ordinarily in employment or engaged in work on his or her own accord; and in

respect of whom, immediately before the deceased person’s death, the

deceased person was making regular maintenance payments: s

3(1).

Legal personal representative: the

executor of the will, the trustee of the estate of a person under a legal

disability or a person who holds an enduring power of attorney granted by a

person: s 10(1) of the Superannuation Industry (Supervision) Act 1993 (Cth).

Public Sector Superannuation Scheme

(PSS)

This scheme took over from the CSS.

It closed to new members from 1 July 2005.

PSS

is governed by the Trust Deed scheduled under the Superannuation Act 1990 (Cth).

A reversionary pension is available to a spouse or an

eligible child or a partially dependent child: sch 1, rr 5.1.1,

5.2.1.

Preserved benefits of a deceased member

are payable to a spouse or an eligible child or a partially dependent child: sch

1, r 6.1.9-6.1.10. Benefits may be paid in the form of a pension rather than a

lump sum: sch 1, rr 6.1.12-6.1.13.

If there is

no surviving spouse or eligible child or partially dependent child, the member

must notify the Board that he or she has a dependent person who would not be

able to receive benefits as a spouse, eligible child or partially dependent

child. The member must tell the Board he or she has included this person in

their will. The Board has discretion to pay such benefit as it considers

appropriate to the person named: sch 1, r 6.1.11.

Spouse: (a) ‘a person who was legally

married to the deceased person at the time of the person’s death and who,

at that time, was ordinarily living with the person on a permanent and bona fide

domestic basis’; and (c) ‘a person who was not legally married to

the deceased person at the time of the person’s death but who, for a

continuous period of not less than 3 years immediately before the person’s

death, had ordinarily lived with the person as the person’s husband or

wife, as the case may be, on a permanent and bona fide domestic basis’:

sch 1, r 1.1.1.

Child: ‘a child

(including an adopted child, an ex-nuptial child or a stepchild, or any other

person whom the Board determines is to be treated as a child of the

first-mentioned person) of the person or of a spouse of the person’: sch

1, r 1.1.1.

Eligible child:

Substantially the same definition as under the Superannuation Act 1976 (Cth): sch 1, r 1.1.1.

Partially dependent

child: Substantially the same definition as under the Superannuation Act

1976 (Cth): sch 1, r 1.1.1.

Defence Force Retirement and Death Benefits

Scheme (DFRDB)

Provides retirement funds,

as well as death and disability benefits, to members of the defence forces. This

scheme closed to new members on 1 October

1991.

The DFRDB is governed by the Defence Force Retirement and Death Benefits Act 1973 (Cth).

The surviving spouse of a deceased member is

entitled to a pension: ss 38-39. In some circumstances, a spouse is eligible for

such pensions as lump sum payments: s

41A.

There are also specific pensions payable

to surviving children: ss 42-43.

On the death

of a member, a surviving spouse or eligible child may elect that the member

joins the Military Superannuation and Benefits Scheme (MSBS): s

133.

Spouse: a person is a spouse ‘if the person

had a marital relationship with the deceased person at the time of the death of

the deceased person’: s 6B(2).

Marital

relationship: Substantially the same definition as under the Superannuation Act 1976 (Cth): s

6A(1).

Child: ‘a person who is an

ex-nuptial child of the member, or, is, immediately before the member’s

death, a step-child, an adopted child, a foster child or a ward, of the

member’; and ‘a person who is a child or ex-nuptial child of a

spouse who survives the member and was wholly or substantially dependent upon

the member at the time of the member’s death’: s

3(1).

Eligible child: a person under 16

years; or a person over 16 but under 25 years and receiving full-time education

and not ordinarily in employment or engaged in work on his own account: s

3(1).

Military Superannuation and Benefits Scheme

(MSBS)

Provides retirement funds and death

and disability benefits to members of the defence forces. This fund took over

from the DFRDB in 1991.

The MSBS is governed by

the Military Superannuation and Benefits Trust Deed made under s 5(1) of Military Superannuation and Benefits Act 1991 (Cth).

The Trust Deed provides for benefits to be paid to a

spouse and children on the death of a member: sch 1, rr

38-48.

The Board has wide discretion to pay

benefits to those who would not be entitled under the rules in unusual or

exceptional circumstances: sch 1, r 66.

Spouse: Substantially the same definition as

under the Defence Force Retirement and Death Benefits Act 1973 (Cth):

Trust Deed, sch 1, r 9(a).

‘a person is

not, for the purposes of these Rules, a spouse in relation to another person if

he or she is of the same sex as that other person’: Trust Deed, sch 1, r

12.

Marital relationship: Substantially

the same definition as under the Superannuation Act 1976 (Cth): Trust

Deed, sch 1, r 1A.

Child: Substantially

the same definition as under the Defence Force Retirement and Death Benefits

Act 1973 (Cth): Trust Deed, sch 1, r

1.

Eligible child: Substantially the

same definition as under the Defence Force Retirement and Death Benefits Act

1973 (Cth): Trust Deed, sch 1, r 1.

Parliamentary Contributory Superannuation Scheme

(PCSS)

Provides superannuation entitlements

to members of federal parliament who entered the scheme prior to 9 October 2004.

The PCSS is governed by the Parliamentary Contributory Superannuation Act 1948 (Cth).

The Parliamentary Superannuation

Act 2004 (Cth) gave parliamentarians a choice of superannuation

fund.

A proportion of a deceased member’s parliamentary

allowance (if the member dies while still in parliament) or retirement allowance

(if they had retired) is payable to a surviving spouse: s 19. An additional

benefit is payable to the surviving spouse of a Prime Minister or former Prime

Minister: s 19A.

There are also benefits in

respect of orphaned children and dependent children of the deceased person: ss

19AA (c)-(d).

Both surviving spouses and

children may convert some or part of the pension to a lump sum payment: ss

19AAA, 19ABA.

Spouse: Substantially the same definition as

under the Superannuation Act 1976 (Cth): s

4C(2)(a).

Marital relationship:

Substantially the same definition as under the Superannuation Act 1976 (Cth): s 4B(1).

Child: a child

(including an adopted or an ex-nuptial child) of the person: s

19AA(5).

Eligible child: a child who is

under 16; or a child who is over 16 but under 25 and receiving full-time

education: s 19AA(5).

Note: The Public Sector Superannuation Accumulation Plan

(PSSap) Scheme is discussed in section 13.2.1.


Endnotes

[1] In early 2007, the federal government enacted major reforms to the

superannuation tax and regulatory regime to simplify it. The new superannuation

tax regime is effective from 1 July 2007: see Tax Laws Amendment (Simplified

Superannuation) Act 2007 (Cth). This report refers to both the existing tax

provisions contained in the Income Tax Assessment Act 1936 (Cth) and the

new (replacement) provisions in the Income Tax Assessment Act 1997 (Cth),

where relevant.
[2] A death benefit is usually a significant proportion of the superannuation

entitlements of the member. The amount of the death benefit will depend on the

member’s contributions to the fund; earnings on those contributions; an

additional element of life insurance: see M Stewart, ‘Are You Two

Interdependent? Family, Property and Same-Sex Couples in Australia’s

Superannuation Regime’, Sydney Law Review, vol 28, no 3, 2006,

p441.
[3] See Superannuation Act 2005 (Cth), s 10, which provides for a trust deed

to establish the PSSap Fund. All relevant definitions and entitlements are

contained within the Deed: Superannuation (PSSAP) Trust Deed,

F2005L01901.
[4] Superannuation (PSSAP) Trust Deed, r 1.2.1: ‘dependant has the same

meaning as in the Superannuation Industry (Supervision) Act 1993 (Cth)’.
[5] Superannuation Act 1976 (Cth), s

8B(2).
[6] Superannuation Act 1976 (Cth), s

8A(1).
[7] Gregory Brown v Commissioner for Superannuation (1995) 21 AAR 378, para

63.
[8] Gary Fan and Wayne Lodge, Submission

123.
[9] Good Process, Submission

284.
[10] Association of Superannuation Funds of Australia, Submission

128.
[11] Association of Superannuation Funds of Australia, Submission

128.
[12] Gay and Lesbian Rights Lobby (NSW), Submission 333. See also, Julie Murphy,

Submission 254; Paul Cooke, Submission 293; Brian Greig, Submission

110.
[13] Penelope Morton, Submission 5. See also Brian McKinlay, Submission 130.
[14] Barbara Guthrie and Maureen Kingshott, Submission

205.
[15] Name Withheld, Submission

21.
[16] Name Withheld, Submission

246.
[17] Tony Whelan, Submission

20.
[18] Community and Public Sector Union, PSU Group, Submission 135; Name Withheld,

Submission 257; Superannuated Commonwealth Officers’ Association Inc.,

Submission

320.
[19] N Minchin (Minister for Finance and Administration; Deputy Leader of the

Government in the Senate), Correspondence with Federal Secretary, Superannuated

Commonwealth Officers’ Association, 8 December 2005. See Superannuated

Commonwealth Officers’ Association Inc., Submission

320.
[20] Name Withheld, Submission 246. See also Name Withheld, Submission

257.
[21] Equal Opportunity Commission of Victoria, Submission

327.
[22] Equal Opportunity Commission of Victoria, Submission

327.
[23] See for example Law Reform (Gender, Sexuality and De Facto Relationships) Act

2003 (NT), ss 45, 61, 75, 79; Statutes Amendment (Domestic Partners) Act

2006 (SA), ss 177, 209 (this Act had not commenced as at 10 April

2007).
[24] Superannuation Industry (Supervision) Act 1993 (Cth), s 62(1)(a)(iv)-(v).

See also Superannuation Complaints Tribunal, Key considerations that apply to

death benefit complaints, 2006, para 59. The Association of Superannuation

Funds of Australia Limited, Death Benefits, Best Practice Paper No. 29,

September 2006, section

5.3.1.
[25] Income Tax Assessment Act 1936 (Cth), s 27A(1); Income Tax Assessment

Act 1997 (Cth), s 302-10. The 1936 Act provisions continue to apply until 30

June 2007; the 1997 Act provisions become effective on 1 July 2007. The latter

section has clarified existing practice regarding taxation of a death benefit

received by a deceased

estate.
[26] Superannuation Industry (Supervision) Act 1993 (Cth), s 10(1):

spouse in relation to a person, includes another person who,

although not legally married to the person, lives with the person on a genuine

domestic basis as the husband or wife of the

person’.
[27] Superannuation Industry (Supervision) Act 1993 (Cth), s 10(1):

child in relation to a person, includes an adopted child, a

step-child or an ex-nuptial child of the

person’.
[28] Superannuation Industry (Supervision) Act 1993 (Cth), s 10(1). ‘2

persons (whether or not related by family) have an interdependency

relationship if: (a) they have a close personal relationship; and (b)

they live together; and (c) one or each of them provides the other with

financial support; and (d) one or each of them provides the other with

domestic support and personal care’: s

10A(1).
[29] Superannuation Complaints Tribunal, Key considerations that apply to death

benefit complaints, 2006, paras

90-93.
[30] Superannuation Industry (Supervision) Act 1993 (Cth), s 10(1). See also Income Tax Assessment Act 1936 (Cth), s 6(1); Income Tax

Assessment Act 1997 (Cth), s

995-1.
[31] See Gregory Brown v Commissioner for Superannuation (1995) 21 AAR

378.
[32] Superannuation Complaints Tribunal, Legal Issues in Death Benefits, Forum

Discussion Paper, January 2002, p45.
[33] Association of Superannuation Funds of Australia, Submission 128. The inclusion

of the category was enabling only, not prescriptive. ASFA argues that it is

likely that funds will not have included this provision where the fund pays

pensions to the spouses of deceased members or where a reversionary pension is

payable on the death of a person who was already receiving a pension from the

fund.
[34] Superannuation Industry (Supervision) Act 1993 (Cth), s 10A(1); Income

Tax Assessment Act 1997 (Cth), s 302-200; Income Tax Assessment Act

1936 (Cth), s 27AAB. The 1936 Act provisions continue to apply until 30 June

2007; the 1997 Act provisions become effective on 1 July

2007.
[35] Superannuation Complaints Tribunal, Key considerations that apply to death

benefit complaints, 2006, paras 90-93. Persons who were financially

dependent on a deceased member at the time of the death are another category of

dependants to whom a death benefit can be paid. Partial financial dependency may

be sufficient, and a person does not have to be in financial need to establish

that they were financially dependent on the deceased member at the time of

death. However, the degree of financial dependency, which may be determined by

reference to the degree of financial need, may be important when the trustee

exercises its discretion to determine the percentage distribution of the death

benefit amongst various

dependants.
[36] Association of Superannuation Funds of Australia, Death Benefits, Best

Practice Paper No 29, September 2006, section

5.3.3.
[37] Australian Taxation Office, Interpretive Decision 2002/731. However,

certain decisions of the Superannuation Complaints Tribunal have paid death

benefits to a same-sex partner, even where only partial financial dependence was

established: M Stewart, ‘Are You Two Interdependent? Family, Property and

Same-Sex Couples in Australia’s Superannuation Regime’, Sydney

Law Review, vol 28, no 3, 2006,

p448.
[38] Superannuation Industry (Supervision) Act 1993 (Cth), s 10(1). See also Income Tax Assessment Act 1997 (Cth) s 995-1; Income Tax Assessment

Act 1936 (Cth) s

6(1).
[39] For an explanation of these terms see the Glossary of

Terms.
[40] See further Chapter 5 on Recognising

Children.
[41] Association of Superannuation Funds of Australia notes that the Explanatory

Statement (Explanatory Statement, Select Legislative Instrument 2005 No. 261)

puts the view that it would be unlikely for children to be in an interdependency

relationship with their parents: The Association of Superannuation Funds of

Australia, Death Benefits, Best Practice Paper No.29, September 2006,

section 1.2.2,

pp11-12.
[42] See Victorian Gay and Lesbian Rights Lobby, Submission 256; Walter Lee,

Submission

250a.
[43] Association of Superannuation Funds of Australia, Death Benefits, Best

Practice Paper No 29, September 2006, section 4.6, p26. Information should also

be provided about whether the couple had separated or divorced. See also

Superannuation Complaints Tribunal, Key considerations that apply to death

benefit complaints, 2006, para 65: ‘If there was an undissolved legal

marriage at the time of the death of the member to another person, that other

person is a legal spouse. A legal spouse qualifies as a dependant of the

deceased.’ If a spouse is estranged they may not be paid a death

benefit.
[44] D v McA (1986) 11 Fam LR 214 at 227 per Powell J, quoted in

Superannuation Complaints Tribunal, Key considerations that apply to death

benefit complaints, 2006, para 68. Powell J reiterated these criteria in Roy v Sturgeon (1986) 11 NSWLR 454 at 458-459.
[45] However, a temporary separation may not mean that a de facto relationship has

come to an end: George v Hibberson [1987] DFC 95-054, quoted in

Superannuation Complaints Tribunal, Key considerations that apply to death

benefit complaints, 2006, para 69. Also quoted with approval in Howland v

Ellis (2001) Fam LR 656 and more recently in Hornsby v Military

Superannuation & Benefits Board of Trustees No 1 (2003) FCA 54 at para

[25].
[46] Superannuation Industry (Supervision) Act 1993 (Cth), s 10A(1); Income

Tax Assessment Act 1997 (Cth), s 302-200; Income Tax Assessment Act

1936 (Cth), s 27AAB. The 1936 Act provisions continue to apply until 30 June

2007; the 1997 Act provisions become effective on 1 July 2007. See further

Miranda Stewart, Submission

266.
[47] Superannuation Industry (Supervision) Regulations 1994 (Cth), reg 1.04AAAA(1);

Income Tax Regulations 1936 (Cth), reg

8A(1).
[48] M Stewart, ‘Are You Two Interdependent? Family, Property and Same-Sex

Couples in Australia’s Superannuation Regime’, Sydney Law

Review, vol 28, no 3, 2006, p456. Stewart argues that while these additional

matters may merely add substance to the definition, they may also require a more

narrow reading, which could disadvantage same-sex

couples.
[49] M Stewart, ‘Are You Two Interdependent? Family, Property and Same-Sex

Couples in Australia’s Superannuation Regime’, Sydney Law

Review, vol 28, no 3, 2006,

p459.
[50] Superannuation Industry (Supervision) Regulations 1994 (Cth), reg 1.04AAAA(2).

Income Tax Regulations 1936 (Cth), reg 8A(2) (until 30 June

2007).
[51] Superannuation Industry (Supervision) Regulations 1994 (Cth), reg 1.04AAAA(2);

Income Tax Regulations 1936 (Cth), reg 8A(2) (until 30 June 2007). See also M

Stewart, ‘Are You Two Interdependent? Family, Property and Same-Sex

Couples in Australia’s Superannuation Regime’, Sydney Law

Review, vol 28, no 3, 2006,

p462.
[52] M Stewart, ‘Are You Two Interdependent? Family, Property and Same-Sex

Couples in Australia’s Superannuation Regime’, Sydney Law

Review, vol 28, no 3, 2006,

p462
[53] Miranda Stewart, Submission 266. The following Superannuation Complaints

Tribunal Determinations demonstrate some of the difficulties that may be faced

by a same-sex partner of a deceased person in establishing themselves as a

dependant for the purposes of superannuation death benefits: D01-02\212 (21 June

2002); D05-06\061 (20 October

2005).
[54] Name Withheld, Submission

67.
[55] Victorian Gay and Lesbian Rights Lobby, Submission

256.
[56] Marcus Blease, Submission

111.
[57] Lynne Martin, Submission

38.
[58] Margie Collins, Adelaide Hearing, 28 August

2006.
[59] Name Withheld, Submission

67.
[60] Brian Greig, Perth Hearing, 9 August

2006.
[61] Superannuation Industry (Supervision) Act 1993 (Cth), s 59(1A);

Superannuation Industry (Supervision) Regulations 1994 (Cth), reg 6.17A(2).
[62] M Stewart, ‘Are You Two Interdependent? Family, Property and Same-Sex

Couples in Australia’s Superannuation Regime’, Sydney Law

Review, vol 28, no 3, 2006, p464. As noted earlier, superannuation funds

were not compelled to adopt the amendments introducing ‘interdependency

relationship’ as a category of ‘dependant’ to the Superannuation Industry (Supervision) Act 1993 (Cth) and the Income

Tax Assessment Act 1936 (Cth). The relevant definitions have now been made

part of the Income Tax Assessment Act 1997 (Cth), effective 1 July

2007.
[63] Miranda Stewart, Submission

266.
[64] Good Process, Submission

284.
[65] The Retirement Savings Accounts Act 1997 (Cth) regulates the provision of

retirement savings

accounts.
[66] Retirement Savings Accounts Act 1997 (Cth), s

15(3)-(4).
[67] Retirement Savings Accounts Act 1997 (Cth), ss 20, 20A.
[68] Income Tax Assessment Act 1936 (Cth), s 27A(1): ‘dependant’

is defined as ‘(i) any spouse or former spouse of the first person; and

(ii) any child, aged less than 18 years, of the first person; and (iii) any

person with whom the first person has an interdependency relationship’; Income Tax Assessment Act 1997 (Cth), s 302-195 defines a ‘death

benefits dependant’ as: ‘(a) the deceased person’s spouse or

former spouse; or (b) the deceased person’s child, aged less than 18; or

(c) any other person with whom the deceased person had an interdependency

relationship under s 302-200 just before he or she died; or (d) any other person

who was a dependant of the deceased person just before he or she died’.

‘Spouse’ and ‘child’ are defined in the Income Tax

Assessment Act 1997 (Cth), s 995-1. The 1936 Act provisions continue to

apply until 30 June 2007; the 1997 Act provisions become effective on 1 July

2007.
[69] See The Roll-over Relief Claimant and Commissioner of Taxation, [2006]

AATA 728 (23 August

2006).
[70] Income Tax Assessment Act 1936 (Cth), s 27A(1). As at 1 July 2007, the

effective definition will be contained in the Income Tax Assessment Act

1997 (Cth), s

302-195.
[71] Parliament of the Commonwealth of Australia, House of Representatives, Tax Laws

Amendment (Simplified Superannuation) Bill 2006, Explanatory Memorandum, Tables

2.3,

2.4.
[72] Parliament of the Commonwealth of Australia, House of Representatives, Tax Laws

Amendment (Simplified Superannuation) Bill 2006, Explanatory Memorandum, Tables

2.3,

2.4.
[73] The superannuation fund claims a deduction in respect of an anti-detriment

payment to a dependent

beneficiary.
[74] Association of Superannuation Funds of Australia, Submission 128; Income Tax

Assessment Act 1936 (Cth), s 279D; Income Tax Assessment Act 1997 (Cth) s 295-485. The 1936 Act provisions continue to apply until 30 June

2007; the 1997 Act provisions become effective on 1 July

2007.
[75] Income Tax Assessment Act 1997 (Cth), s 295-485(1)(a); Income Tax

Assessment Act 1936 (Cth), s 279D(4). The 1936 Act provisions continue to

apply until 30 June 2007; the 1997 Act provisions become effective on 1 July

2007. See also Association of Superannuation Funds of Australia, Death

Benefits, Best Practice Paper No. 29, September 2006,

p19.
[76] This includes contributions made by an employer and personal contributions for

which an income tax deduction is claimed: Australian Taxation Office, Superannuation contributions splitting – individuals,

http://www.ato.gov.au/print.asp?doc=/content/68032.htm, viewed 2 March

2007.
[77] In 2006-2007, the RBL threshold is $678 149 for lump sum payments and $1 356 291

for pensions: Australian Taxation Office, Reasonable benefit limits - How

these may affect you,

http://www.ato.gov.au/super/content.asp?doc=/content/12253.htm&page=4&H4,

viewed 5 April 2007. The ETP low-rate threshold is $135 590 for the 2006-07

financial year: Australian Taxation Office, Key superannuation rates,

http://www.ato.gov.au/super/content.asp?doc=/content/60489.htm&page=6&H6,

viewed 2 March 2007. From 1 July 2007, the concept of a Reasonable Benefit Limit

will be abolished and no tax will be paid on superannuation benefits received by

a member who is over the age of 60. However, a tax benefit [for contributions

splitting] will remain for those who receive their superannuation benefits prior

to the age of 60. Furthermore, as noted by Miranda Stewart, ‘[these

benefits] remain in the [Superannuation Industry Act] and income tax law and

provide a means for an individual to provide a superannuation balance for his or

her low-income spouse, a concession which will not apply for same-sex

couples’: Miranda Stewart, Submission

266.
[78] See Superannuation Industry (Supervision) Regulations 1994 (Cth), pt 6, div 6.7.

Up to 85% of a member’s deductible personal contributions and 100% of

non-deductible personal contributions can be split with a spouse: Miranda

Stewart, Submission

266.
[79] Superannuation Industry (Supervision) Regulations 1994 (Cth), reg 6.44. See also

Miranda Stewart, Submission 266; Victorian Gay and Lesbian Rights Lobby,

Submission 256; ACON, Submission 281; Association of Superannuation Funds of

Australia, Submission 128; Lynne Martin, Submission

38.
[80] Association of Superannuation Funds of Australia, Sydney Hearing, 26 July 2006.

See also Just Super, Submission

313.
[81] ALSO Foundation, Submission 307h. See also Law Institute of Victoria, Submission

331.
[82] Name Withheld, Submission 290. See also Julie Murphy, Submission

254.
[83] Action Reform Change Queensland and Queensland AIDS Council, Submission

270.
[84] Income Tax Assessment Act 1997 (Cth), s 290-230; Income Tax Assessment

Act 1936 (Cth), s 159T. The 1936 Act provisions continue to apply until 30

June 2007; the 1997 Act provisions become effective on 1 July 2007. At the time

of making the contribution, the person must not be living separately from their

spouse on a permanent basis: Income Tax Assessment Act 1997 (Cth), s

290-230. See Income Tax Assessment Act 1997 (Cth), s 995-1(1) for the

definition of

‘spouse’.
[85] Income Tax Assessment Act 1997 (Cth), s 290-235; Income Tax Assessment

Act 1936 (Cth), ss 159T, 159TA. The 1936 Act provisions continue to apply

until 30 June 2007; the 1997 Act provisions become effective on 1 July 2007. The

full offset is available where a spouse earns less than $10 800 that year and a

partial offset is available where a spouse’s income is up to $13 800: Income Tax Assessment Act 1997 (Cth), ss 290-230, 290-235. See also Name

Withheld, Submission 290; Victorian Gay and Lesbian Rights Lobby, Submission

256; ACON, Submission 281; Gay and Lesbian Rights Lobby (NSW), Submission 333;

Australian Coalition for Equality, Submission 228; Association of Superannuation

Funds of Australia, Submission 128.
[86] Income Tax Assessment Act 1997 (Cth), ss 295-165, 295-170(b); Income

Tax Assessment Act 1936 (Cth), s 274. The 1936 Act provisions continue to

apply until 30 June 2007; the 1997 Act provisions become effective on 1 July

2007.
[87] Income Tax Assessment Act 1997 (Cth), s

995-1(1).
[88] Name Withheld, Submission

41.
[89] Judges’ Pensions Act 1968 (Cth), ss 7-8.
[90] Judges’ Pensions Act 1968 (Cth), ss

9-10.
[91] Judges’ Pensions Act 1968 (Cth), ss 4AC, 4AB(1).
[92] Judges’ Pensions Act 1968 (Cth), s

4AA.
[93] Judicial Conference of Australia, Submission 197.
[94] Judicial Conference of Australia, Submission 197. See also Australian Federation

of AIDS Organisations, Submission 285; Gay and Lesbian Rights Lobby (NSW),

Submission 333; Law Council of Australia, Submission 305; Anti-Discrimination

Commission Queensland, Submission

264.
[95] Judicial Conference of Australia, Submission

197.
[96] See Federal Magistrates Amendment (Disability and Death Benefits) Bill 2006, sch

1, cl 13, inserting cls 9D-9F into Schedule 1 of the Federal Magistrates

Act 1999 (Cth). See further Judicial Conference of Australia,

Submission 197; C Lorimer, Parliament of Australia, Department of Parliamentary

Services, ‘Federal Magistrates Amendment (Disability and Death Benefits)

Bill 2006’, Bills Digest, no 150, 2005-06, 13 June 2006;

Commonwealth of Australia, Senate Legal and Constitutional Affairs Committee, Provisions of the Federal Magistrates Amendment (Disability and Death

Benefits) Bill 2006, 2 May 2006, paras 2.18, 2.19,

http://202.14.81.34/Senate/committee/legcon_ctte/federal_magistrates/re…,

viewed 21 March

2007.
[97] The spouse and children of the Victorian Attorney-General are entitled to

pensions in the same circumstances and at the same rates and on the same terms

as a spouse or child of a Supreme Court judge: Attorney-General and

Solicitor-General Act 1972 (Vic), s

6(1).
[98] The spouse of a Governor is entitled to a pension at the death of a Governor or

former Governor until that spouse dies or remarries: Constitution Act

1975 (Vic), s 7A(3). The spouse or eligible child of a Judge of the Supreme

Court is entitled to a pension at a rate of three-eights of the annual salary of

the Judge at the date of death or of a former Judge at the date of resignation

or retirement: Constitution Act 1975 (Vic), s

83(2)-(3).
[99] This Act provides benefits to the spouse, widow and eligible child of a Judge on

the Judge’s death: for example County Court Act 1958 (Vic), ss 14,

14AA,

17B.
[100] This Act provides for a pension payable to the spouse of a Chief Magistrate or

former Magistrate on his or her death: Magistrates’ Court Act 1989 (Vic), s 10A. ‘Spouse’ is defined as ‘a person to whom the

person is or was married’: Magistrates’ Court Act 1989 (Vic),

s

3A(2)(d).
[101] The spouse and children of the Chief Crown Prosecutor or a Senior Crown

Prosecutor are entitled to pensions in the same circumstances and at the same

rates and on the same terms and conditions as a spouse or child of a judge of

the County Court: Public Prosecutions Act 1994 (Vic), ss 18, 35.