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Same-Sex: Same Entitlements: Chapter 8

Same-Sex: Same Entitlements Report


 

Chapter 8. Tax

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8.1 What

is this chapter about?

This chapter focuses on discrimination against

same-sex couples and their families in the context of Australia’s federal

taxation system.

Same-sex couples are not

eligible for a range of rebates and tax concessions available to opposite-sex

couples. This means same-sex couples may end up paying more tax than

opposite-sex couples because tax legislation does not recognise their

relationship.

Further, some children raised by

same-sex couples are not recognised as the children of both members of that

couple for the purposes of tax law. This means that same-sex parents and their

children may miss out on tax benefits intended to help

families.[1]

The problem arises as a result of the

definitions of ‘spouse’ and ‘child’ in the relevant

taxation legislation. The definition of ‘spouse’ excludes a person

in a same-sex couple. And the definition of ‘child’ does not

encompass a child born to a lesbian co-mother or gay

co-father.

The chapter explains how

Australia’s taxation system currently applies to same-sex couples and

families. It discusses income tax, the Medicare levy, capital gains tax, fringe

benefits tax and goods and services tax. The chapter sets out how discrimination

against same-sex couples and families in tax law breaches Australia’s

human rights obligations. And it makes recommendations as to how to avoid future

discrimination and human rights

breaches.

Specifically, this chapter addresses

the following questions:

  • Do the definitions in tax legislation exclude same-sex

    partners and parents?

  • Do same-sex couples pay the same tax but get less back?
  • Do same-sex families qualify for dependant tax

    offsets?

  • Do same-sex and opposite-sex couples get equal access to

    the senior Australians tax rebate?

  • Can same-sex couples claim the baby bonus?
  • Can same-sex couples claim the child care tax

    rebate?

  • Do same-sex couples have to spend more to access the

    medical expenses tax offset?

  • Do same-sex couples pay a higher Medicare levy and

    surcharge?

  • Do same-sex couples pay more tax on relationship

    breakdown?

  • Do same-sex couples pay more capital gains

    tax?

  • Are employers liable for more fringe benefits tax in

    respect of same-sex couples?

  • Are same-sex couples covered by tax integrity and

    anti-avoidance measures?

  • Does tax legislation breach human rights?
  • How should tax legislation be amended to avoid future

    breaches?

Taxation issues also arise

in other chapters of this report. Chapter 13 on Superannuation discusses how

superannuation is taxed. Chapter 9 on Social Security discusses the

Family Tax Benefit (A and B) as these benefits are welfare payments established

under family assistance legislation.

8.2 Do

the definitions in tax legislation exclude same-sex partners and

parents?

There are two principal pieces of federal income tax

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

Assessment Act 1936) and the Income Tax Assessment Act 1997 (Cth) (Income

Tax Assessment Act 1997).[2] This

legislation covers a variety of issues related to personal income taxation,

including how to assess tax liability and various income deductions and tax

offsets.

8.2.1 ‘Spouse’

excludes a same-sex partner

The Income Tax Assessment Act 1997 defines a

‘spouse’ as follows:

spouse of a person includes a person who, although not legally married to the person,

lives with the person on a genuine domestic basis as the person's

husband or wife.[3]

The Income Tax Assessment Act 1936 adopts the

definition in the 1997 legislation.[4]

In 1995, the Administrative Appeals Tribunal

interpreted a similar definition of spouse and found that:

[t]he fact that the persons must be of opposite sex is

inherent ... in the use of the words ‘husband’ and

‘wife’.[5]

The Australian Taxation Office (ATO) has

followed the interpretation of the Administrative Appeals

Tribunal.[6] Consequently, a same-sex

partner cannot qualify as a ‘spouse’ under tax

legislation.

8.2.2 ‘Child’

excludes the child of a lesbian co-mother or gay co-father

The Income Tax Assessment Act 1997 defines a

‘child’ as follows:

child of a person includes the person’s adopted

child, step-child or ex-nuptial child.[7]

The

Income Tax Assessment Act 1936 adopts the definition in the 1997

legislation.[8]

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).[9]

Chapter 5 also explains that definitions of

‘child’ like that in the Income Tax Assessment Act 1997 will

generally include the child of a birth mother or birth father but exclude a child of a lesbian co-mother and gay co-father (in the absence

of adoption).[10]

Therefore, where a child is born to and raised

by a same-sex couple, taxation law will not recognise one of the child’s

two parents.

8.3 Do

same-sex couples pay the same tax but get less back?

Submissions to the Inquiry repeatedly made the point

that same-sex couples contribute through the payment of tax, without receiving

the tax and other benefits available to most Australian families.

The following is a sample of the comments

received:

  • I do not think that [it’s] right that the

    Commonwealth takes our tax and does not recognise our

    relationships.[11]

  • It’s not like the government gives us a

    choice in these matters. We can’t opt out of the Medicare Levy or

    superannuation. Given the compulsion in the tax, Medicare and superannuation

    systems, it’s reasonable to expect that having contributed at the same

    rate as everyone else, we’ll get the same benefits – but we

    don’t. Very simply we believe that forcing us to contribute to a system

    which discriminates against us is just plain

    wrong.[12]

  • I have a loving partner. I pay lots of tax. And

    yes I am gay. As a member of society who contributes financially through taxes

    and helps people every day in a health related profession why shouldn't my

    partner and I have the same rights as [heterosexual]

    couples[?][13]

  • If we are to pay the same tax as our heterosexual

    and de facto fellow citizens, we should be entitled to the same

    privileges.[14]

  • Firstly, in relation to tax rebates ... neither

    of us is able to access a variety of tax rebates ... Although we both work in

    public government service industries, have lived together for several years with

    joint bank accounts, pool our salaries, pay taxes and contribute to charity, our

    relationship is not considered valid. Our contributions to our community and our

    society are taken gladly but our relationship remains invalid for financial

    purposes compared with heterosexual couples, whether they are legally married or

    not. In addition, we are unable to access the variable rates of Medicare levy

    charges ... which may be in our favour, particularly when we have dependent

    children.[15]

  • Under the present definitions, my partner is not

    entitled to claim me or our child as dependents. It is unfair that we pay

    proportionally higher tax than heterosexual couples do, and that we get less

    benefits for our tax dollars than heterosexual couples

    do.[16]

8.4 Do

same-sex families qualify for dependant tax offsets?

Income tax offsets (also known as rebates or credits)

directly reduce the amount of tax an individual

pays.[17] There are a number of tax

rebates available to a taxpayer because he or she is supporting a

‘dependant’.[18] Those

rebates include:

  • Dependent spouse tax offset
  • Parent or spouse’s parent tax offset
  • Housekeeper tax offset
  • Child-housekeeper tax offset
  • Invalid relative tax

    offset.

A taxpayer in a same-sex

relationship cannot access these offsets in many

cases.

The Australian Coalition for Equality

explains the purpose of such tax offsets as follows:

Australia's taxation laws provide deductions and offsets,

assisting taxpayers in their individual and family situations. Families receive

tax offsets and benefits to alleviate some of the financial strain of raising a

family or having a

dependant.[19]

There

are also some tax offsets which are paid at a higher rate if the taxpayer has a

‘dependant’, including:

  • Overseas forces tax offset
  • Zone tax offset for people living in rural and remote

    areas.

Finally, the Australia-US Joint

Space and Defence Projects tax exemption is only available to a

‘dependant’ of a tax payer.

The

following sections explain that none of these tax credits are available in

respect of a same-sex partner. And they are only available to a birth mother or

birth father of a child born into a same-sex family – thus excluding a

lesbian co-mother and gay co-father.

8.4.1 ‘Dependant’

excludes a same-sex partner and the child of a lesbian co-mother and gay

co-father

For the purposes of tax offsets, a

‘dependant’ includes, amongst others, a ‘spouse’,

‘child’, ‘invalid relative’ and

‘child-housekeeper’.[20]

The offsets relying on the definition of

‘spouse’ will exclude a taxpayer supporting a same-sex partner.

The offsets relying on the definition of

‘child’ will not permit either the lesbian co-mother or the gay

co-father of a child to claim a rebate.

An

‘invalid relative’ is a ‘child’, brother or sister of

the taxpayer who has a disability and who is receiving support or has a

certificate to say he or she cannot

work.[21]

A

‘child housekeeper’ is the ‘child’ of the taxpayer (but

not necessarily under 18 years of age) who is wholly engaged in keeping house

for that taxpayer.[22]

8.4.2 A

same-sex partner cannot access the dependent spouse tax offset

A taxpayer who is not already claiming Family Tax

Benefit B (discussed in Chapter 9 on Social Security) can claim a dependent

spouse tax offset.[23]

The taxpayer will be eligible for the

dependent spouse tax offset if he or she lives with and financially supports a

‘spouse’.[24] Since the

definition of a ‘spouse’ excludes a same-sex partner, a taxpayer

with a same-sex partner can never claim this

offset.[25]

For

the 2005-2006 tax year the maximum dependent spouse tax offset a taxpayer

could claim was $1610.[26] This

means that a same-sex couple who does not qualify for Family Tax Benefit B is

potentially $1610 worse off than an opposite-sex couple in the same

circumstances.

Many people making submissions to the Inquiry talked about

the impact of being denied access to the dependent spouse tax offset:

  • The first thing was when I started employment, I

    found out I could not claim dependent spouse tax rebate even though [my partner]

    was my dependent.[27]

  • When we first moved up here and my partner

    didn’t work for a while. The tax write off for having a dependant for a

    while would have been fantastic. We live in the same house, have the same bank

    account, and pay the same bills.[28]

  • I earn a very good wage and pay very high taxes.

    I am unable to claim my partner as a dependent on my tax return during periods

    where he was not working, as the tax law discriminates between same sex couples

    and heterosexual relationships. Why are tax breaks delivered to heterosexual

    couples, but not to same sex

    couples?[29]

  • I would like to draw your attention to my experience of

    discrimination in the area of dependent spouse tax offset. As a woman in a

    relationship with another woman, I cannot claim the dependent spouse tax offset

    for my partner. We qualify against virtually all the necessary

    criteria:

    • both my partner

      and I are Australian citizens

    • I contributed to

      the maintenance of [my] partner

    • my partner as a

      student receives a tax free scholarship from the federal government, therefore

      is under the threshold for the entitlements of $6,569

    • my partner and I

      were not eligible for the Family Tax benefit (FTB) Part

      B.

However, I was unable to

claim the dependent spouse tax offset for my partner because she does not meet

the definition of “spouse” under the legislation. A

“spouse” must be of the opposite sex to his or her

partner.[30]

  • Shortly I will be an at-home mother, financially

    dependant on my partner. Because our relationship is not recognised, my partner

    will not be able to declare me as a dependant. We will not be able to access

    health or tax concessions available to heterosexual

    couples.[31]

  • My partner and I are not able to enjoy any of the

    tax concessions which are currently available to married or de facto couples.

    Further, my partner did not qualify as a dependent spouse when he was not

    working.[32]

8.4.3 A

same-sex partner cannot access the tax offset for a same-sex partner’s

parent

A taxpayer supporting a parent or spouse’s

parent may claim a tax offset.[33]

Because a same-sex partner does not qualify as

a ‘spouse’, a taxpayer cannot claim this offset if he or she is

maintaining the parent of his or her same-sex

partner.

For the 2005-2006 tax year, the

maximum spouse’s parent tax offset a taxpayer could claim was

$1448.[34] This means that a

same-sex couple who cannot claim this offset is potentially $1448 worse off than

an opposite-sex couple in the same circumstances.

Action Reform Change Queensland and the

Queensland AIDS Council provide the following example of discrimination in

accessing the spouse’s parent tax offset:

...if Natalie’s mother moves in with them and

becomes in need of care and has medical expenses she cannot cover, Penny will

not be able to claim her as a dependent for tax purposes, even if Natalie is

unemployed and Penny is footing all of the

bills.[35]

8.4.4 A

same-sex partner, lesbian co-mother and gay co-father cannot access the

housekeeper tax offset

The housekeeper tax offset is designed to help a

taxpayer who has employed a person full-time to keep house for them and to care

for:

  • a ‘child’ of the taxpayer who is under 21

    years old

  • any other ‘child’ aged under 21 years

    (including a student aged under 21 years) who is the taxpayer’s dependant

    and whose Separate Net Income is less than $1786

  • an ‘invalid relative’ for whom the taxpayer

    can claim a dependant tax offset

  • a ‘spouse’ who receives a disability

    support

    pension.[36]

Because

of the definitions of ‘spouse’, ‘child’ and

‘invalid relative’, a taxpayer in a same-sex family can only claim

this offset if the taxpayer is the birth mother or birth father of a child who

otherwise qualifies under these criteria.

In

other words, it does not permit a person to claim the offset if there is a

housekeeper looking after a same-sex partner or the child of a lesbian co-mother

or gay co-father.

For the 2005-2006 tax year,

the maximum claimable housekeeper tax offset for a taxpayer was $1610, or $1930

if the taxpayer had an eligible dependent child or

student.[37] Thus a same-sex couple

who cannot claim this offset is potentially $1930 worse off than an opposite-sex

couple who can.

ACON expressed concern about

discrimination against same-sex couples regarding this offset:

The Federal Government provides financial assistance to

couples and families who employ carers to look after dependants and spouses who

receive the disability support pension. Same-sex partners who hire a carer to

care for a person living with HIV/AIDS are not eligible to receive the

housekeeper rebate, which amounts to [$1610] a year, because of the definition

of ‘spouse’ under the Income Tax Assessment Act, which

excludes same-sex

couples.[38]

8.4.5 The

lesbian co-mother and gay co-father cannot access the child-housekeeper tax

offset

Where a taxpayer’s ‘child’ (of any

age) is wholly engaged in keeping house for the taxpayer, the taxpayer is

entitled to the child-housekeeper tax

offset.[39]

Because of the definition of

‘child’, this tax offset will only be available to a taxpayer parent

in a same-sex couple if she is the birth mother or he is the birth father of the

child who is keeping house.[40] Neither the lesbian co-mother nor the gay co-father of a child can claim this

offset.

For the 2005-2006 tax year, the

maximum child-housekeeper tax offset a taxpayer could claim was $1610, or $1930

if they had another eligible dependent ‘child’ or

student.[41] This means that a

same-sex parent who cannot claim this offset is potentially $1930 worse off than

an opposite-sex parent who can.

8.4.6 A

lesbian co-mother and gay co-father cannot access the invalid relative tax

offset

A taxpayer who maintains an ‘invalid

relative’ may be entitled to claim the invalid relative tax

offset.[42]

In a same-sex couple only a birth mother

or birth father of the person with a disability can claim this rebate. This is

because the definition of an ‘invalid relative’ relies on the

definition of

‘child’.[43] The lesbian

co-mother and gay co-father cannot claim this

offset.

For the 2005-2006 tax year, the maximum

amount of invalid relative tax offset that a taxpayer could claim was $725 for

each ‘invalid

relative’.[44] This means that

a member of same-sex couple who cannot claim this offset is potentially $725

worse off than an opposite-sex couple who can.

8.4.7 A

same-sex couple gets a smaller overseas forces tax offset

A tax offset is available to Australians who serve

overseas with:

  • a United Nations

    force[45]

  • the Australian Defence Force (in a specified

    overseas locality if their income was not specifically exempt from

    tax).[46]

Both

of these tax offsets are paid at a higher rate if the taxpayer is eligible for a

dependant rebate, including for their ‘spouse’ or

‘child’.[47] A taxpayer

cannot claim a same-sex partner or a child other than a birth child as a

‘dependant’.

In addition to a fixed

amount of $338, a person eligible for the overseas forces tax offset may claim

50% of the sum of other tax offsets for ‘dependants’. This means

that a same-sex partner who is unable to claim a tax offset for a dependant can

only claim the fixed amount of

$338.[48]

8.4.8 A

same-sex couple gets a smaller zone tax offset

Australians who live or work in a remote or isolated

area of Australia are entitled to a zone tax

offset.[49]

This tax offset will be higher where the

taxpayer has a ‘dependant’, including a ‘spouse’ or

‘child’.[50] A taxpayer

cannot claim a same-sex partner or a child other than a birth child as a

‘dependant’.

In addition to a fixed

amount which varies according to the location of work or residence, a person

eligible for the zone tax offset may claim up to 50% of the sum of other tax

offset components for

dependants.[51] This means that a

same-sex partner who is unable to claim a tax offset for a dependant can only

claim the fixed amount.

8.4.9 A

US defence force same-sex partner cannot access tax exemptions

The ‘dependants’ of United States (US)

Defence Forces and civilian employees working at specific US facilities in

Australia are exempt from income tax if they are otherwise taxed in the United

States.[52]

A

same-sex partner cannot claim a tax exemption; nor can the child of a lesbian

co-mother or gay

co-father.[53]

8.5 Do

same-sex and opposite-sex couples get equal access to the senior Australians tax

rebate?

The senior Australians tax offset (also known as the

low income aged persons rebate) is available to taxpayers who meet age and

income eligibility conditions and are eligible for federal government pensions

or similar

payments.[54]

8.5.1 Same-sex

partners face individual income tests

Where a taxpayer has a ‘spouse’, the

combined taxable income of the couple will be assessed against an income test to

determine eligibility for the

offset.[55] However, as a same-sex

partner is not a ‘spouse’ under tax law, both members of a same-sex

couple will be assessed as individuals.

This

different tax treatment will generally benefit a same-sex couple. For example, a

same-sex couple will be advantaged if the individual income of each partner is

less than the individual income test threshold ($39 808) but the combined income

is more than the couple threshold ($62 126). Each member of the same-sex couple

would be able to claim the offset while neither member of an opposite-sex couple

in the same circumstances would be able to do

so.

8.5.2 Same-sex

partners receive a higher rate of offset

The amount of senior Australians tax offset will

depend upon whether the taxpayer has a spouse. Individuals receive a higher

offset than taxpayers who are considered to be members of a

couple.[56] Again, same-sex partners

are treated as individuals. This will often benefit a taxpayer who is in a

same-sex relationship. For example:

Fred and Eva are a married couple who are both eligible

for the senior Australians tax offset.

  • Fred’s taxable income is $25 000 and his

    tax offset is

    $757.[57]

  • Eva’s taxable income is $16 000 and her

    tax offset is

    $1602.[58]

This opposite-sex couple’s total tax offset is $2359.

Fred and John are a same-sex couple who are each

eligible for the senior Australians tax offset.

  • Fred’s taxable income is $25 000 and his

    tax offset is

    $1817.[59]

  • John’s taxable income is $16 000 and his

    tax offset is

    $2230.[60]

This same-sex couple’s total tax offset is $4047.

8.5.3 Any

unused entitlement cannot be transferred to a same-sex partner

One same-sex partner is not able to transfer any

unused offset entitlement to the other

partner.

If a taxpayer is eligible for the

senior Australians tax offset and his or her spouse is eligible for either the

senior Australians tax offset or the pensioner tax offset, any unused portion of

either person’s offset may be transferred to the other

person.[61] As a same-sex partner is

not considered a spouse, she or he cannot take advantage of this benefit.

The following is based on an example from the

ATO:

Sonya is married to Russell and they lived together for

the whole [income tax] year. Russell – who is a veteran – received a

service pension. Sonya and Russell were both over pension age and their combined

taxable income was less than $62 126. They were both eligible for the senior

Australians tax offset. Sonya’s taxable income was $20 800 and

Russell’s was $10 200. Sonya is eligible for a senior Australian tax

offset of $1283, while Russell is eligible for the full offset of

$1602.

However if Russell only owes tax of $485 then the

remainder of his offset ($1117) can be transferred to Sonya, who can claim a

total tax offset of

$2400.[62]

As

a taxpayer in a same-sex relationship cannot transfer any unused offset to their

partner, any excess amount that is not absorbed against his or her tax will be

lost.

8.6 Can

same-sex couples claim the baby bonus?

It is unclear whether the baby bonus is available to a

lesbian co-mother or gay co-father.

8.6.1 The

baby bonus is available to one parent only

The first-child tax offset, known as the ‘baby

bonus’, was available to a parent having or adopting a child in the years

2001-2004.[63] Only one parent,

usually the birth mother, could claim the

offset.[64]

The bonus is calculated according to the

parent’s reduction in income in the tax years after they gained

responsibility for a child.[65] It

is paid for the income years up to and including the year the child turns

five.[66] While this offset has now

been repealed, eligible taxpayers may continue to claim for the income years up

to and including the year ending 30 June 2009.

8.6.2 A

‘natural parent’ has the primary entitlement

The relevant part of the Income Tax Assessment Act

1997 refers to a tax offset for a person’s ‘child’, which is

defined as including a ‘person's adopted child, step-child or ex-nuptial

child’.[67] This would exclude

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

On the other hand, the offset becomes

available when a person has a ‘child event’. And this occurs when a

person becomes ‘legally responsible for a

child’.[68]

As explained in Chapter 5 on Recognising

Children, a lesbian co-mother or gay co-father with a parenting order from the

Family Court of Australia can be a person ‘legally responsible for a

child’.

However, the tax legislation

sets out a hierarchy of who gets the primary entitlement to the offset, putting

the ‘natural’ and adoptive parents

first.[69] Thus, it seems that a

same-sex parent with a parenting order will only have access to the baby bonus

if there is no other person who can claim the rebate.

8.6.3 A

‘natural parent’ cannot transfer the entitlement to a same-sex

partner

A parent with the primary entitlement can transfer the

baby bonus to his or her

‘spouse’.[70] This

transfer can be valuable if the partner to whom the baby bonus is transferred

would receive a higher payment for that

year.[71] However, because a

same-sex partner is not a ‘spouse’ the birth mother cannot transfer

the entitlement to her lesbian

partner.[72]

8.7 Can

same-sex couples claim the child care tax rebate?

The child care rebate covers 30% of out-of-pocket

child care expenses for approved child care. The maximum amount claimable is

$4000 per year for each eligible

child.[73] The rebate is not

‘refundable’ and so does not generate cash in hand. Instead, like

most dependant rebates, it reduces the amount of income tax paid by an eligible

taxpayer.[74]

8.7.1 Payments

by a lesbian co-mother or gay co-father may attract the rebate

To

be eligible for the child care tax rebate, an individual must be entitled to

Child Care Benefit at least one week in a

year.[75]

Chapter 9 on Social Security explains that

eligibility for Child Care Benefit depends on whether the child is an ‘FTB

child’ of the taxpayer or the taxpayer’s partner. A person who has

legal responsibility for a child is considered to have an ‘FTB

child’.[76]

As

discussed in Chapter 9, this definition of ‘FTB child’ would likely

include the child of a lesbian co-mother or gay co-father with a parenting

order, as well as the child of a birth mother or birth

father.

However, eligibility for the rebate may

be restricted by the definition of ‘child’ in the Income Tax

Assessment Act 1997. Thus, the rebate may only be available for the child of a

birth mother or birth father (even though eligibility for Child Care Benefit may

extend beyond those birth

parents).[77]

8.7.2 Payments

by a same-sex partner do not attract the rebate

The child care tax rebate applies when child care

payments are made by an eligible person or his or her

‘partner’.[78] ‘Partner’ is limited to a member of an opposite-sex

couple.[79]

This

means that any child care payments made by the same-sex partner of a person

eligible for the rebate cannot be counted in calculating the amount of child

care rebate to which that person is

entitled.[80] In contrast, payments

made by a partner of an eligible person in an opposite-sex couple can be counted

towards the approved fees in calculating the rebate. This will increase the

available amount of the rebate for that member of the opposite-sex couple (up to

a ceiling limit of $4000 per child).

8.7.3 A

same-sex partner cannot transfer the unused value of the rebate

A person in a same-sex couple cannot transfer any

unused value of the child care rebate to their same-sex partner in order to

minimise tax in a specific tax

year.[81] This is because of the

narrow definition of ‘spouse’ in the tax legislation. In contrast, a

person in an opposite-sex couple can transfer the unused value of the rebate to

their partner, thereby potentially saving a large amount of tax.

The ATO provides the following example of how

unused child care tax offset may be transferred:

Sean and Evelyn are [a de facto couple] with two children.

Both children attended approved child care in 2004-2005. Sean is the manager of

a local IT company and Evelyn is studying full time. Since Evelyn is the Child

Care Benefit claimant she must be the parent to claim the 30% child care tax

rebate. In July 2006, Evelyn visits the Tax Office website and discovers that

she does not need to lodge a tax return as she received no income during the

2005-06 income year. Evelyn can transfer her 30% child care tax rebate to Sean

to help reduce his tax

liability.[82]

The

transfer function can amount to a significant amount of money. For example:

If the total rebate available was:

  • David (for after school care) - $1500
  • Bella (for long day care) -

    $3735

A total rebate of $5325 would be

available to Evelyn. Even though she pays no tax Sean can take advantage of this

rebate.[83]

8.7.4 Restrictions

on transfer may result in no rebate at all

Restrictions on transferring the value of the rebate

between same-sex partners may result in a same-sex couple being denied the child

care rebate completely.

As indicated above,

the rebate is not a ‘cash in hand’ refund. Instead, like most

dependant rebates, it reduces the amount of income tax paid by an

individual.[84] The rebate is only a

benefit if a person has a tax liability in the year in which they claim the

rebate.

The following example illustrates how

a same-sex couple may lose the benefit of the rebate despite making eligible

child care payments.

Anna and Christine are a same-sex couple raising a

child, Joe, aged 4. Anna, who is the birth mother of Joe, is the Child Care

Benefit claimant. She also pays the child care fees for the 2004-2005 income

year. In 2005-2006 she is eligible for the child care tax offset. However, in

that year, she has taxable income of only $7000 from a casual job and so pays no

income tax as a result of the tax-free threshold and low income tax

rebate.

Anna cannot transfer the rebate to her partner

Christine who has a much higher income and has been supporting the family. Even

if Christine pays the child care fees as Anna’s ‘partner’, she

will not be eligible for the child care

rebate.[85]

8.8 Do

same-sex couples have to spend more to access the medical expenses tax

offset?

In addition to the Medicare Safety Net described in

Chapter 11 on Health Care, if a taxpayer spends over $1500 in net medical

expenses, they may claim a 20% rebate for medical expenses over that

sum.[86] This rebate is not a refund

but reduces the taxpayer’s income tax.

The taxpayer can meet the threshold of $1500

by adding up his or her own expenses and the expenses paid on behalf of a

‘dependant’.[87] A

‘dependant’ includes the ‘spouse’ or ‘child’

of the taxpayer.[88]

These definitions exclude a same-sex partner

and the child of a lesbian co-mother or gay

co-father.

So, a taxpayer in a same-sex

relationship can only meet the spending threshold on his or her own expenses.

The parent of a person in a same-sex

relationship told the Inquiry:

My son and his partner are not second class citizens but

this is how the government treats them. Their costs are higher because they

can’t combine their expenses. When my son was sick his partner paid most

of the bills but couldn’t claim tax benefits because they were not

recognised as a

couple.[89]

8.9 Do

same-sex couples pay a higher Medicare levy and surcharge?

The Medicare levy is a tax imposed upon personal

incomes to fund the Medicare scheme. It is composed of two parts, the general

Medicare levy and the Medicare surcharge.

8.9.1 Same-sex

couples may pay a higher Medicare levy

The Medicare levy is 1.5% of an individual’s

taxable income.[90] However, at low

levels of income the levy may reduce according to either individual or family

income. Further, a taxpayer may be exempt from the levy depending, in part, on

family circumstances.[91]

(a) It

may be harder for a same-sex family to get an exemption

A Medicare levy exemption is available to an

individual taxpayer whose income is less than $16

284.[92]

A

Medicare levy exemption is also available to a taxpayer:

  • with a married or de facto spouse; or
  • who is entitled to a dependent

    rebate

if their family income (the

combined income of a taxpayer and his or her spouse) is less than $27 478. The

family income threshold increases for each dependent child or

student.[93]

A taxpayer in a same-sex relationship can only

receive an exemption if his or her income is under the individual income

threshold exemption ($16 284). This may be an advantage or disadvantage to a

same-sex couple – depending on the income levels of each member of the

couple.

In addition, a person will be eligible

for the Medicare levy exemption if he or she is a ‘prescribed

person’.[94] A

‘prescribed person’ who has dependants will only qualify for the

exemption if his or her dependants are also:

  • in an exemption category, or
  • the dependants of a ‘spouse’ who had to pay

    the Medicare

    levy.[95]

A taxpayer in a same-sex couple

may be disadvantaged by this test because his or her birth children will not be

considered the ‘dependants’ of his or her same-sex

partner.[96] Further, a same-sex

couple cannot complete a ‘family agreement’ determining which parent

will pay the half levy for joint

dependants.[97]

(b) It

may be harder for a same-sex family to qualify for a reduced Medicare

levy

If an individual’s income is more than $16 284,

or the family income is more than $27 478, the Medicare levy is phased in at a

rate of 20 cents for each dollar over the

threshold.

But a reduction in the Medicare

levy, based on family income, is only available to taxpayers on low incomes if

the taxpayer:

  • has a spouse
  • was entitled to a child-housekeeper or housekeeper tax

    offset

  • has been a sole

    parent.[98]

The

definitions of both ‘spouse’ and ‘child’ in Medicare

levy legislation adopt those in income tax

law.[99] This means that a taxpayer

in a same-sex relationship is excluded from any reduction in the general

Medicare levy if his or her eligibility relies on a relationship with a spouse

or a child who is not a birth

child.[100]

Whether this is an advantage or disadvantage

to a same-sex couple depends on the income levels of each member of the

couple.

(c) Impact

of the Medicare levy on same-sex couples

A range of submissions to the Inquiry commented on the

impact of being denied access to a reduced Medicare levy.

At the Townsville Forum, a same-sex couple

told the Inquiry:

Under the Medicare Levy Act 1986, the eligibility

of a taxpayer for payment of the Medicare Levy is decreased if they have a

dependent spouse. This option is not available for same-sex interdependent

couples as the law excludes same-sex partners from the definition of a

‘spouse’.[101]

The

Law Institute of Victoria told the Inquiry:

Taxpayers can claim an exemption or reduction in the

Medicare levy payable if they meet certain income threshold requirements. Based

on the definition of ‘spouse’, taxpayers in same-sex relationships

cannot benefit from access to low income exceptions for

families.[102]

8.9.2 Same-sex

couples may pay a higher Medicare levy surcharge

The Medicare levy surcharge is an additional 1% of

taxable income payable where:

  • a person’s income is above the relevant threshold;

    and

  • the person or his or her ‘spouse’ do

    not have private health insurance for the tax

    year.[103]

For the 2005-2006 tax year, the

surcharge threshold was $50 000 for an individual and $100 000 for a

family.[104] The family threshold

increases by $1500 for each dependent child when there is more than

one.[105] The family threshold is

met by a person’s taxable income plus the taxable income of a

spouse.[106]

(a) Same-sex

partners are assessed on individual thresholds

Since same-sex partners are excluded from the

definition of a ‘spouse’, taxpayers who are in same-sex

relationships are assessed under the individual rather than the family

threshold.

This can disadvantage a same-sex

couple. For example, if one partner in a same-sex couple was earning $40 000 and

the other $59 000 the latter partner would be required to pay a surcharge of

$590 because $59 000 is over the $50 000 individual threshold. However, an

opposite-sex couple in the same situation would not pay any surcharge because

the joint income of the two partners ($99 000) is under the family threshold of

$100 000.[107]

(b) Impact

of the Medicare levy surcharge thresholds on same-sex couples

A range of submissions to the Inquiry commented on the

impact of this discrimination in the Medicare levy

surcharge.

The submission from Action Reform

Change Queensland and the Queensland AIDS Council included the following

personal story:

My partner actually did our tax return one year on E TAX

and it didn’t have the tick box that you answer, asking you whether you do

or don’t have a partner of the opposite sex, just whether you have a

partner. She ticked ‘yes’ and we paid over $500 less tax that year.

Being unsure of the legality of this my partner checked it out with a ‘tax

info person’. She was told that we should pay the higher amount, i.e. for

two single person’s tax, but we didn’t opt to do that. I guess we

would have been fined for being illegal if we’d been audited and

that’s

ridiculous.[108]

Trish

Kernahan told the Inquiry:

The Federal government’s refusal to define the term

‘spouse’ to include people in same sex relationships costs me over

$800 every year in additional tax via the Medicare Levy. I earn over $50,000

p.a. which is the levy limit set for ‘single’ people but less than

the $100,000 limit set for a heterosexual person with a dependent

spouse.[109]

Another

person reported:

On February 2006, [Mr A] was sent a letter by the

Australian Taxation Office (ATO) claiming that he owed $545.95 for a Medicare

Levy Surcharge... While [Mr A] exceeded the individual person threshold

($50,000), [Mr A] and [Mr B] as a married family did not exceed the combined

threshold for a married couple with no children

($100,000).[110]

8.10 Do

same-sex couples pay more tax on relationship breakdown?

The transfer of property to a spouse or child

following family breakdown may attract favourable tax treatment. Further, income

earned on property held for the benefit of a child after a relationship

breakdown may also be eligible for favourable treatment. These concessions are

not available to same-sex families.

8.10.1 Same-sex

couples pay capital gains tax when transferring property to a

partner

Favourable capital gains tax treatment is available for

transfer of property to a ‘spouse’ or ‘former spouse’

following a relationship breakdown. However, a transfer to a same-sex partner is

not a transfer to a ‘spouse’ so same-sex couples do not enjoy these

benefits.

As explained by Miranda

Stewart:

Effectively, the tax on any capital gain in the assets

transferred to the spouse is deferred and the gain is taxable only on the

subsequent disposal of those assets by the

spouse.[111]

(a) Only

a ‘spouse’ can attract the favourable tax treatment

The property transfer only attracts the favourable tax

treatment if the transfer is made:

  • under a federal court order issued by the Family Court of

    Australia

  • under a state or territory court order dealing with

    property division in de facto relationships

  • pursuant to a binding financial or written

    agreement.[112]

As

discussed in Chapter 12 on Family Law, a state and territory court can issue

property division orders in relation to same-sex couples. However, because of

the narrow definition of ‘spouse’ under tax law, these court-ordered

transfers still do not attract favourable tax

treatment.[113]

(b) Impact

on same-sex couples

The burden of this discrimination is described in a

recent decision of the Administrative Appeals

Tribunal.

In The Roll-over Relief Claimant

and Commissioner of Taxation the applicant and her partner faced a bill for

capital gains tax of $19 262 and $22 780 respectively on relationship

breakdown.[114] An opposite-sex

couple in the same situation would pay no capital gains tax on this property

transfer.

The Victorian Gay and Lesbian Rights

Lobby provided another example of the impact on same-sex couples:

Jane and Sarah have been in a relationship for 8 years. On

breakdown of the relationship, under state relationship property laws, Jane

transfers some shares to Sarah. The shares cost $3000 in the year 2000 and are

currently worth $7000.

The transfer of the shares from Jane to Sarah will lead to

a capital gains tax liability for Jane, calculated on [50% of] the amount of

appreciation in value of the shares, being $7000 – $3000 = $4000 [x 50%],

even if the shares are transferred as a gift, as the transfer will be deemed to

take place for market value

consideration.[115]

In contrast, if Jane and Sarah were an opposite-sex couple

and Jane agreed to transfer the shares as part of a court order or maintenance

agreement under either the Family Law Act 1975 (Cth) or state property

relationship legislation, the transfer of the shares would not attract capital

gains tax at that time. Instead, Sarah would be deemed to acquire the shares at

a cost of $3,000 (Jane’s original cost). Capital gains tax would only

apply at a time in the future when Sarah decides to sell the

shares.[116]

8.10.2 Same-sex

couples do not pay GST when transferring property

A goods and services tax (GST) applies to most

transactions involving the supply of goods and

services.[117] However, the ATO

has determined that the transfer of assets as a result of matrimonial property

division will not usually be subject to GST because of the private nature of the

transaction.[118]

The term ‘matrimonial property

division’ is not defined, but the ATO ruling specifically states that the

directions apply to property distributions between ‘de facto or same-sex

relationship

breakdown’.[119]

This means that same-sex couples will not

usually be liable to pay GST on property transfers arising from an agreement

concerning property division on relationship breakdown.

8.10.3 Same-sex

families pay tax on property held for a child

Favourable tax treatment is available for income

earned on property that has been transferred to a child, or a trustee on behalf

of a child, if such a transfer is ‘the result of a family

breakdown’.[120] The

property transfer must be pursuant to an order, determination or assessment for

maintenance of the child, which could include an order for child support under

the Child Support (Assessment) Act 1989 (Cth).[121] Without this

favourable tax treatment, the income would be taxable at a penalty

rate.

(a) A

family breakdown excludes separation of same-sex couples

The Income Tax Assessment Act 1936 states that a

family breakdown occurs when:

a person ceases to live with another person as the spouse

of that person on a genuine domestic basis (whether or not legally married to

that person).[122]

Since a same-sex partner is not a

‘spouse’ this provision does not cover a separating same-sex

couple.[123]

(b) Impact

on same-sex couples

The effect of the family breakdown provision is that a

same-sex couple transferring property to a child (or a trustee on behalf of a

child) when their relationship breaks down will be taxed at the top marginal

rate. An opposite-sex couple in the same situation will be taxed at normal

marginal rates, which usually are much

lower.

Miranda Stewart explains the impact of

this exclusion as follows:

On breakdown of an opposite-sex marriage or de facto

couple relationship, a taxpayer may establish a child maintenance trust for the

financial support of children of the relationship. The income of such a trust

[is] exempted from the penal “children’s tax” rules that

usually apply tax at (approximately) the top individual marginal rate in respect

of income of minor children.[124] The income from such trusts is taxable at normal marginal tax rates to the

trustee; where the child has no or little other income, this means that a low

rate of tax will frequently apply...

For a child maintenance trust to be eligible for this tax

concession, the contributing parent must have maintenance obligations in respect

of the child and the contributions must be made because of a family

breakdown.[125]

For

example, shares may be transferred to a trust for the benefit of a child

following an eligible family breakdown. Dividends earned on the shares held on

trust for the child will be taxed at normal marginal rates in respect of that

child, rather than at a penalty rate equal to the top individual

rate.

8.10.4 Same-sex

couples pay tax on maintenance payments

A ‘spouse’ or ‘former spouse’

receiving maintenance payments for him or herself or a child does not have to

pay income tax on those

payments.[126]

Since a same-sex partner is not a

‘spouse’, he or she is likely to be liable for income tax on those

periodic

payments.[127]

8.11 Do

same-sex couples pay more capital gains tax?

As noted above, same-sex couples are excluded from a

capital gains tax concession for property that is transferred after a

relationship breakdown.

Two further aspects of

capital gains provisions affect same-sex couples.

Same-sex couples are excluded from a capital

gains tax exemption for an inherited dwelling that was the main residence of the

‘spouse’ of the

deceased.[128] Thus, same-sex

couples have a higher liability for capital gains tax on the death of a partner.

On the other hand, a same-sex couple may have

a tax advantage if they own and live in two separate properties. This is because

capital gains tax is not payable on capital gains on a dwelling that is the

taxpayer’s main

residence.[129]

If a person lives in a separate main dwelling

from their ‘spouse’, they must either choose one of the residences

or nominate both as their main residences. If both are nominated, the capital

gains tax exemption is split.[130]

Same-sex couples are not subject to this

provision. So, if a same-sex couple owns and lives in two separate properties,

they may legitimately claim an exemption for each

residence.[131]

8.12 Are

employers liable for more fringe benefits tax in respect of same-sex

couples?

Fringe

benefits tax (FBT) is assessed on an employer who provides benefits such as

loans, free housing or other benefits to an employee or his or her

‘associates’.

8.12.1 A

same-sex partner is not an ‘associate’

An ‘associate’ includes a

‘spouse’, ‘relative’, or

‘child’.[132] The Fringe Benefits Tax Assessment Act 1986 (Cth) defines all these terms by

reference to the Income Tax Assessment Act

1997.[133] This means that a

same-sex partner and his or her relations would not be included when considering

liability for FBT.

8.12.2 There

may be FBT where a same-sex partner gets benefits under an

‘arrangement’

The ATO accepts that same-sex partners are not

‘associates’ under the legislation. But a same-sex partner will be

treated as receiving a fringe benefit if there is an

‘arrangement’.[134] It

seems likely that where a fringe benefit is provided to a same-sex partner of an

employee, an ‘arrangement’ will be found to exist in many cases such

that this integrity provision will apply.

8.12.3 Same-sex

partners are not eligible for FBT ‘spouse’

exemptions

However, a same-sex partner is not covered by a range

of FBT exemptions available to a ‘spouse’.

For example, FBT is not payable on the

following benefits for a ‘spouse’ or ‘child’:

  • provision of accommodation, residential fuel and

    meals to a residential employee during a period of

    accommodation[135]

  • benefits provided by a religious employer to an

    employee who is a religious practitioner, or to their spouse or

    child[136]

  • provision of transport benefits for an employee

    and a ‘close relative’ of the employee if they are used to attend

    the funeral of a ‘close relative’ of the

    employee.[137]

Since

a same-sex partner is not a ‘spouse’ there will be no FBT exemption

if a same-sex couple enjoys these benefits.

8.12.4 Same-sex

couples may not benefit from salary packaging

Employment benefits which are FBT-exempt can be used

for salary packaging. Salary packaging allows an employee to receive less income

as salary and to receive non-taxable benefits for the benefit of themselves or

an eligible spouse or child. These benefits will not be available to a same-sex

couple.

Dr Jeremy Field talks about salary

packaging in the public health service:

My small contribution to this inquiry concerns an

employment benefit of working, as I do, for the public health service. Salary

packaging is available to employees of ‘public benevolent

institutions’ and allows certain personal expenses to be claimed as fringe

benefits – free of tax. These expenses may be incurred under the

employee's name or their partner's, providing they be of opposite sex. I would

like to echo the feeling of being a ‘first-class taxpayer but second-class

citizen’ expressed by others making submissions to this

inquiry.[138]

8.13 Are

same-sex couples covered by tax integrity and anti-avoidance

measures?

Tax law contains numerous anti-avoidance

measures.[139] For

example:

  • a taxpayer is not entitled to deduct a payment to

    a ‘relative’ from an income assessment if it exceeds a reasonable

    amount[140]

  • rules that deem loans or payments to be dividends

    from private companies generally apply to loans or payments to a shareholder or

    his or her

    ‘associates’.[141]

‘Associate’

is variously defined within different provisions, but includes a

‘relative’, ‘child’ or ‘spouse’ of the

taxpayer in all instances.[142] All of these definitions exclude same-sex partners and children other than birth

children.

This means that anti-avoidance rules

relating to ‘spouse’ or family of a taxpayer may not apply to

same-sex couples.

However, it should be noted

that the general income tax anti-avoidance rule in Part IVA of the Income Tax

Assessment Act 1936 may apply to transactions entered into for the dominant

purpose of obtaining a tax benefit, whether or not a same-sex partner is

included in the definition of

‘spouse’.[143] Further, some anti-avoidance rules specifically exclude ‘ordinary family

or commercial dealing’.[144] It is unclear whether the provision of a benefit to a same-sex partner would

qualify as ‘ordinary’ family dealing for this purpose. But it may be

the case that same-sex couples are not accorded the safe harbour that is

available for opposite-sex spouses.

8.14 Does

tax legislation breach human rights?

This chapter identifies a

number of taxation laws which fail to ensure that same-sex and opposite-sex

couples and families enjoy the same taxation

benefits.

The failure of tax legislation to

recognise same-sex couples and, in some circumstances, the lesbian co-mother or

gay co-father of a child, amounts to discrimination in breach of article 26 of

the International Covenant on Civil and Political Rights (ICCPR).

The failure to ensure that same-sex parents

can access the tax concessions and rebates available to assist opposite-sex

parents support their children, results in further breaches of Australia’s

obligations to protect the rights of families without discrimination. Those

rights are protected by the ICCPR (articles 23(1), 2(1)) and the International Covenant on Economic Social and Cultural Rights (ICESCR)

(articles 10,

2(2)).

The

fact that lesbian and gay families will often pay more tax than opposite-sex

families, just because of the sexuality of the parents, may also breach the Convention on the Rights of

the Child (CRC) because:

  • A same-sex family will be at a financial disadvantage

    when compared to an opposite-sex family in the same position. This amounts to discrimination against the child on the basis of the status of his or her

    parents (CRC, article 2(2)).

  • The best interests of a child being raised in a

    same-sex family are not a primary consideration – if they were, the people

    raising a child would be entitled to the same tax benefits irrespective of their

    sexuality (CRC, articles 2(1), 3(1)).

  • The tax provisions do not recognise and support the

    common responsibilities of both same-sex parents to fulfil

    child-rearing responsibilities – in particular tax legislation does not

    recognise the responsibilities of the lesbian co-mother or gay co-father of a

    child (CRC, articles 18,

    2(1)).

Finally, under ICESCR, any

steps Australia takes to guarantee the right to social security (including tax

concessions intended to assist individuals and families in certain

circumstances) must occur without discrimination (articles 9, 2(2)). The

discriminatory treatment of same-sex couples and families in taxation law may

breach this right.

Chapter 3 on Human Rights

Protections describes Australia’s human rights obligations towards

same-sex couples and families in more detail.

8.15 How

should tax legislation be amended to avoid future breaches?

It is clear that same-sex couples and families are

denied access to a range of tax offsets and concessions which are available to

opposite-sex de facto couples and parents.

The

Inquiry recommends amending the legislation to avoid future breaches of the

human rights of people in same-sex couples.

The

following sections summarise where the problems lie and how to fix

them.

8.15.1 Narrow

definitions are the main cause of discrimination

Same-sex couples are worse off than opposite-sex

couples because the definitions in the taxation legislation fail to include

same-sex couples and families.

In particular,

the narrow definition of ‘spouse’ in the Income Tax Assessment Act

1997 has a huge impact on same-sex couples because most other tax legislation

refers back to this definition.

The definition

of ‘child’ in the Income Tax Assessment Act 1997 is also problematic

because it excludes one of a child’s parents where a child is born to a

gay or lesbian couple.

8.15.2 The

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

child

Since the main problem is the narrow scope of

legislative definitions, the solution is to amend those definitions so they are

inclusive, rather than exclusive, of same-sex couples and

families.

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 Income Tax

    Assessment Act 1997)

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

    couples (for example, redefine ‘spouse’ 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 (an ART child). 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 or 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 the definition of

‘child’.

t 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 current definition.

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 gay and lesbian

parents with parenting orders could more confidently assert their rights as

people who are ‘legally

responsible’.

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 approach set out in Chapter 4, then

different amendments would be required.

8.15.3 A

list of legislation to be amended

The Inquiry recommends amendments to the following

legislation discussed in this chapter:

A New Tax

System (Family Assistance) Act 1999 (Cth)

‘member of a couple’ (s 3 – no need to

amend if ‘member of a couple’ is amended in the Social Security

Act 1991 (Cth) (Social Security Act))

‘partner’ (s 3 – no need to amend if

‘member of a couple’ is amended in the Social Security

Act)

‘FTB child’ (s 22 – 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)

Fringe Benefits Tax Assessment Act

1986 (Cth)

‘associate’ (s 136(1) – no need to amend

if ‘spouse’ is amended in the Income Tax Assessment Act 1997 (Cth) (Income Tax Assessment Act 1997) 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’ in the Income Tax

Assessment Act 1997)

‘child’ (s 136(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 136(1) – no need to amend

if ‘spouse’ is amended in the Income Tax Assessment Act 1997 and a

lesbian co-mother or gay co-father may be recognised as a parent through

reformed parenting presumptions, adoption laws or a new definition of

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

‘spouse’ (s 136(1) – no need to amend if

‘spouse’ is amended in the Income Tax Assessment Act

1997)

Income Tax Assessment Act 1936 (Cth)

‘associate’ (s 318 – no need to amend if

‘spouse’ is amended in the Income Tax Assessment Act 1997 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’ in the Income Tax Assessment Act 1997)

‘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)

‘child-housekeeper’ (s 159J(6) – 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)

‘dependant’ (s 251R – no need to amend

if ‘spouse’ is amended in the Income Tax Assessment Act 1997;

‘member of a couple’ is amended in the Social Security Act; 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’ in the Income Tax Assessment Act 1997)

‘invalid relative’ (s 159J(6) – 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 in the Income Tax Assessment Act 1997 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 Assessment Act

1997)

Income Tax Assessment Act 1997 (Cth)

‘child’ (s 995-1(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’)

‘child event’ (s 61-360(a) – no need to

amend if ‘legally responsible’ is amended and the child of a lesbian

co-mother or gay co-father may also be recognised through reformed parenting

presumptions or adoption laws)

‘de facto partner’ (insert new

definition)

‘de facto relationship’ (insert new

definition)

‘legally responsible’ (s 995-1(1) –

amend to clarify that a parenting order is evidence of legal

responsibility)

‘partner’ (s 61-490(1)(b) – no need to

amend if ‘member of a couple’ is amended in the Social Security

Act)

‘relative’ (s 995-1(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(1)

– amend to include a ‘de facto partner’)

‘step-child’ (insert new

definition)

Medicare Levy Act 1986 (Cth)

The Medicare Levy Act 1986 (Cth) does not define

the relevant terms, but relies on definitions in the Income Tax Assessment

Act 1936 (Cth) (s 3(1)). Changes to that Act will automatically change

definitions in the Medicare Levy Act 1986 (Cth).

Social Security Act 1991 (Cth)

‘de facto partner’ (insert new

definition)

‘de facto relationship’ (insert new

definition)

‘marriage-like relationship’ (s 4(2), (3),

(3A) – replace with ‘de facto relationship’)

‘member of a couple’ (s 4(2)(b) – amend

to include a ‘de facto partner’ and ‘de facto

relationship’)

‘partner’ (s 4(1) – no need to amend if

‘member of a couple’ is amended)


Endnotes

[1]Australian

Coalition for Equality, Submission 228; Tasmanian Gay and Lesbian Rights Group,

Submission 233; ACON, Submission 281; Action Reform Change Queensland and

Queensland AIDS Council, Submission

270.
[2] In addition, the federal government assesses fringe benefits tax on employers

under the Fringe Benefits Tax Assessment Act 1986 (Cth) and goods and

services tax under A New Tax System (Goods and Services Tax) Act 1999 (Cth) and related

legislation.
[3] Income Tax Assessment Act 1997 (Cth), s

995-1(1).
[4] Income Tax Assessment Act 1936 (Cth), s

6(1).
[5] Gregory Brown v Commissioner for Superannuation (1995) 21 AAR 378, para

62.
[6] See for example the following: Australian Taxation Office, Interpretative

Decision 2002/211; Australian Taxation Office, Interpretative Decision

2002/826.
[7] Income Tax Assessment Act 1997 (Cth), s

995-1(1).
[8] Income Tax Assessment Act 1936 (Cth), s

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

Terms.
[10] See further Chapter 5 on Recognising

Children.
[11] Melbourne Forum, 26 September

2006.
[12] Jim Woulfe, Opening Statement, Sydney Hearing, 26 July 2006.
[13] Dylan Deinert, Submission

242.
[14] Name Withheld, Submission

83.
[15] Lynne Martin, Submission

38.
[16] Name Withheld, Submission

267.
[17] Australian Taxation Office, About tax offsets,

http://www.ato.gov.au/individuals/content.asp?doc=/content/19605.htm, viewed 20

February 2007. See also Tasmanian Gay and Lesbian Rights Group, Submission 233;

Action Reform Change Queensland and Queensland AIDS Council, Submission 270;

Young Lawyers Human Rights Committee, Submission 311; Victorian Gay and Lesbian

Rights Lobby, Submission 256; Law Council of Australia, Submission 305;

Australian Coalition for Equality, Submission 228; Anti-Discrimination

Commission Queensland, Submission

264.
[18] The Australian Tax Office’s view is that a taxpayer will be maintaining a

dependant if:

  • they and their dependant lived in the same house
  • they gave their dependant food, clothing and lodging, or
  • they helped them to pay for their living, medical and

    educational costs.

Australian Taxation

Office, Dependants and separate net income,

http://www.ato.gov.au/individuals/content.asp?doc=/content/19187.htm&page=2&H2,

viewed 14 February 2007. ‘Maintaining’ is not defined in taxation

legislation.
[19] Australian Coalition for Equality, Submission 228. See also Law Council of

Australia, Submission

305.
[20] Income Tax Assessment Act 1936 (Cth), s 159J(2). See also the Australian

Taxation Office, Dependants and separate net income,

http://www.ato.gov.au/individuals/content.asp?doc=/content/19187.htm&page=1&H1,

viewed 14 February

2007.
[21] Income Tax Assessment Act 1936 (Cth), s 159J(6). This rebate is payable

in addition to the housekeeper tax offset: Income Tax Assessment Act 1936 (Cth), s

159L.
[22] Income Tax Assessment Act 1936 (Cth), s

159J(6).
[23] Australian Taxation Office, Dependent spouse tax offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/19201.htm, viewed 20

February 2007; Australian Taxation Office, Family tax benefit (FTB) –

introduction,

http://www.ato.gov.au/individuals/content.asp?doc=/content/21556.htm&page=1&H1,

viewed 20 February 2007. See also Miranda Stewart, Submission 266; The Treasury, Tax Expenditures Statement 2006, Item A31,

http://www.treasury.gov.au/documents/1211/PDF/06_Chapter6.pdf, viewed 14

February

2007.
[24] Income Tax Assessment Act 1936 (Cth), s 159J. Miranda Stewart, Submission

266.
[25] See Australian Taxation Office, Interpretative Decision 2002/211. This

decision applies the Administrative Appeal Tribunal’s decision in Gregory Brown v Commissioner for Superannuation (1995) 21 AAR

378.
[26] Australian Taxation Office, Dependent spouse tax offset,

http://www.ato.gov.au/print.asp?doc=/content/19201.htm, viewed 14 February 2007.

A spouse’s separate net income (SNI) for the period(s) a taxpayer claims a

spouse tax offset reduces the claim by $1 for every $4 by which their SNI

exceeded $282. A spouse tax offset cannot be claimed if a spouse’s SNI was

more than

$6721.
[27] Brisbane Forum, 10 October 2006. See also Bryce Peterson, Opening Statement,

Launceston Forum, 25 September 2006; Action Reform Change Queensland and

Queensland AIDS Council, Submission 270; Lyn Holowaty, Submission 157; Cara

Jones, Submission 118; Victorian Gay and Lesbian Rights Lobby, Submission

256.
[28] Newcastle Forum, 24 October

2006.
[29] Name Withheld, Submission

246.
[30] Name Withheld, Submission 253. See also Alison Treanor and Liz Scott, Submission

136; Michael Wilson and Robert Kings, Submission

169.
[31] Name Withheld, Submission

297.
[32] The Hon Ian Hunter MLC, Submission

306.
[33] Income Tax Assessment Act 1936 (Cth), s 159J. Subsection 159J(1) states

that where a taxpayer contributes to the maintenance of a dependant and the

dependant is a resident, the taxpayer is entitled to a tax offset. Subsection

159J(2) specifies that a dependant includes the parent of the taxpayer or of the

taxpayer’s

spouse.
[34] This rebate is reduced where the spouse’s parent’s income was $286

or more. Australian Taxation Office, Parent or spouse’s parent tax

offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/19362.htm&pc=001/002/005/011/003&mnu=&mfp=&st=&cy=1,

viewed 14 February

2007.
[35] Action Reform Change Queensland and Queensland AIDS Council, Submission

270.
[36] Income Tax Assessment Act 1936 (Cth), ss 159L(1), 159J; Australian

Taxation Office, Housekeeper tax offset,

http://www.ato.gov.au/print.asp?doc=/content/19202.htm, viewed 14 February

2007.
[37] Australian Taxation Office, Housekeeper tax offset,

http://www.ato.gov.au/print.asp?doc=/content/19202.htm, viewed 14 February

2007.
[38] ACON, Submission 281. See also Law Council of Australia, Submission

305.
[39] Income Tax Assessment Act 1936 (Cth), s 159J. Subsection 159J(1) states

that where a taxpayer contributes to the maintenance of a dependant and the

dependant is a resident, the taxpayer is entitled to a tax offset. Subsection

159J(2) specifies that a dependant includes a taxpayer’s

child-housekeeper. Note that the child-housekeeper and dependent spouse tax

offsets are mutually

exclusive.
[40] For definition of ‘child’ see: Income Tax Assessment Act 1997 (Cth), s 995-1(1); Income Tax Assessment Act 1936 (Cth), s

6(1).
[41] Australian Taxation Office, Child-housekeeper tax offset,

http://www.ato.gov.au/print.asp?doc=/content/19211.htm, viewed 14 February

2007.
[42] Income Tax Assessment Act 1936 (Cth), s 159J. Subsection 159J(1) states

that where a taxpayer contributes to the maintenance of a dependant and the

dependant is a resident, the taxpayer is entitled to a tax offset. Subsection

159J(2) specifies that a dependant includes a taxpayer’s invalid

relative.
[43] For definition of ‘child’ see: Income Tax Assessment Act 1997 (Cth), s 995-1(1); Income Tax Assessment Act 1936 (Cth), s

6(1).
[44] Australian Taxation Office, Invalid relative tax offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/19349.htm, viewed 14

February

2007.
[45] Income Tax Assessment Act 1936 (Cth), s

23AB(7).
[46] Income Tax Assessment Act 1936 (Cth), s 79B. See also Australian Taxation

Office, What is the overseas forces tax offset? http://www.ato.gov.au/individuals/content.asp?doc=/content/40488.htm&pa…,

viewed 20 February

2007.
[47] Relevant rebates include those set out in Income Tax Assessment Act 1936 (Cth), ss 159J, 159L and 159K (for the Australian Defence Force rebate only): Income Tax Assessment Act 1936 (Cth), ss 23AB(7),

79B(6).
[48] Income Tax Assessment Act 1936 (Cth), ss 23AB(7), 79AB(4)-(4A).

Australian Taxation Office, Calculating the two components of your

zone/overseas forces tax offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/40485.htm, viewed 19

February 2007; Australian Taxation Office, Calculating the base amount of

your zone/overseas forces tax offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/40492.htm, viewed 19

February

2007.
[49] Income Tax Assessment Act 1936 (Cth), s 79A. See also Australian Taxation

Office, What is the zone tax offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/19529.htm, viewed 20

February

2007.
[50] Relevant rebates include those set out in Income Tax Assessment Act 1936 (Cth), ss 159J-L; Income Tax Assessment Act 1936 (Cth), s

79A(4).
[51] Income Tax Assessment Act 1936 (Cth), s 79A(2). Australian Taxation

Office, Calculating the two components of your zone/overseas forces tax

offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/40485.htm, viewed 19

February 2007; Australian Taxation Office, Calculating the base amount of

your zone/overseas forces tax offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/40492.htm, viewed 19

February

2007.
[52] Income Tax Assessment Act 1936 (Cth), s 23AA. A ‘dependant’

is defined as a spouse, or a relative who is wholly or mainly dependent for

support on the person, excluding certain spouses and dependent relatives who are

ordinarily resident in Australia: Income Tax Assessment Act 1936 (Cth), s

23AA(1). See also Australian Taxation Office, Australia/United States Joint

Space and Defence Projects,

http://www.ato.gov.au/print.asp?doc=/content/22255.htm, viewed 14 February

2007.
[53] For definitions of ‘spouse’ and ‘relative’ see: Income Tax Assessment Act 1997 (Cth), s 995-1(1); Income Tax

Assessment Act 1936 (Cth), s

6(1).
[54] Income Tax Assessment Act 1936 (Cth), s 160AAAA; Australian Taxation

Office, Senior Australians tax offset 2005-2006,

http://www.ato.gov.au/print.asp?doc=/content/76928.htm, viewed 14 February

2007.
[55] Australian Taxation Office, Senior Australians tax offset 2005-2006,

http://www.ato.gov.au/print.asp?doc=/content/76928.htm, viewed 14 February 2007.

For example, for the Senior Australians tax offset, in 2005-2006, the income

threshold for an individual was $39 808 and for a couple was $62 126.
[56] The maximum offset payable to a member of a couple in 2005-2006 is $1602; the

maximum offset payable to an individual in 2005-2006 is $2230: Income Tax

Regulations 1936 (Cth), reg

150AB(2).
[57] $1602 (maximum offset for a spouse) minus 12.5% of the difference between $25

000 (income) and $18 247 (lower taxable income threshold for a spouse). Income

Tax Regulations 1936 (Cth), reg

150AD.
[58] The maximum offset available as her income is less than the lower taxable income

threshold for a spouse. Income Tax Regulations 1936 (Cth), reg

150AD.
[59] $2230 (maximum offset for an individual) minus 12.5% of the difference between

$25 000 (income) and $21 698 (lower taxable income threshold for an individual).

Income Tax Regulations 1936 (Cth), reg

150AD.
[60] The maximum offset available as her income is less than the lower taxable income

threshold for an individual. Income Tax Regulations 1936 (Cth), reg

150AD.
[61] Income Tax Regulations 1936 (Cth), reg 150AE. See also Australian Taxation

Office, Transferring unused tax offset entitlement from your spouse,

http://www.ato.gov.au/individuals/content.asp?doc=/content/36498.htm, viewed 20

February 2007.
[62] This example is partially taken from Australian Taxation Office, Transferring

unused tax offset entitlement from your spouse,

http://www.ato.gov.au/individuals/content.asp?doc=/content/36498.htm, viewed 20

February

2007.
[63] Income Tax Assessment Act 1997 (Cth), ss 61-355,

61-360.
[64] The legislation sets out who has a ‘primary entitlement’ to the

offset: Income Tax Assessment Act 1997 (Cth), ss 61-355,

61-375.
[65] Income Tax Assessment Act 1997 (Cth), ss 61-415-61-430. Australian

Taxation Office, Baby bonus instructions and claim 2006, NAT 6580-6.2006,

Canberra, May 2006. A minimum annual amount of $500 per year is

paid.
[66] Income Tax Assessment Act 1997 (Cth), s 61-355. Section 61-440 provides

an additional tax offset for a child who is in the taxpayer’s care prior

to being

adopted.
[67] Income Tax Assessment Act 1997 (Cth), s

995-1(1).
[68] Income Tax Assessment Act 1997 (Cth), ss 61-355, 61-360. Section 995-1(1)

defines ‘legally responsible’ as meaning: ‘legally responsible

(whether alone or jointly with someone else) for the day-to-day care, welfare

and development of the

child’.
[69] Income Tax Assessment Act 1997 (Cth), s 61-375.
[70] Income Tax Assessment Act 1997 (Cth), s

61-385.
[71] Australian Taxation Office, Baby bonus instructions and claim 2006, NAT

6580-6.2006, Canberra, May

2006.
[72] This has been confirmed by Australian Taxation Office, Interpretative

Decision 2002/826, which relied on the Administrative Appeal Tribunal

decision in Gregory Brown v Commissioner for Superannuation (1995) 21 AAR

378.
[73] Income Tax Assessment Act 1997 (Cth), s

61-495.
[74] Australian Taxation Office, 30% child care tax rebate,

http://www.ato.gov.au/individuals/content.asp?doc=/content/52998.htm, viewed 27

February 2007. To be eligible for the Child Care Rebate, a person must also be eligible for the Child Care Benefit: Income Tax Assessment Act

1997 (Cth), ss 61-470, 61-480. For a discussion of Child Care Benefit see

section 9.7 in Chapter 9 on Social

Security.
[75] Income Tax Assessment Act 1997 (Cth), s 61-470. The entitlement to child

care benefit is determined by the Family Assistance Office: s

61-480(2).
[76] A New Tax System (Family Assistance) Act 1999 (Cth), s

22(2)-(4).
[77] Income Tax Assessment Act 1997 (Cth), s

995-1(1).
[78] Income Tax Assessment Act 1997 (Cth), s 61-490.
[79] The term ‘partner’ is defined as having the same meaning as in the A New Tax System (Family Assistance) Act 1999, which in section 3(1)

defines ‘partner’ as having the same meaning as in the Social

Security Act 1991 (Cth). In subsection 4(2)(b), the Social Security Act

defines ‘partner’ as meaning ‘member of a couple’ where

the relationship is with a person of the opposite

sex.
[80] See Miranda Stewart, Submission

266.
[81] Income Tax Assessment Act 1997 (Cth), s

61-496.
[82] Australian Taxation Office, 30% child care tax rebate case studies,

http://www.ato.gov.au/print.asp?doc=/content/76853.htm, viewed 14 February

2007.
[83] This example is partially taken from Australian Taxation Office, 30% child

care tax rebate case studies,

http://www.ato.gov.au/print.asp?doc=/content/76853.htm, viewed 14 February

2007.
[84] Australian Taxation Office, 30% child care tax rebate,

http://www.ato.gov.au/individuals/content.asp?doc=/content/52998.htm, viewed 27

February 2007.
[85] See also Action Reform Change Queensland and Queensland AIDS Council, Submission

270.
[86] Income Tax Assessment Act 1936 (Cth), s 159P(3A). See also, Australian

Taxation Office, Net medical expenses tax offset,

http://www.ato.gov.au/individuals/content.asp?doc=/content/19181.htm, viewed 27

February 2007. Net medical expenses are the medical expenses paid less any

refunds from Medicare or private health

funds.
[87] Income Tax Assessment Act 1936 (Cth), s

159P(1).
[88] Income Tax Assessment Act 1936 (Cth), s 159P(4). ‘Dependant’

also includes persons for whom the taxpayer is entitled to a rebate under

section 159J, such as a parent or spouse’s parent, a child-housekeeper, or

an invalid relative: Income Tax Assessment Act 1936 (Cth), s 159P(4)(c).

See also Law Council of Australia, Submission

305.
[89] Person A, Parents and Friends of Lesbians and Gays, Brisbane Hearing, 11 October

2006.
[90] Medicare Levy Act 1986 (Cth), s 6. See also Australian Taxation Office, What is the Medicare levy? http://www.ato.gov.au/individuals/content.asp?doc=/content/

17482.htm&pc=001/002/030/003/001&mnu=&mfp=&st=&cy=1,

viewed 27 February

2007.
[91] Medicare Levy Act 1986 (Cth), s

8.
[92] For taxpayers entitled to a senior Australians tax offset, this amount is $24

867. Medicare Levy Act 1986 (Cth), ss 7(1), 3(1). See also Australian

Taxation Office, Medicare levy reduction for people on low incomes,

http://www.ato.gov.au/print.asp?doc=/content/40500.htm, viewed 14 February

2007.
[93] Medicare Levy Act 1986 (Cth), s 8(1), (5). The family income threshold is

increased by $2523 for each dependent child. See also Australian Taxation

Office, Medicare levy reduction for people on low incomes, http://www.ato.gov.au/print.asp?doc=/content/40500.htm, viewed 14 February

2007.
[94] Income Tax Assessment Act 1936 (Cth), s

251T(a).
[95] Income Tax Assessment Act 1936 (Cth), s 251U(1), (2). A ‘prescribed

person’ includes a person who is:

  • a blind pensioner or a person who receives the sickness

    allowance from Centrelink

  • entitled to full free medical treatment under defence

    force arrangements or Veterans’ Affairs Repatriation health card or

    repatriation arrangements

  • not an Australian resident for tax purposes
  • a resident of Norfolk Island
  • a member of a diplomatic mission or consular post in

    Australia, or a member of such a person’s family and living with them (and

    who does not normally live in Australia)

  • in possession of a certificate Medicare Levy Exemption

    Certification Unit of Medicare Australia showing that he or she is not entitled

    to Medicare benefits.

See Australian

Taxation Office, Medicare levy exemption,

http://www.ato.gov.au/print.asp?doc=/content/40501.htm, viewed 27 February

2007.
[96] Income Tax Assessment Act 1936 (Cth), s 251R(3), which relies on

definitions of ‘spouse’ and ‘child’ in the Income Tax

Assessment Act 1997 (Cth), s 995-1(1) via the Income Tax Assessment Act

1936 (Cth), s

6(1).
[97] Income Tax Assessment Act 1936 (Cth), s

251R(6D).
[98] Medicare Levy Act 1986 (Cth), s 8(1). See also Australian Taxation

Office, Medicare levy reduction for people on low incomes,

http://www.ato.gov.au/print.asp?doc=/content/40500.htm, viewed 14 February

2007.
[99] Medicare Levy Act 1986 (Cth), ss 8B, 8C, 8D refer to the Income Tax

Assessment Act 1936 (Cth), s 251R. The Income Tax Assessment Act 1936 (Cth) refers to definitions contained in the Income Tax Assessment Act

1997 (Cth), s

995-1(1).
[100] See also Law Institute of Victoria, Submission 331; Young Lawyers Human Rights

Committee, Submission

311.
[101] Sarah and Suzey Whitby, Opening Statement, Townsville Forum, 12 October 2006.

See also Wollongong Forum, 12 October 2006; Name Withheld, Submission 268;

Action Reform Change Queensland and Queensland AIDS Council, Submission

270.
[102] Law Institute of Victoria, Submission

331.
[103] Medicare Levy Act 1986 (Cth), ss

8B-8D.
[104] Medicare Levy Act 1986 (Cth), ss 3A,

8B(2).
[105] Medicare Levy Act 1986 (Cth), s 3A. See also Australian Taxation Office, Medicare levy surcharge,

http://www.ato.gov.au/print.asp?doc=/content/7128.htm, viewed 14 February

2007.
[106] Medicare Levy Act 1986 (Cth), s

8D(3).
[107] J Millbank, 'Areas of Federal Law that Exclude Same-Sex Couples and their

Children', Inquiry Research Paper, September 2006, available

at http://www.humanrights.gov.au/samesex/index.html,

p43, footnote

219.
[108] Action Reform Change Queensland and Queensland AIDS Council, Submission 270. See

also Gay and Lesbian Rights Lobby (NSW), Submission

333.
[109] Trish Kernahan, Submission

217.
[110] Name Withheld, Submission

326.
[111] Miranda Stewart, Submission

266.
[112] Income Tax Assessment Act 1997 (Cth), ss 126-5(1), 126-15(1). For

example, a financial agreement made under Part VIIIA of the Family Law

Act 1975 (Cth) that is binding because of section 90G of that

Act (s 126-5(1)(d)); or a written agreement that is binding because of a state

law, territory law or foreign law relating to de facto marriage breakdowns

(s

126-5(1)(f)).
[113] The Roll-over Relief Claimant and Commissioner of Taxation [2006] AATA

728 (23 August 2006) paras 35-37. The term ‘spouse’ in s 995-1(1) of

the Income Tax Assessment Act 1997 (Cth), discussed in section 8.2.1

above, applies for the capital gains tax provisions, which are in that

Act.
[114] The Roll-over Relief Claimant and Commissioner of Taxation [2006] AATA

728 (23 August 2006) para

5.
[115] There is a 50% on capital gains tax payable by individuals. Income Tax

Assessment Act 1997 (Cth), div

115.
[116] Victorian Gay and Lesbian Rights Lobby, Submission

256.
[117] A New Tax System (Goods and Services Tax) Act 1999 (Cth).
[118] Commissioner of Taxation, Goods and Services Tax Ruling 2003/6,

‘Goods and services tax: transfers of enterprise assets as a result of

property distributions under the Family Law Act 1975 or in similar

circumstances’.
[119] Commissioner of Taxation, Goods and Services Tax Ruling 2003/6,

‘Goods and services tax: transfers of enterprise assets as a result of

property distributions under the Family Law Act 1975 or in similar

circumstances’, para 44.
[120] Income Tax Assessment Act 1936 (Cth), s

102AE(2)(b)(viii).
[121] Income Tax Assessment Act 1936 (Cth), s

102AGA(2).
[122] Income Tax Assessment Act 1936 (Cth), s 102AGA(2)(a).
[123] Income Tax Assessment Act 1997 (Cth), s

995-5(1).
[124] Income Tax Assessment Act 1936 (Cth), pt III, div 6AA. Commissioner of

Taxation, Taxation Ruling TR 98/4, 18 March 1998, para

6.
[125] Miranda Stewart, Submission

266.
[126] Income Tax Assessment Act 1997 (Cth), s

51-50.
[127] Miranda Stewart, Submission 266; Victorian Gay and Lesbian Rights Lobby,

Submission

256.
[128] Income Tax Assessment Act 1997 (Cth), s

118-205.
[129] Income Tax Assessment Act 1997 (Cth), s

118-110(1).
[130] Income Tax Assessment Act 1997 (Cth), s

118-170.
[131] Law Council of Australia, Submission 305.
[132] Fringe Benefits Tax Assessment Act 1986 (Cth), s 136(1).

‘Associate’ has the meaning given by s 318 of the Income Tax Assessment Act 1936 (Cth), where the category includes a

‘relative’ or ‘partner’, which in turn include a

‘spouse’ or

‘child’.
[133] Fringe Benefits Tax Assessment Act 1986 (Cth), s 136(1); Income Tax

Assessment Act 1997 (Cth), s 995-1(1).
[134] Australian Taxation Office, Interpretative Decision 2003/7. Same-sex

partners are deemed to be associates under s 148(2) of the Fringe Benefits

Tax Assessment Act 1986 (Cth).
[135] Fringe Benefits Tax Assessment Act 1986 (Cth), ss 58, 58T, 58U. These

benefits may be provided to the ‘spouse’ or ‘child’ of

the

employee.
[136] Fringe Benefits Tax Assessment Act 1986 (Cth), s 57. This benefit may be

provided to the ‘spouse’ or ‘child’ of the

employee.
[137] Fringe Benefits Tax Assessment Act 1986 (Cth), s 58LA. Section 136(1)

defines a ‘close relative’ as including ‘the spouse of the

person’, ‘a child or parent of the person’, or ‘a parent

of the person's

spouse’.
[138] Dr Jeremy Field, Submission 295. See also Gay and Lesbian Rights Lobby (NSW),

Submission

333.
[139] See for example, Income Tax Assessment Act 1936 (Cth), ss 26AAC,

78A.
[140]