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Super Law Amendments Dealt Effectively With Same-sex Issues


While the protracted debate over same sex marriage goes to a postal vote the superannuation system sorted all this out — financially — almost a decade ago.

Whether you are married, in a de facto relationship or in a same-sex relationship, the superannuation law does not discriminate: Same-sex couples receive equal treatment.

In 2008 the super law was amended to treat everyone as equal regardless of whether they are married, de facto heterosexual couples or same sex. The law extended the definition of “spouse” — which up to that point only included opposite sex partners.

The expanded definition includes another person (whether of the same sex or opposite sex) with whom the person is in a relationship that is registered under a certain state or territory law. It also includes another person who, although not legally married to the person, lives with the person on a genuine domestic basis in a relationship as a couple.

A same-sex couple is treated in the same way to a married or de facto heterosexual with regards to their super entitlements.

Separately, in 2008, the family law was also amended to broaden the definition of “de facto” to include same-sex relationships. The inclusive nature of the legislation has implications across a range of aspects in super.

Contribution splitting

Same-sex couples are eligible for super splitting which allows a same-sex partner to transfer 85 per cent of their concessional (before tax) contributions into their spouse’s super account. This has become more popular since July when the $1.6 million limit was placed on retirement pension accounts. Splitting super between couples allows couples to “even out” their retirement pension accounts and super balances, which may enable them to make further contributions. A member (of any age) can split their contributions with their spouse, as long as the spouse is under the age of 65 and not retired from the workforce.

Contribution tax offset

Same-sex partners can make non-concessional (after-tax) contributions of up to $3000 on behalf of their spouse and be entitled to a maximum tax offset of up to $540 if their spouse’s assessable income (including total fringe benefits amounts and reportable employer super contributions) for the financial year is less than $40,000. To be eligible for the full tax offset, the spouse’s annual income must not exceed $37,000. The tax offset gradually reduces once the spouse’s income exceeds $37,000 and cuts out altogether once the income reaches $40,000.

Running a SMSF

Generally, a person cannot be in a self-managed super fund with another person that they work for, unless the person is a relative of the other person. A curiosity of the current arrangement is that as same-sex couples are considered related, they can be in an SMSF together if one works for the other. Because a same-sex partner is considered a “relative”, their SMSF cannot lend money to a member or a relative of a member.

Death benefits

Same-sex couples are eligible for death benefits from their deceased partner’s super fund. They do not need to pass special tests confirming that they had an “interdependent” relationship or a financial dependent relationship. This includes the former spouses of same-sex couples.

Breaking up

Same-sex de facto couples in most States and Territories are covered by the Family Law Act 1975 and have the same rights as heterosexual de facto couples in the event of a relationship breakdown for the division of assets and super.


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