Same-sex partners can have their relationship recognised by their superannuation fund. From 1 July 2008 changes applied to tax and super laws affecting super death benefits, death benefit termination payments, spouse contributions and other aspects of the super system.
As a result:
- the definitions of 'spouse', 'child' and 'relative' in the super laws include same-sex partners and their children
- the definitions of 'dependant' and 'spouse' in the income tax laws include same-sex partners and their children
- same-sex partners and their children under 18 years old are treated as dependants for the purposes of taxing super death benefits and death benefit termination payments.
Death benefit payments to dependants
The dependant of a member in a same-sex relationship can receive a super lump sum death benefit tax free if they are eligible. The final decision on whether to pay super death benefits to a dependant:
- rests with the fund's trustee
- is subject to the fund's governing rules and legal provisions.
The dependant of a member in a same-sex relationship may qualify to receive a death benefit as an income stream. The tax treatment depends on:
- the deceased member's age at death
- the dependant's age when the member died
- whether the benefit has a taxed or untaxed element.
The meaning of 'spouse' has been redefined. For super laws your 'spouse' includes:
- someone you are married to
- a person you are in a relationship with and that relationship is registered under certain state or territory laws (including registered same-sex relationships)
- a person of either sex living with you in a relationship as a couple (generally known as a 'de facto' spouse).
Super contributions caps
If you are in a same-sex relationship, contributions you make to your spouse's super will count towards your spouse's non-concessional contributions cap.
If your spouse's total non-concessional contributions exceed their non-concessional cap, your spouse may have to pay excess contributions tax at the rate of 46.5% on the excess non-concessional contributions.
Contributions splitting
People in a same-sex relationship can apply for contributions splitting. 'Contributions splitting' allows a super fund member to apply to their fund to transfer certain concessional contributions made for the member's benefit (commonly employer contributions) to their partner's super account. This allows the member to boost their same-sex partner's retirement savings.
Despite being transferred to the spouse, these split contributions will count towards the member's own concessional contributions cap, rather than that of their spouse.
SMSFs lending money or providing direct financial assistance
Self-managed super funds (SMSFs) must not lend money or provide direct or indirect financial help (including providing credit) to a member or a member's relative. A member's relative includes a member's spouse or a member's (or their spouse's) child.
For more information, refer to:
- Self Managed Superannuation Ruling SMSFR 2008/1 Self Managed Superannuation Funds: giving financial assistance using the resources of a self managed superannuation fund to a member or relative of a member that is prohibited for the purposes of paragraph 65(1)(b) of the Superannuation Industry (Supervision) Act 1993
- Same-sex reforms on the Attorney-General's website.
Last Modified: Wednesday, 2 January 2013