ATO Interpretative Decision
ATO ID 2011/83
Income TaxSuperannuation: death benefits dependant - former spouse - same sex relationship
FOI status: may be released
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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is the taxpayer who, prior to the 2008-2009 income year, lived with a now deceased superannuation fund member on a genuine domestic basis in a relationship as a same sex couple, a 'former spouse' of the deceased in terms of paragraph 302-195(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) for the purposes of determining the taxation treatment of a superannuation death benefit received by the taxpayer because of the death of the member during the 2010-2011 income year?
Yes. Although the definition of 'spouse' was only amended to include same sex couples subsequent to the relationship ceasing, the taxpayer is a 'former spouse' of the deceased superannuation fund member in terms of paragraph 302-195(1)(a) of the ITAA 1997.
A superannuation fund member died in the 2010-2011 income year.
The taxpayer received a superannuation death benefit from the deceased's superannuation fund during the 2010-2011 income year.
The taxpayer and the deceased, although not legally married, lived together on a genuine domestic basis in a relationship as a same sex couple for a number of years prior to their relationship ceasing in the 2003 year.
Reasons for Decision
Concessional taxation arrangements apply to the payment of a superannuation death benefit to a person who is a 'death benefits dependant' of the person who has died.
The meaning of 'death benefits dependant' is set out in section 302-195 of the ITAA 1997. Paragraph 302-195(1)(a) of the ITAA 1997 provides that a death benefits dependant, of a person who has died, includes the deceased person's 'former spouse'.
Prior to the 2008-2009 income year same sex relationships were not recognised in the definition of 'spouse' when determining if a person was a death benefits dependant. Specifically for the 2008-2009 income year, the definition of 'death benefits dependant' in paragraphs 302-195 (1)(a) and 302-195(1)(b) of the ITAA 1997 were replaced with paragraphs 302-195A(2)(a) and 302-195A(2)(b) of the Income Tax (Transitional Provisions) Act 1997 respectively. Relevantly, paragraph 302-195A(2)(a) of the Income Tax (Transitional Provisions Act) 1997 provided that persons in same sex relationships could be a spouse or former spouse for the death benefits dependant definition. In the following year the definition of spouse in section 995-1 of the ITAA 1997 was amended to recognise same sex relationships.
Whether an individual is the 'former spouse' of a superannuation fund member for the purposes of paragraph 302-195(1)(a) of the ITAA 1997 is determined by reference to the definition of 'spouse' applying at the time the death benefit was received.
In this regard, the definition of spouse in section 995-1 of the ITAA relevantly states:
spouse of an individual includes:
As the taxpayer had lived with the now deceased superannuation fund member on a genuine domestic basis in a relationship as a couple for a period up until 2003 the taxpayer was, under the definition above, the 'spouse' of the deceased during that period.
Consequently, in determining whether an individual is a 'former spouse' within the meaning of paragraph 302-195(1)(a) of the ITAA 1997 the meaning of the term 'former' needs to be considered.
As the word 'former' is not a defined term it takes its ordinary meaning in the context of the legislative provision. The Macquarie Dictionary, 2013, 6th edn, The Macquarie Library Pty Ltd, NSW relevantly, defines former as 'preceding in time; prior or earlier' and 'having held a particular office in the past: a former president'. With this in mind, and in the context of paragraph 302-195(1)(a) of the ITAA 1997, an individual is a deceased person's 'former spouse' if that individual was the spouse of the deceased sometime in the past.
In the present case, the events that would, in the 2010-2011 income year, include the individual within the term 'former spouse' occurred prior to the enactment of amendments which included same sex relationships within the definition of 'spouse'.
As the amended definition of spouse had not been enacted at the time of the relationship, the question arises as to whether the fact that the relationship occurred can be taken into account when determining whether the taxpayer falls within the meaning of 'former spouse'.
In this regard, it is a common law principle that, unless otherwise indicated by the legislature, amending legislation will have prospective effect only and not apply to facts or events that have already occurred to create new rights or obligations in relation to those facts or events (Maxwell v. Murphy (1957) 96 CLR 261; Fisher v. Hebburn Ltd (1960) 105 CLR 188).
In drafting the changes to the definition of 'spouse' as it applies to paragraph 302-195(1)(a) of the ITAA 1997, the legislature has not put any constraints on the period to which the new definition operates.
Consequently, in determining whether an individual is a 'former spouse', the legislature permits that a conclusion be formed based upon the facts relating to events that occurred prior to the operation of the amended definition of 'spouse'.
In regard to the application of legislation to past events, Pearce, DC and Geddes, RS, 2014, Statutory Interpretation in Australia, 8th Edn, Butterworths, Chatswood NSW at page 399 states:
It is important when considering the question of retrospectivity to draw a distinction between legislation having a prior effect on past events and legislation basing future action on past events. Jordan CJ contrasted these circumstances in Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27 at 31:
... as regards any matter or transaction, if events have occurred prior to the passing of the Act which have brought into existence particular rights or liabilities in respect of that matter or transaction, it would be giving a retrospective operation to the Act to treat it as intended to alter those rights or liabilities, but it would not be giving it a retrospective operation to treat it as governing the future operation of the matter or transaction as regards the creation of further particular rights or liabilities.
In the case of Re a Solicitor's Clerk  1 WLR 1219 a solicitor's clerk was convicted on charges of larceny but, pursuant to the law applied at that time, no order could be made to prevent the clerk from being employed as a solicitor's clerk. Subsequent to the clerk's conviction, legislation was passed to allow such an order to be made. The court held that although this was legislation that had future application only, the clerk's disqualification from employment was permissible because the disqualification applied in the future. This was so even though the events which led to the disqualification occurred prior to the enabling legislation's operation.
Likewise in this case, applying the amended legislation to facts that occurred prior to the introduction of the amended definition of 'spouse' does not involve a retrospective operation of the law but rather the future operation of the law with a reference to facts relating to past events.
Accordingly, the taxpayer is a 'former spouse' for the purposes of paragraph 302-195(1)(a) of the ITAA 1997 and consequently a 'death benefits dependant' pursuant to section 302-195 of the ITAA 1997.
|Date of Amendment||Part||Comment|
|20 February 2015||Reasons for Decision||Updated|
Year of income: Year ended 30 June 2012Income Tax (Transitional Provisions) Act 1997
Fisher v. Hebburn Ltd
(1960) 105 CLR 188
(1957) 96 CLR 261 Re Solicitor's Clerk
 1 WLR 1219
 3 All ER 617
Pearce, DC and Geddes, RS, 2014, Statutory Interpretation in Australia, 8th Edn, Butterworths, Chatswood NSW. P. 399.
The Macquarie Dictionary, 2013, 6th edn, The Macquarie Library Pty Ltd, NSW.
Death benefits dependent
Same sex relationship
Date reviewed: 7 August 2018