Same-sex Marriage and Superannuation

Same-sex marriage and Superannuation

Superannuation fund trustees need to be alert to the impact the same-sex marriage laws have in superannuation.  The new law changed the definition of “spouse”, which has a flow-on effect to definitions in the SIS Act of “spouse”, “dependant” and “relative”.

Death benefits

Some think the new laws aren’t relevant for super, as death benefits could already be paid to a same-sex partner of a deceased member.  However, from 8 December 2017 (when the new law was passed), super death benefits can be paid to:

  • a married same-sex partner of a member; and
  • a child of a member’s married same-sex partner

regardless of whether they had separated at the time of death (provided they were not divorced).

That is because a married same-sex spouse and their children are ‘dependants’, even if the couple were separated at the time of death.

Other impacts of the new law

In superannuation, the new law also impacts on other areas, including:

  • family law splits and flags
  • spouse contributions (tax offset and contribution splitting)
  • the recent downsizing housing measures

What do Super Funds need to do?

  1. Review the trust deed – If the trust deed includes a definition of “Spouse”, “Dependant” or “Relative” that refers to the SIS Act, no amendment is required. However, if those terms are defined in detail or if any other provision in the trust deed describes who a spouse or child is, it may be necessary to amend the deed.
  2. Check the PDS – Provisions in a PDS that should be reviewed include those relating to death benefits, family law matters and others that relate to a spouse (such as contribution splitting).
  3. Review Fund forms – Forms that are impacted by the changes include death benefit nomination forms (binding and non-binding) and contribution splitting forms. References to ‘husband’ and ‘wife’ should be replaced.
  4. Check the Fund’s processes – A review should be conducted of the Fund’s policies and processes to ensure any determination of a spouse or child is updated to reflect the recent changes.

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