Superannuation rights of same-sex couples
When Robbie and Chris adopted Holly, they agreed that Chris would give up work until she was old enough to go to school, as between the two of them Robbie had the greater earning capacity.
They also decided that it was time to seek financial advice – particularly as they wanted to make sure that Holly would be taken care of if something happened to either of them.
When consulting their financial adviser about insurance in super, their first priority was to find out what they could do to ensure Holly’s welfare.
Holly, being a legal dependent, could be nominated as a beneficiary of both Robbie and Chris’s superannuation. Through their financial adviser, they were able to set up a binding nomination, renewable every three years, to ensure that their superannuation and insurance benefits would support their daughter.
Given that Holly was quite young, their adviser suggested they update their wills and consider:
- appointing a guardian,
- setting up a testamentary trust.
Their adviser went on to explain the couple’s rights under legislation.
Changes made to Family Law in 2008 extended the definition of ‘spouse’ to include same-sex couples. This resulted in same-sex couples being treated the same as heterosexual couples in areas such as superannuation, tax, insurance, and social security.
When it came to their superannuation savings, Chris was concerned that as he was not currently working, he wasn’t contributing to his super. Two options available to them are:
- Spouse contributions. If Chris’s income is below $13,800, Robbie is entitled to contribute to his partner’s super on Chris’s behalf, and claim a tax offset up to $540.
- Contribution splitting. Robbie is entitled to split his (pre-tax) super contributions with Chris by boosting Chris’s super. This amount will still count towards Robbie’s contribution cap.
In the event that the relationship broke down, a same-sex couple’s superannuation assets can be taken into account and asset splitting is treated exactly the same as it is for heterosexual de-facto couples.
Australia may not have taken the step of legalising marriage between same-sex couples, but progress towards equality has been made. Meanwhile, families like Robbie and Chris are able to plan their future financial security.
Sources:
www.lewistaxation.com.au Same-sex couples’ superannuation rights explained (Feb 10 2013)
www.superguide.com.au Same-sex couples: your super rights explained (Trish Power September 11 2013)