Senate

Supplementary Explanatory Memorandum

Circulated by the authority of the Attorney-General, the Honourable Robert McClelland MP

GENERAL OUTLINE

1 The purpose of the Same-Sex Relationships (Equal Treatment in Commonwealth Laws - Superannuation) Bill 2008 (the Superannuation Bill) is to eliminate discrimination against same-sex couples and the children of same-sex relationships in Commonwealth Acts that provide for reversionary superannuation benefits upon the death of a scheme member, and in related taxation treatment of superannuation benefits.

2 The Government amendments proposed to the Superannuation Bill will:

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replace the concept of child as a 'product of a relationship' with 'child of a person within the meaning of the Family Law Act 1975' (see Subdivision D of Division 1 of Part VII of the Family Law Act, as proposed to be amended by Government Amendments tabled on 18 September 2008 for the Family Law Amendment (De Facto Financial Matters and Other Measures) Bill 2008 (Family Law Amendment Bill))

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use the phrase 'husband or wife or partner' instead of 'partner'

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use the phrase 'marital or couple relationship' instead of 'couple relationship' to ensure that the term 'marital relationship' is preserved in Acts where that term appears

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incorporate into the Superannuation Bill additional concepts and drafting included in the Same-Sex Relationships (Equal Treatment in Commonwealth Laws - General Law Reform) Bill 2008 (the General Law Reform Bill) in order to maintain consistency in Commonwealth laws

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move the definition of 'de facto partner' proposed to be inserted in the Acts Interpretation Act 1901 (currently in Item 1 of Schedule 2 to the General Law Reform Bill), into the Superannuation Bill.

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remove references to the regulations made to facilitate recognition of registered relationships under the Judges' Pensions Act 1968 and replace them with references to regulations made for this purpose under the Acts Interpretation Act.

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use the General Law Reform Bill's non-discriminatory definition of 'stepchild', definition of 'relative' and tracing rule to recognise family relationships, and

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introduce application provisions in the Superannuation Bill, which are required as a consequence of the delay in the passage of the Superannuation Bill.

3 Acts affected by the proposed amendments to the Superannuation Bill are:

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Acts Interpretation Act 1901

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Defence Force Retirement and Death Benefits Act 1973

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Federal Magistrates Act 1999

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Governor-General Act 1974

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Income Tax (Transitional Provisions) Act 1997

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Judges' Pensions Act 1968

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Law Officers Act 1964

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Parliamentary Contributory Superannuation Act 1948

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Retirement Savings Accounts Act 1997

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Small Superannuation Accounts Act 1995

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Superannuation (Government Co-contribution for Low Income Earners) Act 2003

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Superannuation Industry (Supervision) Act 1993

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Superannuation Act 1922

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Superannuation Act 1976

Financial Impact Statement

4 There is estimated to be an ongoing financial impact for these measures.

Regulation Impact Statement

5 A regulation impact statement is not required. The Office of Best Practice Regulation has advised that no further analysis was required as the Bill will have little to no regulatory impact.

Key concepts and definitions

Child

6 In order to recognise children of same-sex couples, the Superannuation Bill expands the classes of children that may be taken to be the child of a couple. The Superannuation Bill provides that for the purposes of the Acts or provision of Acts amended a child would be considered to be a person's child where that child was the 'product of the relationship' the person has or had as a couple with another person. This was intended to ensure that children of same-sex couples were recognised for the purposes of Commonwealth superannuation legislation. A number of submissions to the Senate Standing Committee on Legal and Constitutional Affairs' inquiry into the Superannuation Bill raised concerns about this definition.

7 Since the introduction of the Superannuation Bill the Government has circulated proposed amendments to the Family Law Amendment Bill, which amends the Family Law Act. The proposed amendments to the Family Law Amendment Bill are intended to implement the bipartisan recommendation made by the Senate Standing Committee on Legal and Constitutional Affairs that the definition of 'child of the de facto relationship' and the parenting presumptions in section 60H of the Family Law Act be amended to allow children of same-sex relationships to be recognised as a child of the relationship for the purposes of the entire Family Law Act. The classes of children falling within the amended provisions of the Family Law Act are substantially equivalent to the classes of children that the Government intended to cover with the 'product of a relationship' definition in the Superannuation Bill.

8 The definition of child in these amendments to the Superannuation Bill therefore relies on the expanded meaning of child in the Family Law Act which will result from the amendments made by the Family Law Amendment Bill to Part VII of that Act. The meaning of 'child' in the Family Law Act will include children:

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born to a woman as the result of an artificial conception procedure while that woman was married to, or was a de facto partner of another person (whether of the same or opposite sex), and

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who are children of a person because of an order of a State or Territory court made under a State or Territory law prescribed for the purposes of section 60HB of the Family Law Act, giving effect to a surrogacy agreement.

9 This will ensure that the children of same-sex couples are recognised consistently across Commonwealth laws and responds to concerns raised in relation to the 'product of the relationship' definition of child contained in the Superannuation Bill.

10 In order to incorporate the Family Law Act concept of 'child', these amendments replace the 'product of the relationship' definition wherever it occurs with a reference to a child 'within the meaning of the Family Law Act 1975'. The Government intends that this phrase should be interpreted to refer to all children who come within the meaning of 'child' in the Family Law Act, notwithstanding the fact that certain provisions of the Family Law Act do not apply in all States. In particular these definitions will extend to children in Western Australia despite the fact that subsection 69ZE(2) of the Family Law Act provides that Part VII of that Act does not apply in that State.

Marital and couple relationship

11 The Superannuation Bill intends to ensure that for the purposes of the payment of death benefits the definition of a relationship includes a same-sex relationship as well as an opposite-sex relationship. In order to achieve this, the Superannuation Bill replaces the term 'marital relationship' with the term 'couple relationship' and the phrase 'husband or wife' with the term 'partner' in a number of Commonwealth superannuation laws.

12 While the inclusion of same-sex relationships within this definition was not intended to change the treatment of married or opposite-sex couples, this approach has been criticised in evidence given to the Senate Legal and Constitutional Affairs Committee's inquiry into the Superannuation Bill. These amendments address this issue by replacing the term 'couple relationship' with the phrase 'marital or couple relationship'. Using the phrase 'marital or couple relationship' gives effect to the underlying intention of removing same-sex discrimination while clarifying that it does not change or re-define any other indicia of a relationship. These amendments reinstate the term 'marital' in the relevant Acts, while ensuring that married and de facto couples will receive equal treatment.

13 Amendments to the term 'husband or wife' were necessary because the ordinary meaning of 'husband or wife' may not extend to a person's same-sex partner. The Superannuation Bill therefore amends this term to 'partner'. In order to preserve references to married relationships, amendments will modify the approach taken in the Superannuation Bill by retaining the words 'husband or wife', and inserting the words 'or partner' after 'husband or wife'. 'Partner' is defined as a person with whom a person had a relationship as a couple, whether of the same or opposite sex. This will ensure that the term 'husband or wife' is retained while making it clear that same-sex couples can be recognised under these provisions.

De facto partner

14 The Superannuation Bill enables a relationship registered under prescribed State laws to be evidence of the existence of a same-sex relationship when considering who may be entitled to a death or pension benefit. The Superannuation Bill inserts a regulation-making provision in the Judges' Pensions Act 1968 to facilitate recognition of State and Territory schemes. It was intended that regulations made under this provision would prescribe which State and Territory relationship registers and types of relationships would be recognised for the purposes of Commonwealth laws.

15 This approach has been overtaken by the approach in the General Law Reform Bill which includes a definition of 'de facto partner' in the Acts Interpretation Act. This definition of 'de facto partner' encompasses members of both same-sex and opposite-sex de facto relationships.

16 In order to avoid making two sets of regulations when the same relationships in the same States and Territories are intended to be prescribed, the amendments to the Superannuation Bill will bring the insertion of the Acts Interpretation Act definition of 'de facto partner' into the Superannuation Bill and will omit the insertion of the definition in the Judges Pensions Act. This will ensure that the Acts Interpretation Act definition is in place for this purpose when the Superannuation Bill commences.

De facto partners

17 Section 22A of the Acts Interpretation Act will require that an Act or a provision of an Act may specify that the definition in the Acts Interpretation Act applies to that Act or that provision. This approach is a departure from the usual approach in the Acts Interpretation Act which is for words to be defined to have a meaning 'unless the contrary intention appears'. This means that the application of the definition of 'de facto partner' in the Acts Interpretation Act will have no effect unless it is 'triggered' by express provisions in the substantive Act. This approach avoids any possibility of unintended consequences in other legislation.

18 Section 22A will prescribe two different circumstances in which a person will be considered to be the de facto partner of another person. Paragraph 22A(a) of the Acts Interpretation Act will provide that a person is a de facto partner of another person if the person is in a 'registered relationship' with another person under section 22B of the Acts Interpretation Act. Paragraph 22A(b) of the Acts Interpretation Act will provide that a person is a de facto partner of another person if the person is in a 'de facto relationship' with that person under section 22C of the Acts Interpretation Act. The definition of 'de facto partner' is gender neutral and applies to both same-sex and opposite-sex couples.

Registered relationships

19 Under section 22B of the Acts Interpretation Act, a person will be considered to be in a registered relationship with another person for the purposes of paragraph 22A(a) of the Acts Interpretation Act if the relationship is registered under a prescribed law of a State or Territory as a prescribed kind of relationship. This will only apply to relationships that are registered under State or Territory laws that are prescribed for the purposes of the Acts Interpretation Act and are of a kind that has been prescribed. For example, provisions of State and Territory laws that provide for registration of 'caring' or 'interdependent' relationships will not be prescribed as kinds of relationships that will be taken to be a registered relationship for the purposes of the Acts Interpretation Act.

20 The types of relationships that will be prescribed under section 22B of the Acts Interpretation Act are relationships that can be registered under some State and Territory laws that provide for registration of certain relationships. Only State and Territory laws or provisions of laws that provide for registration of relationships-same-sex or opposite-sex-will be prescribed.

De facto relationships

21 Section 22C of the Acts Interpretation Act will provide that, for the purposes of paragraph 22A(b) of the Acts Interpretation Act, a person is in a de facto relationship with another person if the members of the couple are not legally married, are not related by family and have a relationship as a couple living together on a genuine domestic basis.

22 Subsection 22C(2) of the Acts Interpretation Act will provide that all the circumstances of the relationship between the persons are to be taken into account when determining whether two persons have a relationship as a couple for the purposes of paragraph 22C(1)(c) of the Acts Interpretation Act, including any or all of the following relevant factors:

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the duration of the relationship

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the nature and extent of their common residence

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whether a sexual relationship exists

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the degree of financial dependence or interdependence, and any arrangements for financial support, between them

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the ownership, use and acquisition of their property

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the degree of mutual commitment to a shared life

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the care and support of children, and

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the reputation and public aspects of the relationship.

23 Subsection 22C(3) of the Acts Interpretation Act will clarify that no particular finding in relation to any circumstance used in subsection 22C(2) of the Acts Interpretation Act is to be regarded as necessary in deciding whether the persons have a de facto relationship. For example, the fact that a couple do not have children is not a determinative factor when determining whether they are in a de facto relationship. In the same way a lack of a sexual relationship will not exclude the couple from being in a de facto relationship.

24 Subsection 22C(4) of the Acts Interpretation Act will provide that persons are to be taken to be living together on a genuine domestic basis if they are not in fact living together on a genuine domestic basis only because of:

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a temporary absence from each other (eg due to work commitments), or

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illness or infirmity of either or both of them (eg one partner living in a nursing home).

25 Subsection 22C(5) of the Acts Interpretation Act will clarify that a de facto relationship can exist even if one person in the relationship is legally married to another person, in a registered relationship with another person, or in another de facto relationship. This reflects current laws which allow a person to be in a de facto relationship with a person even if they are married to another person.

26 Subsection 22C(6) of the Acts Interpretation Act will provide that for the purposes of paragraph 22C(1)(b), two persons are to be considered to be related by family if:

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one is the child (including an adopted child) of the other

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one is another descendant of the other (even if the relationship between them is traced through an adoptive parent), or

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they have a parent in common (who may be an adoptive parent of either or both of them).

27 For the purposes of determining if two persons are related by family, the fact that adoption has been declared void or has ceased to have effect is to be disregarded. This means that if a person has previously been adopted and that adoption has been declared void or has ceased to take effect, the fact of adoption is still to be taken into account when determining whether that person and another person are related by family

Stepchild

28 The ordinary meaning of 'stepchild' is a 'child of a husband or wife by a former union'. As same-sex couples cannot marry, the child of one member of the couple by a former relationship cannot be considered to be the other member of the couple's stepchild. This is also the case for children of opposite-sex de facto partners by a former relationship.

29 Amendments to recognise children of an opposite-sex or same-sex de facto partner by a former relationship are included in the General Law Reform Bill wherever recognition was already given to stepchildren. The amendments to the Superannuation Bill will use this approach from the General Law Reform Bill to recognise the children of a de facto partner by a former relationship in the following Acts:

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Superannuation Act 1976

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Defence Force Retirement and Death Benefits Act

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Retirement Savings Accounts Act, and

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Superannuation Industry (Supervision) Act.

30 In the Defence Force Retirement and Death Benefits Act and Superannuation Act 1976, recognition of children of a person's de facto partner will be achieved by definitions of 'stepchild' and 'child' respectively which include a child who would be the stepchild of a person who is the de facto partner of a parent of the child, except that the person and the parent are not legally married. It is not necessary to establish that the person and the parent are capable of being legally married for this purpose.

31 In the Retirement Savings Accounts Act and the Superannuation Industry (Supervision) Act, children of a person's spouse are covered by the insertion of a new paragraph into these Acts' definition of 'child' to provide that 'child' includes 'a child of the person's spouse'. The amendments to the Superannuation Bill will define 'spouse' to include a person with whom another person is in a de facto relationship or a registered relationship. These amendments are consistent with the approach to the recognition of children in these circumstances in the amendments to the definition of 'child' in subsection 995-1(1) of the Income Tax Assessment Act which will be made by the General Law Reform Bill.

32 These definitions are inclusive and do not limit who is a stepchild for the purposes of the relevant Act.

Recognition of family relationships

33 Where terms such as 'relative' or other family relationships such as 'brother', 'aunt', and 'grandparents' are provided for in an Act, a tracing rule has been developed that will allow relationships referred to in the Acts to include relationships that are traced through the child-parent relationship. Examples 1 and 2 below outline circumstances where the tracing rule can be used to determine a relationship.

Example 1

J is in a de facto relationship with S. During the relationship J and S decide that S will undergo an artificial conception procedure using donated gametes. The procedure takes place and S gives birth to H. Later, J and S decide to have another child - S will again undergo an artificial conception procedure using donated gametes, but from a different source. The procedure takes place and S gives birth to T. Both procedures comply with the requirements of section 60H of the Family Law Act, and J and S are therefore both the parents of each of the children. Whilst T is the child of J and S, he is not the biological sibling of H.

34 The use of the tracing rule in this instance will allow T to be considered to be H's brother because the relationship is traced through the child-parent relationship that each child has with J and S. This will continue to be the case even if the relationship between J and S were to break down at a later time. Without the tracing rule, T will only be considered to be H's half brother.

Example 2

J is in a de facto relationship with S. S has a brother T. During the relationship, J and S decide that J will undergo an artificial conception procedure using donated gametes. The procedure, which complies with the requirements of section 60H of the Family Law Act, takes place and J gives birth to H.

35 T will be considered to be H's uncle in this instance because the relationship is traced through the child-parent relationship which arises because of section 60H of the Family Law Act. This will continue to be the case even if the relationship between J and S were to break down at a later time. Without the tracing rule, T will have no familial link to H and would not be considered to be T's uncle.