Senate

Explanatory Memorandum

Circulated By the Authority of the Attorney-General, the Hon Robert Mcclelland Mp

Schedule 1 - Finance and Deregulation amendments

21 This Schedule contains amendments to the Parliamentary Contributory Superannuation Act 1948 (PCSS Act), the Superannuation Act 1922 (1922 Act) and the Superannuation Act 1976 (1976 Act), which establish superannuation schemes for certain former Members of Parliament and Australian Government employees.

22 Currently, death benefits can be paid from the schemes only to a legally married spouse or an opposite-sex de facto spouse of a deceased scheme member. Where there is no spouse who is eligible to receive the benefit, benefits can be paid to eligible children of the member or their spouse and, in the case of the Commonwealth Superannuation Scheme (CSS), to partially dependent children. Eligibility as a spouse depends in part on whether the person is in a marital relationship with a scheme member or former member at the time of their death.

23 These amendments will make scheme benefits arising from the death of a scheme member available to an eligible same-sex partner of the member or former member and certain additional classes of children associated with such relationships.

24 From the commencement of these amendments, eligibility to receive a spouse benefit will be linked to whether a person was in a couple relationship with a scheme member or former member at the time of the member's death. The term couple relationship will incorporate relationships between persons of the same sex in specified circumstances as well as those relationships previously referred to as marital relationships.

25 In the case of other civilian and parliamentary superannuation arrangements, either no legislative changes are required (for example, the Public Sector Superannuation Accumulation Plan) or legislative changes need to be made to delegated legislation, which is the case for the Public Sector Superannuation Scheme.

Parliamentary Contributory Superannuation Act 1948

26 The scheme established under the PCSS Act has been closed to new members since 9 October 2004. The scheme provides a contributory superannuation scheme under which benefits are paid to former members of Parliament. The PCSS Act provides for reversionary death benefits to be paid to the spouse or orphan children of a deceased contributor or pensioner.

Item 1

27 This item inserts into subsection 4(1) of the PCSS Act a signpost to the definition of the term ' couple relationship' in section 4B of the PCSS Act.

Item 2

28 This item amends the definition of ' former spouse' as a consequence of amendments made by item 6, which introduces the new concept of ' couple relationship' .

Item 3

29 This item inserts a definition of ' partner' into subsection 4(1) of the PCSS Act. This amendment is related to the amendment being made to section 4B of the PCSS Act by item 7 to replace the phrase ' husband or wife' with the term ' partner . This will extend the range of persons who can be considered to be eligible for death benefits to include a person in a same-sex relationship with a scheme member.

Item 4

30 This item inserts a signpost into subsection 4(1) of the PCSS Act to indicate that the term ' spouse' has a meaning as affected by section 4C of the PCSS Act, which replaces the term ' marital relationship' with ' couple relationship' .

Item 5

31 This item inserts subsection 4(7) into the PCSS Act. Subsection 4(7) provides that for the purposes of the PCSS Act a child cannot be considered to be the product of a relationship, whether between same or opposite-sex partners, unless the child is the biological child of at least one person in the relationship or is born to a woman in the relationship. This is relevant to new provisions, such as the new paragraph (b) of the definition of ' child' being inserted by item 17 into the PCSS Act.

Items 6 and 7

32 Existing sections 4B and 4C of the PCSS Act set out the requirements for a person to be considered to be a spouse for the payment of death benefits. Under these provisions, a person can be considered to be a spouse if the person had a ' marital relationship' with another person at a particular time, as defined in section 4B of the PCSS Act. One requirement of having a marital relationship is that the person ordinarily lived with another person as that other person's husband or wife. This means that currently only an opposite-sex de facto or married spouse of a deceased scheme member can be considered to have had a marital relationship with the member and therefore be eligible for death benefits as a spouse.

33 The amendments made by these items replace the term ' marital relationship' with the term ' couple relationship' and replace the phrase ' husband or wife' with the term ' partner' . The effect of this amendment is to ensure that the definition of a relationship, for the purpose of the payment of death benefits, includes a same-sex relationship as well as an opposite-sex relationship. The inclusion of same-sex relationships within this definition is not intended to change the treatment of married or opposite-sex de facto couples. It removes same-sex discrimination but does not change or re-define any other indicia of a relationship.

34 Item 6 replaces the term ' marital relationship' with the term ' couple relationship' in subsection 4B(1) of the PCSS Act. The heading to section 4B is also replaced with a new heading that refers to a ' couple relationship' .

35 Item 7 replaces the phrase ' husband or wife' with the term ' partner' in subsection 4B(1). The term ' partner' is defined in subsection 4(1) of the PCSS Act (see item 3).

Item 8

36 This item amends subsection 4B(2) of the PCSS Act as a consequence of the amendment made by item 7.

Item 9

37 This item amends subsection 4B(3) of the PCSS Act as a consequence of the amendment made by item 6.

Items 10 and 11

38 Subsection 4B(4) of the PCSS Act outlines circumstances which may be relevant for determining whether a person in a relationship of less than 3 years duration ordinarily lived with the other person as their ' partner' on a permanent and bona fide domestic basis. The circumstances listed are not intended as an exhaustive list but cover some of the more common circumstances, such as where the couple are married, have a child or jointly own their home.

39 Items 10 and 11 insert paragraph 4B(4)(ba) and subparagraph 4B(4)(c)(iii) into the PCSS Act to reflect that the concepts of ' spouse' and ' child' used within the Act, for the purpose of the payment of death benefits, have been extended to cover persons in same-sex relationships. Item 11 also includes a note that clarifies that new subsection 4(7) is relevant to working out when a child is a product of a relationship for the purposes of the new subparagraph 4B(4)(c)(iii).

40 Relevant evidence will now include whether:

-

the persons' relationship is registered under a State or Territory law prescribed for the purposes of paragraph 4AB(4)(ba) of the Judges' Pensions Act 1968 as a kind of relationship prescribed for the purposes of that paragraph; and

-

whether there is a child who is the product of the relationship between the persons.

41 This will assist the Parliamentary Retiring Allowances Trust (the Trust) in determining whether two persons, particularly where they are of the same sex, had a ' couple relationship' where the persons were in a relationship for a period of less than 3 years.

42 As it is intended that the prescribed relationships and prescribed State and Territory legislation should be the same for the Commonwealth civilian and military (defined benefit) superannuation schemes, for administrative convenience they will be specified in the Judges' Pensions Act.

Item 12

43 This item amends subsections 4C(2) and (3) of the PCSS Act as a consequence of amendments made by item 6.

Items 13 and 15

44 Section 19AA of the PCSS Act provides for benefits to be paid to eligible children upon the death of a member or former member in certain circumstances. Item 13 repeals paragraph 19AA(2)(d) and substitutes a new paragraph 19AA(2)(d). Item 15 repeals paragraph 19AA(2B)(a) and substitutes a new paragraph.

45 These amendments expand the current meaning of paragraphs 19AA(2)(d) and 19AA(2B)(a) to ensure that a child born or adopted into a same-sex relationship is treated in the same way as a child born or adopted into an opposite-sex relationship in relation to the payment of orphaned children benefits.

Items 14 and 16

46 These items insert notes after new subparagraphs 19AA(2)(d)(ii) and 19AA(2B)(a)(iii) that provide that new subsection 4(7) of the PCSS Act is relevant to working out when a child is a product of a relationship for the purposes of those subparagraphs.

Item 17

47 This item repeals the definition of ' child' in subsection 19AA(5) of the PCSS Act and inserts a new definition. The new definition expands the classes of children that may be taken to be a child of the member for the purposes of determining eligibility for orphaned children benefits. It adds a new criteria that, if at any time the person had a partner, a child who is the product of the person's relationship with that partner may be taken to be the member's child.

48 Item 17 also inserts a note at the end of the new definition of ' child' that provides that new subsection 4(7) of the PCSS Act is relevant to working out when a child is a product of a relationship for the purposes of the paragraph (b) of the definition of ' child' .

49 Paragraph (b) of the definition of ' child' provides that a child can be considered to be a member's child where the child is the product of the person's relationship with their partner.

50 Subsection 4(7) requires that the child is:

-

the biological child of at least one person in the relationship, i.e. is conceived utilising the gametes of one party to the relationship; or

-

the birth child of a woman in the relationship.

51 Examples 1 and 2 below outline circumstances where a child would meet the requirements of paragraph (b) of subsection 19AA(5) and subsection 4(7). The circumstances indicated in example 3 would not meet these requirements.

Example 1

J is a scheme member and forms a relationship as a couple with S. During the relationship J and S decide that S will undergo an artificial conception procedure using gametes from S and a donor. The procedure takes place and S gives birth to H. Whilst H is the biological child of S, he is not the biological child of J.

52 H will be considered J's child for the purposes of the definition of ' child' in the PCSS Act. That is, H is the product of the relationship between J and S and is S's biological child. This would continue to be the case even if the relationship between J and S were to break down at a later time.

Example 2

J is a scheme member and forms a relationship as a couple 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. Whilst H is the birth child of S, he is not the biological child of either J or S.

53 H will be considered J's child for the purposes of the definition of ' child' in the PCSS Act. That is, H is the product of the relationship between J and S and S is H's birth mother. This would continue to be the case even if the relationship between J and S were to break down at a later time.

Example 3

J is a scheme member and forms a relationship as a couple with S. S has a child H from a previous relationship.

54 H cannot be considered J's child for the purposes of the definition of ' child' in the PCSS Act. Whilst H is S's biological child, and S is in the relationship, H is not the product of the relationship between J and S. H's connection with J only arose because J commenced a relationship with S. It did not arise from any actions of the couple to add a child to their relationship.

Item 18

55 This item provides that the amendments made to the PCSS Act by Schedule 1 to the Bill only apply in respect of benefits payable as a result of the death of a person entitled to a parliamentary allowance or PCSS retiring allowance (whether or not the retiring allowance was immediately payable) that occurs on or after the commencement of Schedule 1 to the Bill.

Superannuation Act 1922

56 The scheme established under the 1922 Act has been closed since 1 July 1976. At that time all contributors were transferred to the CSS. However, the 1922 Act provides for the payment of benefits to or in respect of contributors or pensioners who died or retired before that date.

57 The 1922 Act provides for reversionary death benefits to be paid to the widow or in some cases, the widower of a deceased contributor or pensioner. Pensions are also payable to eligible children.

58 Under section 48AB of the 1922 Act, the Commissioner for Superannuation, in certain circumstances, may grant a pension to or in respect of a person who would be eligible to have a pension paid to or in respect of them if Part IV of the 1976 Act applied to them. It is not necessary, therefore, to make substantive amendments to the 1922 Act in relation to a person in a same-sex relationship as the amendments made to the 1976 Act will flow through to the granting of a pension by the Commissioner under section 48AB, and to the allocation of a pension under section 48ABA, where there is more than one spouse.

Item 19

59 This item inserts subsection 48AB(4A) into the 1922 Act. This new subsection makes it clear that the amendments to the 1976 Act to extend to those persons who can be eligible for death benefits do not apply to a pensioner or contributor in the Superannuation Act 1922 scheme if they died before the commencement of Schedule 1 of the Bill.

Item 20

60 This item inserts new subsection 48ABA(9) into the 1922 Act. This new subsection makes it clear that the amendments to the 1976 Act do not apply to the definitions of ' eligible child' and ' spouse' in subsection 48ABA(1) of the 1922 Act if the deceased pensioner died before the commencement of Schedule 1 of the Bill.

Superannuation Act 1976

61 The scheme established under the 1976 Act has been closed to new members since 1 July 1990. The scheme provides a defined benefit superannuation scheme under which benefits are paid to former employees of the Australian Government. The 1976 Act provides for reversionary death benefits to be paid to the spouse with additional amounts for eligible children or partially dependent children of the deceased contributor or pensioner. An orphan benefit is payable for eligible children or partially dependent children if a spouse's benefit is not payable.

Item 21

62 This item repeals the definition of ' child' in subsection 3(1) of the 1976 Act and inserts a new definition. The new definition expands the classes of children that may be taken to be a child of the member for the purposes of determining eligibility for benefits. It adds a new criteria that, if, at any time, the person had a partner, a child who is the product of the person's relationship with that partner may be taken to be the member's child.

63 Item 21 also inserts a note at the end of the new definition of ' child' that provides that new subsection 3(10) of the 1976 Act is relevant to working out when a child is a product of a relationship for the purposes of the subparagraphs (a)(ii) and (b)(ii) of the definition of ' child' .

64 Subparagraphs (a)(ii) and (b)(ii) of the definition of ' child' provides that a child can be considered to be a member's child where the child is the product of the person's relationship with their partner.

65 Subsection 3(10) requires that the child is:

-

the biological child of at least one person in the relationship, i.e. is conceived utilising the gametes of one party to the relationship; or

-

the birth child of a woman in the relationship.

66 Examples 1 and 2 below outline circumstances where a child would meet the requirements of subparagraphs (a)(ii) and (b)(ii) in subsection 3(1). The circumstances indicated in example 3 would not meet these requirements.

Example 1

J is a scheme member and forms a relationship as a couple with S. During the relationship J and S decide that S will undergo an artificial conception procedure using gametes from S and a donor. The procedure takes place and S gives birth to H. Whilst H is the biological child of S, he is not the biological child of J.

67 H can be considered the child of J for the purposes of the definition of ' child' in the 1976 Act. That is, H is the product of the relationship between J and S and is S's biological child. This would continue to be the case even if the relationship between J and S were to break down at a later time.

Example 2

J is a scheme member and forms a relationship as a couple 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. Whilst H is the birth child of S, he is not the biological child of either J or S.

68 H can be considered the child of J for the purposes of the definition of ' child' in the 1976 Act. That is, H is the product of the relationship between J and S and S is H's birth mother. This would continue to be the case even if the relationship between J and S were to break down at a later time.

Example 3

J is a scheme member and forms a relationship as a couple with S. S has a child H from a previous relationship.

69 H cannot be considered J's child for the purposes of the definition of ' child' in the 1976 Act. Whilst H is S's biological child, and S is in the relationship, H is not the product of the relationship between J and S. H's connection with J only arose because J commenced a relationship with S.

Item 22

70 This item inserts into subsection 3(1) of the 1976 Act a signpost to the definition of the term ' couple relationship' in section 8A of the 1976 Act.

Item 23

71 This item repeals the definition of ' late short-term marital relationship' and inserts a new definition as a consequence of amendments made by item 27 to ' marital relationship' .

Item 24

72 This item inserts a definition of ' partner' into subsection 3(1) of the 1976 Act. This amendment is related to the amendment being made to section 8A of the 1976 Act by item 28 to replace the phrase ' husband or wife' with the term ' partner' . This will extend the range of persons who can be considered to be eligible for death benefits to include a person in a same-sex relationship with a scheme member.

Item 25

73 This item inserts a signpost into subsection 3(1) of the 1976 Act to indicate that the term ' spouse' has a meaning as affected by section 8B of the 1976 Act.

Item 26

74 Item 26 inserts subsection 3(10) into the 1976 Act. Subsection 3(10) provides that, for the purposes of the 1976 Act, a child cannot be the product of a relationship, whether between same or opposite-sex partners, unless the child is the biological child of at least one person in the relationship or is born to a woman in the relationship. This is relevant to new provisions, such subparagraphs (a)(ii) and (b)(ii) of the definition of ' child' , being inserted by item 21 into the 1976 Act.

Items 27 and 28

75 Existing sections 8A and 8B of the 1976 Act set out the requirements for a person to be considered to be a spouse for the payment of death benefits. Under these provisions, a person can be considered to be a spouse if the person had a marital relationship with another person at a particular time as defined in section 8A of the 1976 Act. One requirement of having a marital relationship is that the person ordinarily lived with another person as that other person's husband or wife. This means that currently only a married or opposite-sex de facto spouse of a deceased scheme member can be considered to have had a marital relationship with the member and therefore be eligible for death benefits as a spouse.

76 Item 27 replaces the term ' marital relationship' with the term ' couple relationship' in subsection 8A(1) of the 1976 Act. The heading to section 8A is also replaced with a new heading that refers to a ' couple relationship' .

77 Item 28 replaces the phrase ' husband or wife' with the term ' partner' in subsection 8A(1). The term ' partner' is defined in subsection 3(1) of the 1976 Act (see item 24).

78 The effect of the amendments made in these items is to ensure that the definition of a relationship, for the purpose of the payment of death benefits, includes a same-sex relationship as well as an opposite-sex relationship. The inclusion of same-sex relationships within this definition is not intended to change the treatment of married or opposite-sex de facto couples. It removes same-sex discrimination but does not change or re-define any other indicia of a relationship.

Item 29

79 This item amends subsection 8A(2) of the 1976 Act as a consequence of amendments made by item 28.

Item 30

80 This item amends subsection 8A(3) of the 1976 Act as a consequence of amendments made by item 27.

Items 31 and 32

81 Subsection 8A(4) of the 1976 Act outlines evidence that may be relevant for determining whether a person in a relationship of less than 3 years duration ordinarily lived with the other person as their ' partner' on a permanent and bona fide domestic basis. The circumstances listed are not intended to be exhaustive but do cover some of the more common circumstances, such as where the couple are married, have a child or jointly own their home.

82 Items 31 and 32 insert paragraph's 8A(4)(ba) and subparagraph 8A(4)(c)(iii) into the 1976 Act to reflect that the concept of spouse and child used for the purpose of the payment of death benefits extend to persons in same-sex relationships. Item 32 also includes a note that provides that new subsection 3(10) is relevant to working out when a child is a product of a relationship for the purposes of the new subparagraph 8A(4)(c)(iii).

83 Relevant evidence will now include whether:

-

the persons' relationship is registered under a State or Territory law prescribed for the purposes of paragraph 4AB(4)(ba) of the Judges' Pensions Act 1968 as a kind of relationship prescribed for the purposes of that paragraph; and

-

whether there is a child who is the product of the relationship between the persons.

84 This will assist the Australian Reward Investment Alliance (the Board) in determining whether two persons, particularly where they are of the same sex, had a ' couple relationship' where the persons were in a relationship for a period of less than 3 years.

85 As it is intended that the prescribed relationships and prescribed State and Territory legislation should be the same for the Commonwealth civilian and military (defined benefit) superannuation schemes, for administrative convenience they will be specified in the Judges' Pensions Act.

Items 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 45, 47, 48, 49, 51, 53, 55 and 57

86 These items amend the reference to ' marital relationship' in various sections of the 1976 Act as a consequence of amendments made by item 27 to replace the term ' marital relationship' with the term ' couple relationship' .

Items 44 and 46

87 Subsection 110(5B) provides for the matters which the Board must take into account when determining the benefits payable in respect of particular children of deceased retirement pensioners who had had a ' late short-term couple relationship' . The particular children taken into account in this provision are outlined in paragraph 110(5B)(b). Broadly speaking, they are an eligible child that was not a child of the marital relationship and was in the care, custody or control of the spouse.

88 Item 44 extends the categories of children to be taken into account by inserting subparagraph 110(5B)(b)(ia) into the 1976 Act. The new subparagraph provides that where members of a couple are of the same sex the Board must take into consideration an eligible child in the care, custody or control of the spouse who was not a child of the ' couple relationship' .

89 Item 46 adds a note at the end of subsection 110(5B) that new subsection 3(10) of the 1976 Act is relevant to working out when a child is a product of a relationship for the purposes of the new subparagraph 110(5B)(b)(ia).

Items 50 and 52

90 Subsection 110(7A) applies to benefits payable in respect of particular children of deceased retirement pensioners who had had a ' late short-term couple relationship' . The particular children taken into account in this provision are outlined in subsections (7A)(b) and (c). Broadly speaking, they are an eligible child that was a child of the couple relationship and was not in the care, custody or control of a deceased retirement pensioner or any of the surviving spouses.

91 Item 50 inserts subparagraph 7A(b)(ia) into the 1976 Act. This will ensure that a child who is the product of a relationship between a person and the pensioner that is a couple relationship will be considered as the child of a couple relationship for the purposes of this provision.

92 Item 52 adds a note at the end of paragraph 110(7A)(b) that new subsection 3(10) of the 1976 Act is relevant to working out when a child is a product of a relationship for the purposes of the new subparagraph 110(7A)(b)(ia).

Item 54

93 This item amends paragraph 110(14)(d) as a consequence of the new definition of ' child' in subsection 3(1). This will ensure that children who are the product of a relationship will be included in this provision.

Item 56

94 This item amends subparagraph 136(2B)(ma)(iv) as a consequence of item 23 which replaces the definition of ' late short-term marital relationship' with a new definition of ' late short-term couple relationship' .

Item 58

95 This item provides that the amendments made to the 1976 Act by Schedule 1 only apply in respect of benefits payable as a result of the death of an ' eligible employee' , ' retirement pensioner' or ' deferred benefit member' that occurs on or after the commencement of Schedule 1. The term ' deferred benefit member' is defined in Division 4A of Part V of the 1976 Act.