In 2008, the Commonwealth Government passed laws to recognise same-sex couples. These included changes to Australia’s taxation and superannuation laws to give same-sex couples the same entitlements as opposite-sex couples.

Tax: what has changed

The amount of tax that a person is required to pay can vary based on whether they are in a de facto relationship or have dependent children. At the moment, same-sex couples cannot access a range of rebates and tax concessions that are available to opposite-sex couples, including the dependant spouse off-set, favourable tax treatment for a transfer of property between partners, and the senior Australian’s tax rebate.

From 1 July 2009, taxation laws will be reformed to allow same-sex couples to access the same tax benefits and concessions that are available to married and opposite-sex de facto couples. The children of same-sex couples will also be treated in the same way as children of a marriage. The changes will impact on the information that you’ll provide in your 2009-10 tax return.

Examples of tax laws that will change from 1 July 2009 include:

• Combining the income of same-sex de facto partners for the purpose of the Medicare levy and Medicare levy surcharge. You may be eligible for a reduction of the Medicare levy based on your family income, which will include your de facto partner’s income and consideration of any children you may have. Also, your liability to pay the Medicare Levy Surcharge may change. For example, if you have previously paid the surcharge because your income is above $50,000, the Australian Taxation Office will now consider whether you and your partner have a combined income of above $100,000, which is the family threshold.
  
  
• Availability of dependant tax offsets. If you maintained your de facto partner (for example, you helped them pay for their food, lodging, living costs, educational costs) you may be eligible to claim a dependant spouse tax offset. Also, if you maintained your de facto partner’s parent you may be able to claim a tax offset.
  
  
• Tax on the transfer of assets after a relationship breakdown. If you transfer an asset to your de facto partner after your relationship ends you may be able to roll over the capital gains tax you would otherwise be required to pay. (This will only apply where the transfer occurs because of a binding written agreement or court order).
  
  

Superannuation: what has changed?

Superannuation laws have been changed to end discrimination in the way superannuation laws deal with same-sex de facto couples and their children. Unlike some of the other federal reforms, many of these amendments have retrospective effect, from 1 July 2008 or have commenced.

Examples of superannuation laws that have changed include:

• Private superannuation funds and death benefits. Previously, a same-sex de facto partner could only receive a death benefit from a private superannuation fund if he or she qualified as a financial dependant or interdependent. The reforms expand the definition of ‘spouse’ to include same-sex de facto partners, and the definition of ‘child’ to include most children in same-sex families. This will allow private sector superannuation trustees to make same-sex couples and their children eligible for death benefits in the same way as paid to opposite-sex partners and their children.
  
  
• Commonwealth superannuation funds. Same-sex de facto partners and children of Commonwealth public servants now receive equal access to death benefits and reversionary pensions under Commonwealth superannuation schemes, as well as judicial and other pensions.

   
  

  
  
• Taxation on superannuation. Tax laws have been amended for 2008–09 to allow a same-sex de facto partner or the child of a same-sex couple who receives a superannuation lump sum death benefit to receive the same death benefit tax concessions.

  
  

  
  
• Superannuation contributions splitting. Same-sex de facto couples are now eligible for superannuation contributions splitting, which allows a same-sex de facto partner to direct super contributions to the super fund of a partner with a lower superannuation benefit. This minimises tax liabilities.

   

  
  
  
• Superannuation spouse tax offset. Same-sex de facto partners will be eligible for a tax offset if they make an after-tax superannuation contribution on behalf of their low-income earning partner.

   

Where can I get more information?

For more information call the Australian Taxation Office (ATO) on 13 28 61 or visit http://www.ato.gov.au/. 

For more information on superannuation contact your superannuation fund.

See also: De facto relationships: Am I a de facto partner?