CHAPTER 4
INTERDEPENDENT RELATIONSHIPS
4.1
This chapter explores
the issues concerning interdependent relationships, including:
- legal recognition of interdependent relationships in Commonwealth
superannuation laws;
- coverage of interdependent relationships; and
- terms of reference for the inquiry.
Legal recognition of interdependent relationships in Commonwealth
superannuation laws
4.2
Prior to 1 July 2004, the Superannuation Industry (Supervision) Act 1993 (SIS
Act) defined 'dependant', in relation to a person, as the 'spouse and
any child of the person'. 'Spouse' included 'another person who, although not
legally married to the person, lives with the person on a genuine domestic
basis as the husband or wife of the person'. 'Child'
included 'an adopted child, a step-child or an ex-nuptial child of the person'.[1]
4.3
Accordingly, same-sex
partners could not receive death benefits or related tax benefits direct from
superannuation funds. Instead, a surviving same-sex partner had to establish a
claim as a financial dependant, and entitlements paid to financial dependants
were received not from the fund but the estate of the former scheme members.
4.4
The disadvantages of
receiving payments from a deceased estate rather than a superannuation fund
were highlighted
by Mr Andrew Charaneka from the Law Council of Australia:
That then raises
issues in terms of timing, contest and whether the entire benefit would be made
available to the survivor if, for example, the deceased person had certain
debts owing at the time of death that would be accounted for from that
superannuation death benefit distribution.[2]
4.5
The enactment of the Superannuation
Legislation Amendment (Choice of Superannuation Funds) Act 2004 extended
the definition of 'dependant' to include, in relation to a person, 'any person
with whom the person has an interdependency relationship'.[3] The circumstances in which two persons
will be deemed to have an 'interdependency relationship' were also described in
the legislation, that is, if:
- they have a close personal relationship;
- one or each of them provides the other with financial support;
and
- one or each of them provides the other with domestic support and
personal care.[4]
4.6
The introduction of
the interdependency provisions enabled surviving same-sex partners to access
death benefit distributions (and related tax benefits) direct from
superannuation funds.
4.7
However, as pointed
out by Associate Professor Miranda Stewart and others, the SIS Act provisions are
not mandatory for private sector superannuation funds:
...the SIS Act
regulates private superannuation funds that are administered under
superannuation trust deeds, as well as providing definitions to which the
various Commonwealth superannuation funds refer. The SIS regulatory regime is
generally permissive (except for its prudential requirements on funds). Thus,
this amendment, while enabling recognition of the partner of a private
superannuation fund member, does not mandate such recognition.[5]
4.8
While many private superannuation
fund trust deeds incorporate the definitions contained in the SIS Act, an
uncertain number of private superannuation fund trust deeds do not. Mr
Ross Clare from the Association of Superannuation
Funds of Australia told the committee:
Certainly the bulk
of funds would not pick up the definitions automatically. A significant
minority would require amendment of trust deeds to pick it up. We have
certainly seen indications of a willingness to do that.[6]
4.9
The committee notes
therefore that same-sex partners are currently categorised as dependants under
the interdependency provisions, a position different to that of opposite-sex de
facto partners, and that classification as an 'interdependent' requires a
person to first fulfil certain criteria. However, as discussed later in this
chapter, fulfilling these criteria imposes a more difficult requirement on
same-sex couples than for opposite-sex couples, and is thus discriminatory.
Coverage of interdependent relationships
4.10
The issue of
discrimination was also raised in the House of Representatives during the
second reading debates by the Hon. Dr Brendan Nelson MP, the then Leader of the
Opposition. However, Dr Nelson was concerned with discrimination
between same-sex couples and other 'permanent domestic non-married
relationships'.
In pursuing law
reform in this area we must be very careful to avoid the trap of creating new
inequalities by according economic recognition to the status of some types of
relationships but leaving others unrecognised. This bill opens the door on the
whole question of the proper treatment of all kinds of interdependent
relationships outside marriage.
...
There is, in the
opposition’s view, a strong argument for giving those relationships as much
recognition and respect as we give to same-sex relationships. In our view, just
as same-sex couples should not be discriminated against, so too they should not
be accorded a recognition and status denied to other permanent, domestic,
non-marital relationships.[7]
4.11
The committee notes that
intent of the Bill is to remove discrimination against same-sex couples and
their children in Acts governing Commonwealth (defined benefit) superannuation
schemes (and related Acts). The Bill does not provide for other dependants
classified as 'interdependents'.
Terms of reference for the inquiry
4.12
When the Senate
referred the Bill, it set a number of terms of reference
that it asked the committee to address, including matters related to
'interdependents'. The terms of reference are detailed in chapter 1, and are separately
discussed below.
Existence, recognition and relative
numbers of certain interdependents
4.13
Term of reference
(ii) requested the committee to inquire into empirical evidence from the states
concerning the existence, recognition, and relative numbers of interdependent
relationships, other than de facto (whether opposite-sex or same-sex) and
marital relationships.[8]
4.14
Neither submissions nor
evidence provided the committee with any empirical evidence concerning the
existence, recognition and relative numbers of such interdependency
relationships.
4.15
State and territory relationship
registers appear to be one of the few, if not the only, means by which
empirical evidence could be gleaned. However, as indicated, no submissions were
received from state and territory governments, and the existing registers are
not useful indicators of the numbers of interdependency relationships.
The Victorian
register of relationships became operational very recently, the ACT register
does not permit the registration of non-conjugal relationships (amongst other
things specifically prohibiting registration of relationships between
relatives), and the Tasmanian figures that have been published [100 only in the
past five years] do not split between same sex couples and other registrable
relationships.[9]
4.16
The Tasmanian Gay
& Lesbian Rights Group pointed out that, to date, existing registration
schemes might have been under utilised.
It is true that only
a handful of caring relationships have been registered in Tasmania. In this regard we note that the Tasmanian Government has done
nothing whatsoever to explain or promote the benefits of registration to caring
partners.[10]
4.17
The committee notes
that state and territory relationship registers provide an option for formal,
legal recognition of relationships, but that there is not necessarily any consistency
in terms of either availability or the types of relationships which can be
registered.
Interdependents' incorporation
within 'couple relationship'
4.18
Term of reference
(iii) requested the committee to inquire into whether the definition of ‘couple
relationship’ should be amended to incorporate other interdependent
relationships and, if so, whether the definitions should be broadened to
include those relationships or whether a separate definition is required.[11]
4.19
The Association of
Superannuation Funds of Australia argued that the characteristics of
interdependent relationships do not 'fit at all well' within the definition of
'couple relationship'.
A parent would find
it unhelpful and perhaps even disturbing to have to establish that they are in
a ‘couple relationship’ with an adult child still living at home even if the
definition of couple relationship were expanded to cover such circumstances.[12]
4.20
HREOC similarly
argued that the definition of 'couple relationship' is clear and intended to apply
to couples only (opposite-sex or same-sex).
This definition
should not be confused by broadening to include those who are in
‘interdependent relationships’.[13]
4.21
The committee notes
that these submissions address the term of reference, but that there were a considerable
number of submitters and witnesses who rephrased the term of reference as
'should same-sex couples be included within the interdependency category' to
which the overwhelming response was in the negative.
4.22
Foremost among these
was HREOC which argued that, in three different areas of Commonwealth law, same-sex
couples treated as interdependents have not been afforded treatment equal to
that of either married or opposite-sex de facto couples.
4.23
HREOC stated that the
three ways in which that categorisation continues to perpetuate discrimination
are:
- the criteria for establishing an 'interdependency relationship'
may be more difficult to establish than those for an opposite-sex married or de
facto couple;
- the characterisation of same-sex relationships as 'interdependent
relationships' suggests that there is something different about the quality of
a same-sex relationship to that of an opposite-sex relationship; and
- the interdependency category may confer financial entitlements on
people who are not in a couple.[14]
4.24
The first and second
points were raised at the hearings and are discussed below.
The criteria
4.25
In relation to establishing
an 'interdependent relationship', witnesses told the committee that the
criteria of 'financial support' and 'domestic and personal care' are difficult
for same-sex couples to satisfy.
4.26
Mr Robert Hodge from the Association of Superannuation
Funds of Australia submitted that same-sex couples have more of an emotional
relationship than a financial relationship.
You can have two people
who are financially independent—that is, they both have jobs and they are both
able to look after themselves. So they are not actually directly providing
financial support...which does not apply in other de facto relationships or
marital relationships.[15]
4.27
Furthermore, 'most
people do not record instances of providing domestic support and personal care',[16] and that criterion has been difficult
for same-sex couples, and others, to evidence.
4.28
Associate Professor Stewart was also critical of the 'complex' set of interdependency
requirements that currently apply to same-sex de facto couples. She stated that
these requirements are onerous compared to the standard list of factors, which
courts use to define opposite-sex de facto couples, and they are not appropriate.
In particular, the
concept of domestic support and personal care is not a factor that exists in
the general list of factors that courts use to consider couple
relationships...The only legal interpretation of a phrase like that which has
been done to date is actually in New South Wales law...The interpretation
essentially required that it be care in the way that you would think of as a
carer relationship—that is, someone who is seriously ill, requires physical
assistance in dressing or whatever, or requires ongoing assistance with mental
or physical health.[17]
4.29
Associate Professor Stewart added:
As a matter of
policy and of legal clarity and certainty of administration, it is
inappropriate to include same-sex couple relationships in the category of
interdependency relationships...The two kinds of relationships are different; the
latter concept is clearly targeted to a carer relationship and is well suited
to that category only. Same-sex couple relationships are much more similar to
opposite-sex couple relationships than they are to any form of carer/companion,
sibling or parent/child relationship, the categories intended to be covered by
the interdependency category.[18]
4.30
The discriminatory
nature of the interdependency relationship criteria was alluded to by the Australian
Federation of AIDS Organisations when it described the criteria as intrusive
and overly complicated.
Unlike heterosexual
de-facto couples who must meet the criteria of a ‘spouse’, a same-sex partner
can only be conferred a death benefit after superannuation trustees have
considered numerous highly intrusive factors relating to their relationship.[19]
Characterisation
4.31
HREOC's second
criticism that categorisation of same-sex couples as 'interdependents' suggests
there is a qualitative difference between opposite-sex and same-sex
relationships was supported in several submissions and evidence.
4.32
The Australian
Federation of AIDS Organisations submitted:
The relegation of
same-sex couples to a separate category that includes other interdependent
people who are not members of a ‘couple’ (eg. two elderly friends or siblings
living with, and caring for, each other) is of itself highly problematic. Not
only does it fail to represent the reality of same-sex couples, it is
marginalising and stigmatising. It fails to acknowledge the depth and sincerity
of same-sex relationships, and suggests there is something intrinsically
different (or lesser) between opposite-sex and same- sex couple relationships.[20]
4.33
Dr John Challis from the Superannuated Commonwealth
Officers' Association suggested that there is an ulterior motive for including
same-sex relationships within the interdependency category.
It transforms them
into some kind of sanitised asexual relationship. They are sort of whitewashed
in a sense and made more respectable by calling them interdependent
relationships instead of same-sex relationships.[21]
4.34
Witnesses strongly
rejected the notion that their support for the inclusion of same-sex couples in
the category of de facto relationships, rather than that of interdependency,
demeans, or considers inferior, other permanent, loving, domestic
relationships.
4.35
HREOC asserted that
same-sex relationships are not superior to other kinds of 'interdependency
relationships': they are simply different and more akin to de facto relationships.
A marital couple
relationship that is well recognised in the law, where de facto couples are
recognised according to a set of well-established criteria, both in legislation
and in the common law, is fundamentally different to the interdependent relationships
that you are talking about, which would not meet all of those criteria that are
well established to determine a de facto or marital couple relationship. Our
view is that same-sex couples who would meet those criteria except for the fact
that they are of the same sex should be recognised in the same way as other
couple relationships.[22]
4.36
The NSW Gay and
Lesbian Rights Lobby agreed, having no objection to recognising other
'interdependents', but disputing that same-sex couples were properly classified
in a carer category.
What we do have an
objection to is saying de facto heterosexual couples are different to same-sex
de facto couples and putting the latter in a carer category as opposed to where
they properly belong, which is akin to heterosexual de facto couples.[23]
4.37
Similarly, the
Australian Coalition for Equality noted:
It has not been
suggested that opposite sex de facto relationships be placed on the same legal
footing with “two aunts living together”.[24]
4.38
Mr Kevin Boreham, a legal academic based at the ANU College of Law, submitted that including
same-sex relationships in a non-de facto category lacked the element of
fairness.
It would be unfair
for the Parliament, having denied same sex couples the status of married
couples in the 2004 amendments to the Marriage Act, now to deny us even the
recognition that a committed same sex relationship has a definable difference
from other relationships of people living together.[25]
4.39
Reverend Elenie Poulos from Uniting Justice Australia discounted the issue of 'interdependency relationships',
arguing that it is not at all relevant to the intent of the Bill.
The amendments are
about couples who live in a specific kind of relationship. What we are
concerned about is that people who live in exactly the same kind of relationship
have, up to this point, been excluded from the same privileges by virtue of
their gender alone.[26]
Intedependency relationship - a
separate issue
4.40
As indicated in preceding
paragraphs, there was some discussion during the inquiry about interdependent
relationships and whether discrimination against people in such relationships
also needs to be addressed along with discrimination against same-sex couples. At
the hearings for this inquiry, some witnesses remarked upon the need for a
thorough examination of the position of interdependents.
4.41
Ms Emily Gray from the NSW Gay and Lesbian Rights
Lobby told the committee:
There are many
instances in this country where the living situation of sister or carer
relationships do need to be recognised and protected, but we think that is a
whole other area of law that would need a whole separate inquiry.[27]
4.42
Several submissions
agreed with the Australian Christian Lobby and the Lutheran Church of
Australia-Commission on Social and Bioethical Questions, respectively, that the
issue was one of principle:
If the goal is to
remove unfair discrimination, that should also be removed against those in
other types of interdependent relationships.[28]
We believe strongly
that any changes in our
laws in this area should focus on the long-term domestic co-dependent
relationship...All of the media attention appears to be focused on same-sex
couples, and we are concerned that other domestic co-dependents should benefit
equally from your legal reform. Surely it would be inappropriate for our
government to be seen to discriminate against people because of a perceived
lack of sexual activity.[29]
Commonwealth recognition of
registered relationships
4.43
While there are
outstanding issues regarding the legal recognition of interdependents, the Bill
enhances the recognition of same-sex couples in Commonwealth superannuation laws
with the addition of the registered relationships as an indicia of a 'couple
relationship'.
4.44
In general, this
amendment was welcomed with some submitters and witnesses suggesting ways in
which the provisions could be further improved.
4.45
Associate Professor Stewart, for example, considered it appropriate for the Bill to amend paragraph 4AB(4)(ba) of the Judges' Pension Act
1968 as relevant evidence of a 'couple relationship' in the affected Acts.
But,
it would be more
appropriate to have this general provision in the Acts Interpretation Act. [30]
4.46
Furthermore, Associate Professor Stewart recommended that the provision be extended, 'to enable the
government to prescribe the law of another country under which registration is
allowed, so as to assist in this evidentiary exercise.'[31]
4.47
However, the
committee also received submissions critical of the amendment. The main reason
for this criticism was that the provision would not advance the objectives of
the Bill due to the inadequacies of the state and
territory registration schemes.[32]
4.48
Mr Boreham considered the proposed provision unequal
and inefficient, identifying the inconsistent availability of registration
schemes as a problem.
Partners in a same
sex relationship will be able to access the entitlements recognised in the Bill only if one partner lives in the ACT, Tasmania or Victoria, the only jurisdictions which have
registration schemes for same sex partners. Other people in same sex relationships
will have to wait until the Parliaments in their jurisdiction get around to
establishing registration schemes.[33]
4.49
Mr Boreham suggested that the establishment of a
national relationships registration scheme would be one way in which the
Commonwealth could overcome part of the problem, but acknowledged that this
would require a referral of power by the states and territories under section
51(xxxvii) of the Constitution.
It seems much more
likely that the States would make such a referral promptly if requested, than
that they will each assign the same high priority to drafting, consulting on
and enacting consistent partnership registration schemes.[34]
4.50
The committee
acknowledges that the recognition of registered relationships provided for in
the Bill will have limited application, and notes
that the General Law Reform Bill contains identical provisions.
4.51
There was some
suggestion that registered relationships should be treated as a completely
separate category to de facto relationships. Mr Rodney Croome from the Australian Coalition for
Equality, for example, argued:
A registered
relationship is neither a de facto relationship with a certificate nor marriage
by another name. A registered relationship is a new kind of legally recognised
relationship. When a couple, for instance, in Tasmania
or the ACT, register their civil partnership or their significant relationship,
what they are doing is choosing specifically to no longer to be considered a de
facto couple.[35]
4.52
The committee refers
to its report on the Family Law Amendment (De Facto Financial Matters and Other
Measures) Bill 2008, where this issue is discussed in more detail.
Fiscal implications of statutory
recognition of other interdependent relationships
4.53
Term of reference
(iv) requested the committee to inquire into the fiscal implications of the
statutory recognition of other interdependent relationships for superannuation
and taxation purposes.[36]
4.54
Neither submissions
nor evidence provided the committee with any precise information in this
regard. Instead, submitters and witnesses limited themselves to general
commentary on the likely fiscal implications in relation to 'permanent domestic
non-married relationships', and the likely fiscal implications in relation to
same-sex partners. Both types of commentary are discussed below.
4.55
The Association of
Superannuation Funds of Australia informed the committee that the main groups
to benefit from interdependency provisions have been same-sex partners, and the
parents of children who were living at home prior to their death.
Other possible
beneficiaries...are likely to be very rare in actual practice.[37]
4.56
It was also pointed
out that compulsory superannuation is a relatively recent invention, and accordingly,
the majority of people do not have superannuation entitlements at the time of
their death. The Association of Superannuation Funds of Australia stated that,
'in 2006-07 there were around 140,000 deaths in Australia
but only 36,000 death benefits paid by superannuation funds.'[38]
4.57
The combination of
these two factors, determinable beneficiaries and non-existent entitlements,
led the Community and Public Sector Union and the Superannuated Commonwealth
Officers' Association to respectively conclude that the cost of statutorily
recognising interdependency relationships, other than same-sex relationships, is
likely to be 'negligible,[39] or at least relatively insignificant.[40]
4.58
The committee
observes that almost 90 per cent of Australians are in private superannuation
funds, which are not necessarily affected by the Bill,
and that most superannuation funds are accumulation funds, which would have no
cost implications under the proposed Bill.[41] For those Australians in Commonwealth superannuation
(defined benefit) schemes, and private superannuation (defined benefit) funds
which incorporate the provisions of the Bill, there will be cost implications.
4.59
The committee notes
that the Bill does not intend to encompass
'interdependency relationships' however numerically or fiscally insignificant.
4.60
In the public sector,
the Explanatory Memorandum provided the following information on the cost implications of the Bill.
Table 1: Approximate increase in unfunded liability
|
|
($ million)
|
|
Schemes administered by the Department of Finance and
Deregulation
|
81.5
|
|
Schemes administered by the Department of Defence
|
30.0
|
|
Schemes administered by the Attorney-General's Department
|
1.0
|
Source: Explanatory Memorandum, p. 3.
4.61
The Explanatory
Memorandum also provided information regarding the four year financial
impact across various departments and agencies, noting that these will be
ongoing.[42]
4.62
The committee
received no further information regarding the fiscal implications of the
statutory recognition of same-sex relationships in Commonwealth superannuation
laws.
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