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Same sex couples and superannuation benefits

in Family Law, Superannuation & Insurance by Annemarie Gambera on

Marriage equality is an important topic. Do we need a public vote or simply for the pollies to amend the existing Marriage Act?  With the plebiscite being hotly debated in Australia, other key topics such as superannuation benefits should also be raised. 

The union of marriage provides automatic recognition, for example, if a spouse or child is injured, the other spouse is automatically looked to by schools, hospitals and the like as having authority to make decisions.

The absence of such automatic recognition may cause difficulty for a same-sex partner in claiming superannuation monies, despite the definition of spouse in superannuation laws which states that a spouse includes:

  • Another person who is legally married to the person;
  • Another person (whether of the same sex or a different sex) with whom the person is in a prescribed kind of relationship that is registered under a State or Territory law (for example, in Victoria the Relationships Act 2008); and
  • Another person who is not legally married to the other person but lives with that person in a genuine domestic relationship as a couple

Where there is no legal marriage, a successful claim for payment of superannuation might depend on numerous factors including whether you were in an “interdependent relationship”.

The basic test of an interdependent relationship has four elements:

  • Did you have a close personal relationship with the deceased member?
  • Were you living together?
  • Did one or each of you provide financial support to the other?
  • Did one or each of you provide domestic support and personal care to the other?

You may have named your partner in your will as a beneficiary, but that is not enough to ensure your partner will receive the benefits, which can be substantial, in and through the superannuation fund. Superannuation benefits in most cases do not form part of the estate.

The best way to ensure your wishes are carried out is to complete a binding nomination form (which most funds offer), nominating your partner as the person to whom the superannuation benefits are to be paid.

To remain valid, the binding nomination form must be renewed every three years.

On one occasion the Superannuation Complaints Tribunal (“SCT”) found the girlfriend of an 18-year-old deceased member was entitled to payment of the death benefit through his superannuation fund on the basis that they were in an interdependent relationship.  According to the SCT this was because:

  • The couple had been dating for 2 years and had engaged in sexual activity together;
  • Three months prior to his death the member moved in with the girlfriend who resided at her parent’s home;
  •  They did not share a joint bank account but paid for each other’s expenses from time to time; and
  •  Shared domestic duties

This decision highlights the difficulties faced by superannuation funds in distributing superannuation money where the wishes of the deceased are not recorded in a binding nomination.