The children of same-sex couples will now be recognised as the "child of the person's spouse", replacing the term "product of the relationship". whilst the terminology is simpler to apply, problems are still posed with interpretation, writes Nathan Hodge.
Following a Senate committee report, the Government has changed its approach to determining the scope of the family relationship for a same-sex couple in its Same Sex-Relationships (Equal Treatment Commonwealth Laws - Superannuation) Bill 2008 (the Bill). As a result, the legislative tests for recognising a same-sex couple and their children are now somewhat simpler, if radically different.
The Bill, passed by the House of Representatives on 18 June 2008, was referred to a Senate committee, which released its report on 14 October 2008. The report recommended that the definition of "child", which was identified as one of the main problems with the Bill, be aligned with recent amendments to the definition of "child of a de facto relationship" proposed for the Family Law Act 1975 (Cth) (the FLA).
Liberal Senators on the committee appeared to support the Bill's aim, although they recommended changes to terminology to distinguish between marriage and de facto relationships to ensure that the Bill did not undermine the "unique status of marriage in Commonwealth law".
The Government has adopted the committee's recommendations and, at the same time as the report was released, introduced amendments to the Bill (the Amended Bill). At the time of writing, the Bill was yet to be considered by the Senate.
Prior to the most recent amendments, the Bill contained two main amendments to the Superannuation Industry (Supervision) Act 1993 (Cth) (the SIS Act) which would impact the process of determining a person's dependants. It sought to:
amend the definition of "spouse" to include a person who is in a relationship with another person as a couple (whether the persons are of the same sex or different sexes).
expand the classes of children to be taken as a member's child by including any child who was a "product of the relationship".
The Amended Bill contains a two-limbed definition of spouse. The first incorporates the definition of spouse adopted in the original Bill, which essentially captures marital relationships and de facto (same or opposite sex) relationships. Persons in relationships registered on prescribed State and Territory relationship registers are spouses under the second limb.
This means that the Amended Bill recognises registration of a relationship with a prescribed State or Territory relationship register as conclusive proof of the existence of the relationship. Currently, only Tasmania has a relationships register, although there are plans for Victoria and the ACT to follow suit. Further, the local councils in Melbourne, Yarra and Sydney each have their own relationship registers, but it is not clear whether any council-based relationship registers would be prescribed for the purposes of the SIS Act.
The second limb should assist superannuation trustees in determining dependency (and those in registered relationships to prove dependency), because evidence of the existence of a same-sex relationship could be obtained through the register rather than obtaining significant personal details about nature of the relationship.
Of course, superannuation trustees would need to amend their documentation and processes to incorporate references to the relationship register.
Even more significant changes have been made to the definition of "child". The Amended Bill replaces the problematic term "product of the relationship" with the simpler "child of the person's spouse". This terminology is easy to understand and, arguably, simpler to apply.
The new terminology would capture most children in same-sex relationships, including children of a previous relationship, but it is not without problems. The approach adopted in the original Bill implied a need for a joint undertaking by both spouses to bring a child into the relationship.
This element is not present in the new approach. For example, what if the child was the product of the previous relationship of the member's spouse and had no contact with either spouse in the same-sex relationship?
The Amended Bill recognises that the new terminology will not cater for family relationships that arise due to artificial conception techniques (which was a concern of the original Bill) or surrogacy arrangements and, accordingly, contains an additional legislative test in the definition of "child".
Since the introduction of the original Bill, the Government proposed amendments to the definition of "child of the de facto relationship", and to the parenting presumptions, in the FLA to allow children of same-sex relationships to be recognised as a child of the relationship for the purposes of the FLA.
For consistency, the Amended Bill introduces an additional legislative test into the SIS Act, so that the definition of "child" in the SIS Act references the amended definition of "child" in the FLA.
Under the Government amendments, a person would be a child within the meaning of the FLA if the child:
was 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
is a child of a person because of a court order to give effect to a surrogacy agreement.
Compared with the original Bill, the Amended Bill significantly simplifies the definition of "child".
One of the benefits is that superannuation trustees do not need to establish complex and detailed procedures to determine whether a person is the child of a member.
The original Bill did not amend all definitions in the SIS Act relating to family relationships; the definition "relative" in the SIS Act in particular was not changed. The Amended Bill rectifies this by introducing a specific tracing rule that allows a relative to be traced through the child-parent relationship.
The Bill proposed that the amendments would commence from 1 July 2008 and while this is still the case, the Amended Bill provides some transitional relief for the borrowing restriction in section 65, and the prohibition against acquiring assets from related parties in section 66 of the SIS Act arising from the change in definition of "relative".
That said, because the changes are not mandatory - that is, superannuation trustees are not required by the SIS Act to adopt the changes - the impact of the changes will depend on the drafting in the trust deed. Further, the trust deed must be amended in order to implement the changes, superannuation trustees should consider including transitional rules as part of any deed amendments.
In the end, the Amended Bill represents a significant steps towards simplicity, because many of the problems associated with the original Bill have now been resolved. However, there are still issues with the Amended Bill which trustees will need to carefully consider before taking any steps towards compliance with the new regime.
Nathan Hodge is Special Counsel at Minter Ellison.