I recently wrote about the discrimination in the UK against same sex spouses, which some MPs are campaigning to correct. In the UK, a wife whose 60 year old husband died today after five years of marriage would be entitled to benefits based on all the husband’s contributions to the fund. A surviving same sex partner in the same situation would only get benefits based on the contributions made by their partner since 5 December 2005, when civil partnerships became legal.
I asked a large number of super funds and other interested parties if the situation was different in Australia. Now the answers have started to come back, and while we don’t have that particular inequality here, I’m not liking what I’m hearing.
The Association of Superannuation Funds of Australia Limited (ASFA) is the peak policy, research and advocacy body for Australia’s superannuation industry. Their Director of Research Ross Clare tells me that in Australia, there is no distinction in entitlement as described in the UK.
No recognition means no guarantees
But the situation is far from simple. In Australia, because there are no civil partnership provisions in the law, and because we can’t get married, a same-sex partner isn’t automatically guaranteed to receive benefits when their partner dies.
Ross writes that same sex partners can be included as eligible reversionary beneficiaries in private pension schemes. But we have to pass certain tests:
“The tests for de facto spouses are the same for both same sex and opposite sex partners.
“Trustees of a fund will rely on a range of evidence, including
- nomination of beneficiary by the member,
- statutory declarations from the de facto partner,
- documentary evidence as to finance and residences,
- statements from friends and relatives etc.
“It is a finding of fact in each case and if a claimant is not satisfied with the decision of the trustee of the fund they can ask the Superannuation Complaints Tribunal to review the decision.
And there’s the first problem. We’re not treated as married spouses, because we can’t marry in Australia, or even enter into a nationally-recognised civil partnership, and our overseas marriages and unions go unrecognised here.
So we are lumped in with opposite sex de factos, who choose that status. We have no choice. That’s wrong.
The laws say they can, not that they must
This leads to the second problem because, while the Australian legislation enables funds to pay reversionary benefits to same sex partners, it does not require them to do so.
These are major flaws in the system, in my opinion. In the absence of equal marriage, we should not be equated with hetero de factos, but with married husbands and wives. As a minimum, superannuation funds should be required by law to recognise state-based civil partnerships and overseas same-sex marriages as equal to Australian marriages.
Ross goes on to say:
However, we understand that the bulk of defined benefit schemes, including the major Commonwealth and State public sector defined benefit schemes, now pay such benefits. Only 10% or so of current employees are in defined benefit schemes in Australia.
In the case of defined contribution schemes, all benefits are lump sum regardless of who is the beneficiary. As well as through the spouse provisions, there are provisions which permit an individual to establish they were an inter-dependant with the deceased. If that is established they are treated like any other dependant, typically spouses or financial dependants. However, the evidentiary provisions for inter-dependents are complicated.
In other words, thanks to the denial of marriage rights, we are once again forced to jump through hoops to gain our proper entitlements. It’s not as if we are in a de facto status by choice, unlike heterosexual de factos. Therefore the proper equality the law should recognise is with married spouses, not opposite sex de facto partners.
Next, I will post the responses from a range of different superannuation providers and the regulator, the Australian Prudential Regulation Authority, as I receive them. Click on the links below.
Response from APRA (the regulatory authority)
Response from Australian Super