The British government is moving to address some of the inequalities and injustices affecting same-sex married couples with regards to pensions and superannuation. Some difficulties also remain for Australian same-sex couples.
British equal marriage laws do not equalise the law on pensions. Same-sex widows and widowers don’t get the same survivor pension benefits as heterosexual spouses – something we shall have to watch out for when we get the right to marry in Australia. There’s a loophole in the UK Equality Act 2010 which lets private occupational pension schemes ignore years of contributions by gay employees. Pink News reports:
Currently, a wife whose 60 year old husband died today after five years of marriage would be entitled to a survivor pension calculated from the date at which the husband started paying into his pot. If a 60 year old civil partner died today after five years in a civil partnership, the surviving partner would only be entitled to a survivor pension calculated from 5 December 2005.
The superannuation industry is strongly opposed to treating same-sex couples equally because of the cost. Conservative MP Mike Freer laid out the case for reform in the House of Commons: it’s worth quoting him at length.
“The key point is that for a man or woman in . a traditional marriage, the pension rights in the event of the partner’s death go back to the date the pension scheme was joined. If, however, someone is a surviving civil partner, even though the partner might have been in the scheme for 20 years, the pension rights go back only to the date when civil partnerships became law. . . In the example of John Walker, his civil partner would get a surviving pension of £500 a year. If the civil partnership were dissolved and he married a woman, she would be entitled to £41,000 a year in the form of a widow’s pension. That discrimination is simply not defensible.”
“The important message to remember is that although survivor benefits are currently unequal, contribution rates are not. Two men—one straight, one gay—both pay in at the same contribution rate. If their contribution rate is not determined by their sexuality, why should their pension be?”
I assume such gross inequity that does not apply in Australia (if you know different, tell me about it), but there are still problems that need to be addressed.
The last major national changes to the rights of same-sex couples in Australia are now five years old. Back in 2008 the then federal government changed 85 laws to recognise same sex couples on the same basis as heterosexual de facto couples.
Couples, including aged pensioners, who had previously been able to claim Centrelink benefits as two single persons were moved to the lower couple rate. Sometimes, where one partner was earning and the other claiming, the non-working partners lost all benefit, and were forced into dependency on their partners. In some instances, this forced the end of the relationships.
When reforms with a similar impact on claimants were enacted previously, e.g., changes to widows pensions, existing arrangements were “grandfathered”. That would have allowed those currently claiming as singles to continue to do so: only new claims would take into account the recognition of same-sex relationships.
Politicians insisted that if we wanted the benefits of equality, we must also wear the losses. Those losses were imposed on the most vulnerable members of our community.
Changes were also made to superannuation. According to the Gay and Lesbian Rights Lobby
These changes ensure that Commonwealth superannuation funds treat same-sex couples and their children equally in superannuation benefits, including death benefits and pensions. Private superannuation funds will also be able to recognise a same-sex de facto partner who is nominated as a beneficiary in the same way as an opposite-sex partner.
Or as the Attorney General’s website puts it :”These reforms allow private sector superannuation trustees to make same-sex couples and their children eligible for reversionary benefits.”
That all sounds very good, but there’s a problem with that word “allow”. It should really have read “compel.” Around 15% of superannuation funds have still not amended their Deeds to recognise same-sex de facto partners alongside (opposite sex) de facto spouses.
The law also “allows” the trustees – not you – to decide where your money will go when you die. To be fair, this is true for everyone, but it can cause particular problems for same-sex couples that are not faced by heterosexual husbands and wives.
To try to direct your money where you want it to go, e.g., to your partner rather than your blood relatives or your ex-husband/wife, you must nominate a beneficiary.
Trustees can ignore a non-binding nomination, treating it merely as a recommendation. The only sure way is to make a binding nomination.
This lasts a mere three years. After which you have to renew it, or control reverts to the trustees. The fund will not write to remind you to renew it, so if you forget, too bad. Your ex-wife cops the lot. Oh, and since these are legal documents, requiring two witnesses, you have to pay for them.
To be fair, heterosexuals have to jump through the same hoops. But there have been some problems for gay couples.
I have heard of one case where a fund which says it recognises same-sex de factos claimed that a same-sex couple couldn’t make a binding nomination. Fortunately, the court disagreed with them, but it ought not to have required the trouble and expense of legal action.
Your treatment at the hands of your fund entirely depends on the trustees, the individual fund, and its specific policies. Nothing can be taken for granted, no matter what their sunny brochures and commission-hungry salesmen say.
One more thing. To make doubly sure your money goes where you, and not the trustees, decide, it’s very important to specifically include your super in your will. That way there is no doubt of your intentions.
Have you had problems with your super fund? Love to hear from you.