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Superannuation |
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Saturday, 13 August 2005 |
Issues of Inequality: SUPERANNUATION
The issue: Everyone should have freedom over their superannuation
Australians have been encouraged for many decades to save for their retirement. This has resulted in the system of compulsory superannuation that currently operates in Australia.
Many super funds have a number of features, like in-built benefits when a member dies. It would seem fair that a member should be able to determine where their superannuation benefits are paid on their death.
Unfortunately, until recently for many gays and lesbians, they could not nominate their partner as a beneficiary for various superannuation entitlements and benefits.
The Federal Government introduced a ban on same-sex marriages in 2004. As a deal with other political parties to ensure the marriage ban legislation, the Howard Government agreed to expand its superannuation choice legislation to allow some fairness to gay and lesbian couples.
These changes have been requested for many years by the superannuation fund administrators, but consistently ignored by the Federal Government.
The current laws: Public servants don't have superannuation choice
For many years, superannuation fund managers have been requesting changes to the way superannuation laws work. One of these has included the vexed question of the superannuation of gays and lesbians.
The Federal Government has also proposed over many years legislation to provide greater freedom of choice for workers – including the ability for a worker to choose their superannuation fund rather than their employer.
In 2004, the Federal Government passed their Superannuation Legislation Amendment (Choice of Superannuation Funds) Act. This allowed same-sex couples to nominate their partner as an 'interdependant', thereby making them eligible to receive superannuation entitlements tax-free.
How it's unequal: Some same-sex couples are left out of the picture
A large number of gays and lesbians are now eligible to collect their partner’s superannuation without having to pay a massive 30 per cent tax.
But not all gays and lesbians were granted this fair treatment. Current and retired members of the Australian public service were ignored in the 2004 changes, because their super schemes require separate legislative changes.
The Federal Government is now dragging its feet, with a spokesman for Finance Minister Nick Minchin saying the situation was "under review".
Australia currently has more than 110,000 public servants – and tens of thousands more that are retired. Gay and lesbian public servants deserve to have the same fair treatment for their financial rights as married and de facto heterosexual couples.
The laws for private and public sector superannuation entitlements for same-sex couple should be made consistent.
The price of inequality: Two same-sex couples, one has no super choice
David and Jonathan are in a same-sex relationship. They both work in the private sector in their jobs. They both have superannuation funds and have recently exercised their right to pass their benefits to each other in the event of either one of them dying.
David and Jonathan are generally treated the same as heterosexual couples for superannuation.
The superannuation fund administrators are now obliged by law to recognise David's and Jonathan's superannuation choices. They are also now obliged to recognise the surviving partner as a family member for death benefit payouts.
In comparison, Amy and Leanne are also in a same-sex relationship. However, both Amy and Leanne work for the Australian Government as public servants.
Each of their government superannuation funds are governed by different laws in comparison to the private sector funds in which David and Jonathan are contributing.
Amy and Leanne want to nominate each other for their superannuation death benefits. If the administrators of the fund accept their nominations of beneficiaries, their superannuation benefits would be subjected to a 30% tax rate.
This inequality to same-sex families and couples who work in the public service is a burden which could see hundreds of thousands of dollars of superannuation benefits be lost – and may be the difference between a secure and insecure retirement outcome.
Talking points: Speak out about the unfair treatment of same-sex families
Same-sex families and couples who have a public servant within them need choice under superannuation laws to:
- treat all families equally, fairly and justly under super choice laws
- allow a superannuation fund member to choose who receives their super benefits
- stop unfair taxation of the superannuation of gays and lesbians in the public service
- give public servants the same superannuation conditions as private sector employees
What you can do: Ask the Federal Government to recognise same-sex couples
Same-sex families and couples face discrimination in many areas due to the lack of Federal recognition of their relationships and families.
There are a number of ways you can help undo this inequality for same-sex families and couples.
You can write letters to newspapers, ask to meet your local Federal MP, and tell friends and family about the issues.
Every individual can make a difference. For more information on what you can do to change Australia's laws to treat same-sex families and couples equally, visit our website at www.coalitionforequality.org.au
More information: About the Australian Coalition for Equality
The Australian Coalition for Equality aims to achieve equality for Australia’s gay, lesbian, bisexual, transgendered and intersex citizens and families – through campaigning, lobbying, networking and public awareness.
Our website at www.coalitionforequality.asn.au contains more fact sheets on various topics involving unequal aspects of Federal law.
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Superannuation