Equal marriage isn't totally equal when it comes to pensions

A hang-over from civil partnerships keeps same-sex couples different in the eyes of the law.

Moneybox's Paul Lewis points out on Twitter an interesting quirk of the Marriage (Same-Sex Couples) Bill: when it comes to pensions, it's not entirely equal.

Paragraph 123 of the explanatory notes reads:

Paragraph 18 of Schedule 9 to the Equality Act 2010 provides that it is not discrimination because of sexual orientation to restrict access to a benefit, facility or service that would be available to a person who was married, to someone who is in a civil partnership in relation to rights accrued before 5 December 2005 (the date the Civil Partnership Act came into force). This means that an occupational pension scheme as a minimum only has to provide survivor benefits to civil partners on rights accrued since that date. Paragraph 15 removes the word married from sub-paragraph (1) and inserts a new sub-paragraph (1A) in paragraph 18 of Schedule 9 to the Equality Act 2010. This extends the exception so that it also applies to same sex couples in the same way as to civil partners.

That is: if you are married to someone of the same sex, your marriage is qualitatively different in at least one (potentially very important) way. Any pension benefits accrued before 5 December 2005 are allowed to continue to ignore same-sex marriages.

The reasoning behind the rule is obvious. When pension funds were estimating the costs of providing couples' benefits, a small but significant part of the estimation will have been based on the fact that any gay members of the pension plan would never be able to claim those benefits. When civil partnerships were introduced, it was decided it would be more trouble than it was worth to force those funds to treat civil partnerships as marriages; and now, since the Marriage (Same-Sex Couples) Bill is essentially just a provision for changing the name of civil partnerships, the same rule is being carried over.

It's important to note that the rules are just the minimum, so most pension funds will presumably do the right thing and cover married couples equally regardless of gender. And obviously eventually the difference will be moot. But the desire to take the easy way out may end up hurting a few couples just when they're at their most vulnerable. Hopefully an amendment will change this rule and restore equality to equal marriages.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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George Osborne's mistakes are coming back to haunt him

George Osborne's next budget may be a zombie one, warns Chris Leslie.

Spending Reviews are supposed to set a strategic, stable course for at least a three year period. But just three months since the Chancellor claimed he no longer needed to cut as far or as fast this Parliament, his over-optimistic reliance on bullish forecasts looks misplaced.

There is a real risk that the Budget on March 16 will be a ‘zombie’ Budget, with the spectre of cuts everyone thought had been avoided rearing their ugly head again, unwelcome for both the public and for the Chancellor’s own ambitions.

In November George Osborne relied heavily on a surprise £27billion windfall from statistical reclassifications and forecasting optimism to bury expected police cuts and politically disastrous cuts to tax credits. We were assured these issues had been laid to rest.

But the Chancellor’s swagger may have been premature. Those higher income tax receipts he was banking on? It turns out wage growth may not be so buoyant, according to last week’s Bank of England Inflation Report. The Institute for Fiscal Studies suggest the outlook for earnings growth will be revised down taking £5billion from revenues.

Improved capital gains tax receipts? Falling equity markets and sluggish housing sales may depress CGT and stamp duties. And the oil price shock could hit revenues from North Sea production.

Back in November, the OBR revised up revenues by an astonishing £50billion+ over this Parliament. This now looks a little over-optimistic.

But never let it be said that George Osborne misses an opportunity to scramble out of political danger. He immediately cashed in those higher projected receipts, but in doing so he’s landed himself with very little wriggle room for the forthcoming Budget.

Borrowing is just not falling as fast as forecast. The £78billion deficit should have been cut by £20billion by now but it’s down by just £11billion. So what? Well this is a Chancellor who has given a cast iron guarantee to deliver a surplus by 2019-20. So he cannot afford to turn a blind eye.

All this points towards a Chancellor forced to revisit cuts he thought he wouldn’t need to make. A zombie Budget where unpopular reductions to public services are still very much alive, even though they were supposed to be history. More aggressive cuts, stealthy tax rises, pension changes designed to benefit the Treasury more than the public – all of these are on the cards. 

Is this the Chancellor’s misfortune or was he chancing his luck? As the IFS pointed out at the time, there was only really a 50/50 chance these revenue windfalls were built on solid ground. With growth and productivity still lagging, gloomier market expectations, exports sluggish and both construction and manufacturing barely contributing to additional expansion, it looks as though the Chancellor was just too optimistic, or perhaps too desperate for a short-term political solution. It wouldn’t be the first time that George Osborne has prioritised his own political interests.

There’s no short cut here. Productivity-enhancing public services and infrastructure could and should have been front and centre in that Spending Review. Rebalancing the economy should also have been a feature of new policy in that Autumn Statement, but instead the Chancellor banked on forecast revisions and growth too reliant on the service sector alone. Infrastructure decisions are delayed for short-term politicking. Uncertainty about our EU membership holds back business investment. And while we ought to have a consensus about eradicating the deficit, the excessive rigidity of the Chancellor’s fiscal charter bears down on much-needed capital investment.

So for those who thought that extreme cuts to services, a harsh approach to in-work benefits or punitive tax rises might be a thing of the past, beware the Chancellor whose hubris may force him to revive them after all. 

Chris Leslie is chair of Labour's backbench Treasury committee.