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Civil Partnerships and Benefits

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Civil partnerships - briefing note for unions

Second edition - September 2005


Introduction

Civil partnerships, which are due to be introduced in the near future, will have important implications for benefit rights. This is the second edition of a TUC briefing note produced to alert trades unionists to some of these issues.

Civil partnerships

The Civil Partnership Act 2004, will, when it comes into force on 5 December 2005, give same-sex couples many of the rights and benefits opposite-sex couples have already. Lesbian and gay couples who register as civil partners will have formal legal recognition of their relationships, and will have rights and duties to each other and to third parties and the state.

Civil partners must be:

  • Of the same sex,
  • Not in an existing civil partnership or marriage,
  • Old enough to marry (i.e. 18 without permission, 16 with permission in England and Wales; over 16 in Scotland),
  • Not 'within the prohibited degrees of relationship', as with marriage.

Civil partnerships will be introduced throughout the UK, and there will be a registration process, like civil marriage, and a dissolution process, similar to divorce. Civil partners will be treated like married partners for the purposes of tax, nationality and immigration, inheritance, liability for maintenance and child support, tenancies, employment and pension benefits and protection from domestic violence.

Benefits implications

At present the benefit system recognises opposite-sex relationships but does not recognise same-sex relationships. Lesbian and gay couples face a number of problems as a result, though there are also some advantages. Lesbians and gay men whose partners die are not eligible for bereavement benefits or survivors' pensions, and same-sex partners do not qualify for the adult dependant increases paid in National Insurance benefits such as Retirement Pension and Incapacity Benefit.

The regulations relating to means-tested benefits assume that opposite-sex couples have a duty to maintain each other, but do not make the same assumption about same-sex couples. When someone who is married (or living with someone as if they were married) applies for a means-tested benefit the means test will take into account the needs and the resources of both partners. Currently, partners in a same-sex couple are assessed separately, and a same-sex partner's income and other resources will not be taken into account in working out how much benefit a claimant is entitled to.

When civil partnerships are implemented in December there will be changes to these rules. The most important changes will be to pensions. [1] Civil partners will be entitled to a survivor's pension from their partner's contracted-out, public service pension scheme or non-contracted out scheme which currently pays survivor benefits to widows and widowers. This will include contracted-out schemes, with rights accrued on the basis of service since 1988 - the same basis as currently applies to widowers. Spouses' pensions and death in service lump sums should be paid on an equal basis.

From 5 December 2005 civil partners will have most of the same state pension rights as husbands and they will be treated the same as husbands and wives after 2010, when the treatment of men and women is to be equalised. The courts will have the same pension sharing powers when dissolving a civil partnership as they currently have following divorce and annulment.

Civil partners will become eligible for the adult dependant allowances that can top-up non-means-tested benefits, [2] and for bereavement benefits. [3]

Civil partners will be treated in the same way as married partners for Child Support Act purposes.

Tax credit implications

Opposite-sex couples are required to make a joint claim to receive Child and Working Tax Credits, reporting each partner's personal circumstances (including details of their jobs and children) and their combined income.

Members of same-sex couples are currently required to claim tax credits separately, based on their individual circumstances and income. After April 2006 civil partners and couples living together as civil partners will have to make their annual tax credit claim as a couple. Some will gain, by becoming eligible for the couple element of Working Tax Credit, others will lose, as their entitlement will now be assessed on the basis of two incomes.

Between December 2005 and April 2006 couples will be expected to notify HM Revenue and Customs (HMRC). They must then submit a joint claim, and will receive a joint award for the rest of the tax year. The latest issue of HMRC's Tax Credits Update (sent to all claimants) takes a tough line on claimants' responsibilities: 'if you are claiming tax credits as a single person but are living with a same sex partner as a couple, or you start living with a same sex partner as a couple sometime after that date, you MUST by law report your circumstances to HM Revenue & Customs. The longer you leave it to tell us, the longer you may be receiving more than you are entitled to. And if you don't tell us within 3 months, you will not only have to pay back the overpayment but may also have to pay a penalty.' [4]

The penalty for failing to inform HMRC is £300, but the TUC understands that this will not be applied when claimants have a 'reasonable excuse' for failing to do so. It is still not entirely clear whether overpayments will have to be returned when couples have a reasonable excuse.

Housing Benefit and Council Tax Benefit implications

DWP advice to local authorities on Housing Benefit and Council Tax Benefit is that:

  • 'there is no question of LAs being expected to identify all affected couples and implement the new rules from 5 December. The approach will be gradual, and the forthcoming circular will make this clear.
  • 'for DWP administered benefits, the new rules will be applied to existing cases from the first intervention on or after 5 December 2005. By intervention, we mean anything which responds to a relevant change reported by the claimant, which results in us having to intervene in the case. In general, we are likely to accept this as reasonable unless there are specific reason(s) to the contrary
  • 'DWP will be issuing guidance to its decision makers about the 'reasonableness' requirement. We will adapt this guidance for you as soon as it is available and we hope to include it in the circular
  • 'for existing cases at 5 December 2005, in which HB/CTB is in payment on the strength of a 'passporting' benefit (IS, JSA(IB) or Pension Credit guarantee credit) you should apply the new Civil Partnership rules from the date that The Pensions Service/Jobcentre Plus applies them to the passporting benefit. This will generally avoid any HB/CTB overpayment being raised
  • 'for existing cases at 5 December 2005, not involving a 'passporting' benefit, you should apply the new Civil Partnership rules from the date they become aware of a case, either because of
  • 'the claimant reporting a change of circumstances
  • 'an intervention by the LA under the current reviews procedure'

(Taken from Housing Benefit Direct, August 2005 - DWP's newsletter for local authority staff working on HB/CTB.)

Implications for other benefits

Civil partners will be treated in the same way as married couples in calculating entitlement to means-tested benefits. This means that the rules about 'living together as husband and wife' will be applied to couples 'living together as civil partners'. Here are some illustrations of what this will mean:

  • Unemployed people with employed same-sex partners, who have received income-related JSA, will now find that their partners' incomes affect their entitlement. They may lose some or all of their JSA as a result (if they receive contribution-based JSA they will not lose their entitlement).
  • Same-sex couples who both receive the full single-person rate of a means-tested benefit will now receive the couple rate of personal allowance, instead of two sets of the single rate. For a couple aged 25 or over who have received IS or income-related JSA this would mean a cut of £24.25 per week.
  • Same sex couples that have both received the disability or enhanced disability premium will now receive the couple rate, instead of two sets of the single rate.

After 5 December, joint assessment will apply to new claimants from the start of their claim. For existing claimants the new rules will also apply from 5 December, without any transitional protection, but the DWP has said that it does not intend to claw back overpayments dating from before the point at which people could reasonably [5] be expected to realise that these rules now apply to them.

Claimants will, however, be expected to report that they are part of a couple as soon as possible, and at the latest by their first benefit review after the implementation date. [6] The Department of Trade and Industry has developed an information strategy targeted at people who will be affected by the implementation of the Civil Partnership Act. The Department for Work and Pensions has developed a communications strategy targeted at customers who will be affected whether or not they choose to form a civil partnership.

When are a couple living together for benefit purposes?

The rules on living together are complex, and the DWP Decision Makers Guide (which sets out the current rules on living together as husband and wife) is in the process of being updated to incorporate civil partnerships.

This guidance says that, for two people to be considered to be living together as husband and wife or civil partners they must be members of the same household. This means that they both normally live in the same accommodation and that neither normally lives elsewhere, although either may be absent from the home for reasons such as work or visiting relatives. [7] It follows that if two people who consider that they are a couple do not live together they are likely to be treated as single people for benefit purposes.

The DWP guidance says that decisions should be based on the facts of an individual case but that there are factors that can be taken into consideration when deciding whether or not two people are living together as a couple:

  • The over-arching consideration is 'whether the whole relationship, of an unmarried couple living together, is that of a couple' living together as husband and wife.
  • Do the couple live in the same household?
  • Do they have a sexual relationship? Jobcentre Plus decision makers are advised that they 'should not ask the claimant about the sexual nature of their relationship. However the [decision maker] can consider any information volunteered.'
  • What are their financial arrangements? Does one support the other? Are their finances pooled?
  • Is their relationship stable?
  • Do they have children?
  • How do they appear in public? Are they accepted as husband and wife in their business and private lives?

Acknowledgement

The TUC is very pleased to acknowledge the advice and assistance it has received from the DWP's Civil Partnership Division in producing this leaflet.

Notes

[1] What follows is general, the details will appear in regulations, since they are not on the face of the Act.

[2] Carer's Allowance, Incapacity Benefit, Maternity Allowance and Retirement Pension.

[3] Bereavement Payment, Widowed Parent's Allowance and Bereavement Allowance

[4] Op cit, p 5, available at http://www.hmrc.gov.uk/taxcredits/taxcreditsupdate.pdf

[5] What is reasonable will depend upon the circumstances of the individual case. Fraud will never be reasonable.

[6] Benefits are awarded indefinitely, but claimants are required to attend periodic reviews, to check whether a change of circumstances has affected their entitlement.

Income Support and means-tested Jobseeker's Allowance are normally reviewed every three years, but working age claimants will also be called in for work-focused interviews at shorter intervals, when they may well be told about the new rules and, if the rules apply to them, be required to report the fact.

Housing Benefit awards are reviewed every six months for working age claimants, every three years for pensioners.

Pension Credit is normally reviewed every 5 years, though the annual notification of uprating also includes a request for changes of circumstances to be reported.

[7] If both the members of a couple own and rent a property they may, however, be considered to be members of the same household if the other accommodation is seldom used.

W:\Esad\Richard\Social Security\Welfare Reform Series\One-Offs\2005\Civil Partnerships\Second edition\Civil Partnerships second edition

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