Why some are more equal than others

Despite laws that ban discrimination based on race and sex, the rules that are applied in Australia depend on your marital status. At the Commonwealth level, inequities remain enshrined in legislation about property division, tax, superannuation and social security. Just how the rules apply usually depends on whether you have a marriage certificate. And it's de facto partners, gays and lesbians who can pay the highest price. Married couples When a partner dies with a will?
In Victoria, if a partner in any relationship - married or de facto, heterosexual or homosexual - dies with a valid will, then the estate is divided according to that person's wishes, says Melbourne wills and estates specialist David Owen, a senior partner with Frederick Owen and Associates. But anyone can contest a will.
And superannuation is not generally an asset of a deceased estate, Mr Owen says. The distribution of super death benefits is usually managed by a super fund trustee. When a partner dies without a will
If a married person dies without a will, the assets are usually divided between the surviving partner and any children, Mr Owen says. If there are children, the surviving partner receives all personal belongings and the first $100,000 in assets plus one-third of any amount above $100,000. The remaining two-thirds goes to the children. If there are no children, the surviving married partner gets everything. However this is not always the case when it comes to the family home. Family law specialist Wendy Sylva, a senior associate with Hall and Wilcox, says couples can own a home jointly or as tenants in common.

If the home is held jointly and one partner dies, irrespective of whether the couple are married, unmarried, lesbian or gay, the other share of the home passes to the surviving partner.

If the home is owned as tenants in common, a partner can leave their share of the home to whomever they choose in their will.

The best protection against nasty surprises, Ms Sylva says, is to know how the title to your family home is held. It is wise to check, particularly before getting married and before buying a property together.

"I don't think many people even think about it," she says. "The basic question people should ask themselves is: How do we own our property?"

If the property is owned by only one partner and they die, a surviving unmarried partner may not get the home even if they had lived with the deceased for a long time.

When a married couple break up
If a married couple split up in Victoria, the partners have access to the comparatively simple and cheap Family Law Act to divide assets.

A family lawyer with Maurice Blackburn Cashman, Lee Formica, says when a married couple separates, the Family Court uses two tests to work out how to divide property and assets.

The first test considers each partner's contribution to the relationship and takes into account the financial contribution as well as the child-rearing contribution. This effectively acknowledges retrospectively care of children over time.

The second test considers each partner's capacity for future earnings. In this case, a high-income-earning partner ordered to pay for the support of a former lower-income-earning spouse could expect to pay more.

Unmarried heterosexual couples

When a partner dies with a will
If a heterosexual unmarried person dies with a will in Victoria, the estate is divided according to that person's wishes. Once again, anyone can contest the will, but someone who can establish that they are financially dependent on the deceased will have a better chance of succeeding.

When a partner dies without a will
Until last November, if a heterosexual unmarried partner in a couple died without a will in Victoria, the survivor got nothing.

However, under the Statute Law Amendment (Relationships) Act 2001 and the Statute Law Further Amendment (Relationships) Act 2001, someone who has been a "domestic partner" (for at least two years) of a person who dies without a will is entitled to the same division of property as a spouse.

When a couple breaks up
De facto heterosexual couples who break up cannot use the Family Court, which can disadvantage unmarried women, Ms Formica says. When a Victorian de facto heterosexual couple separates, the division of property is dealt with under the Property Law Act. This act is administered by the Victorian Supreme Court and is "slow and expensive" compared to the Family Law Act, Mr Owen says.

The Property Law Act does not take into account the home-making role.

Mr Owen says the federal Family Law Act discriminates against homosexual and unmarried heterosexual couples. For example, Ms Formica says an unmarried woman usually comes off worse financially in a property settlement than a married woman whose case comes under the federal family law, even if their circumstances are similar.

"If you had one woman who came in (to a lawyer) with one set of facts and has a marriage certificate, and another who walks in with the same set of facts who is a 'domestic partner' without a marriage certificate, the one with the marriage certificate is better off - even if their circumstances are exactly the same," Ms Formica says.

"In my view, women generally are more prejudiced by the Property Law Act than if they are married and go to the Family Court."

The Property Law Act also has no provision for a spousal allowance while the Family Law does, she adds.

And the Family Law Act regards a pre-nuptial agreement of a married couple as binding, whereas the cohabitation agreement of a de facto couple is "persuasive but not binding", which can also have a negative impact on property division for de factos.

Unmarried homosexual couples

Although Victorian laws enacted last year redress discrimination against homosexuals in key financial areas at the state level, discrimination remains at a federal level - most notably in super and tax rules.

Same-sex partners, as well as unmarried heterosexual partners, benefit from changes to the Victorian rules that apply if a "domestic partner" dies without a will. Now homosexual couples and unmarried heterosexual couples have similar rights to married couples across a broad range of areas including state super, employment, stamp duty, asset division and being recognised as next of kin.

This means that if the live-in partner of a gay or lesbian person dies without a will, the surviving partner now has the same entitlements as the spouse of a married person who dies without a will.

When a partner dies with a will
The old Victorian Administration and Probate Act used to discriminate against gays even if they had a will, Mr Owen says, because only a married spouse or children could contest a will. This excluded gay and lesbian partners.

But in 1998 the state Probate Act was amended to allow same-sex partners of someone who had died to make claims on an estate, he says.

When a partner dies without a will
If a homosexual unmarried partner in a couple dies without a will in Victoria, the surviving partner has the same entitlements as a surviving spouse.

Since the Statute Law Amendment (Relationships) Act 2001 was introduced in Victoria last November, a "domestic partner" is automatically considered the next of kin if their gay or lesbian partner dies without a will.

A "domestic partner" is anyone - irrespective of gender - who has lived with their partner as a couple for at least two years, but is not married.

The term "domestic partner" replaces "de facto spouse" which, says gay rights activist and Victorian Equal Opportunity Commissioner Jamie Gardiner, had heterosexual connotations.

However, federal rules that affect super are still a sore point for lesbian and gay couples.

Super and insurance lawyer John Berrill, who is a Maurice Blackburn Cashman partner, says federal super laws make it harder for a same-sex partner to claim super death benefits if their partner dies.

First, federal super trustee rules mean a gay person has to prove financial dependency to be entitled to super death benefits. A heterosexual person does not.

Second, federal tax rules mean a surviving homosexual partner is taxed at a higher rate on super death benefits.

When the relationship breaks down
If a same-sex couple break up, as for a heterosexual de facto couple, the division of their assets is dealt with under the Property Law Act.

Federal Attorney-General Daryl Williams is pushing the states to allow the Family Court to hear property disputes between heterosexual de facto couples as well as married couples - but not same-sex couples.

In a standing committee of attorneys-general meeting in Melbourne last month, he sought to refer power from the states to the Commonwealth that would allow de facto couples to use the Family Court as well as married couples.

But the proposal does not include same-sex couples - a proposal that all the states unanimously reject, says Victorian Attorney-General Rob Hulls.

Mr Hulls says Victoria is happy to refer power to the Commonwealth on de facto couples as long as it refers to same-sex relationships as well.

But in the meeting Mr Williams refused.

Now the Victorian Government is preparing a paper for the next SCAG meeting in Perth in November, "so they (the Federal Government) have got four months to educate themselves about the real world and change a myopic 1950s attitude towards same-sex couples", Mr Hulls says.

"In a true democracy you can't discriminate on the basis of sexual orientation and that's what this (Federal) Government is doing in refusing to accept this reference."

For information or to make a complaint, call the Superannuation Complaints Tribunal on 1300 884 114, the Financial Services Industry Complaints Service on 1800 335 405, the Federal Human Rights and Equal Opportunity Commission complaints infoline on 1300 656 419, or the Equal Opportunity Commission in Victoria on 1800 134 142.

Gays and Super - a hot potato
Superannuation and insurance lawyer John Berrill says federal superannuation legislation is one of the last "bastions" of discrimination against lesbians and gays.

Mr Berrill, who is a partner with law firm Maurice Blackburn Cashman, says when a gay or lesbian person dies, any children and/or former heterosexual partners may be eligible for part of the deceased's super death benefits ahead of the surviving same-sex spouse, regardless of how long the couple has lived together. This is because the definition of super death benefit "dependants" does not recognise homosexual relationships.

Gays and lesbians have two main avenues for distributing death benefits to their living partner:

1. Through their will.
2. By establishing to the super fund trustee that their partner was financially dependent on them at the time of death.

A gay person can order in their will that super death benefits be paid to their estate.

But because of the way the term "spouse" is interpreted by federal tax laws, a homosexual partner is not eligible for the concessional tax rates. That means a super death benefit paid to a same-sex partner will be taxed at between 15 and 30 per cent up to the deceased person's reasonable benefit limit, and then at the highest marginal rate. However, a "spouse" or "dependant" can receive up to $1 million in super payouts tax-free.

Mr Berrill says if the surviving same-sex partner can prove financial dependence, a super fund's trustees must consider a gay partner "in the mix" of beneficiaries, who might also include any children and/or a former husband or wife.

"While heterosexual couples, married or de facto, are deemed to be dependent on a deceased, the same cannot be said for same-sex partners," Mr Berrill says.

To be defined as a dependant, a same-sex partner must establish that he or she was wholly or partly financially dependent upon a deceased fund member at the date of death.

Mr Berrill advises gays and lesbians to:

• Ensure the person you nominate to your super fund as "preferred super beneficiary" is current.
• Ask your super fund trustees whether the fund has a facility for "Binding Death Benefit Nominations". Not many funds do, but if yours does then take it up, Mr Birrell urges, because there is greater certainty that your partner will receive super death benefits.
• Ensure you have a current will.

  Australian Institute of Superannuation Trustees president Susan Ryan says homosexuals should write to their super fund trustees asking the trustee board to supply the Binding Death Benefit Nomination facility if the fund does not already have it.

  Ms Ryan says the institute expects to see more Binding Death Benefit Nominations available to super fund members over time.

  Mr Berrill says you can still direct a super fund to give benefits to a same-sex partner through your will, but be aware that there will be a "vicious tax slug".

  "The problem is many people let their will lapse. It's important to make sure your will remains up to date," he says.

  A will becomes even more important when non-biological children of same-sex partners are involved, Mr Berrill says.