Equality at a price as benefit payments slashed

Gay and lesbian couples who live together and receive tax credits or other forms of government financial assistance could see their income drop as a result of the new Civil Partnership Act, writes Maria Scott

The introduction tomorrow of civil partnerships, which will give same-sex couples the option to 'marry' for the first time, is to be accompanied by changes in tax credit and benefit entitlements for all gay couples who are living together as civil partners, whether registered or not. In future, for most benefits they will be treated as though living together as a couple. Usually this will mean lower payments. Unmarried heterosexual couples are already treated as married couples when assessed for tax credits or benefits.

Victoria Todd, an adviser for the Low Incomes Tax Reform Group (LITRG) says: 'In many cases, you will be worse off if you have to claim as a couple.'

Gay rights campaigners and welfare rights and tax advisers are concerned that 'unmarried' cohabiting gay couples will not realise their benefits may be reduced.

Alan Wardle, director of parliamentary affairs at campaign group Stonewall, says that while the new regime gives equality to gay couples, the implications for people on benefits and pensions may cause problems.

Wardle says there has not been enough government publicity and that some couples may be asked to repay overpaid benefits and tax credits. 'We need to give people time to plan their finances. We are calling on the government to treat gay and lesbian people with a degree of understanding.'

Couples claiming new benefits from tomorrow will automatically be assessed together, but those already claiming will be expected to notify the relevant benefit agency. The LITRG says the Department of Work and Pensions has indicated it does not intend to recover overpayments from before the point when people could reasonably be expected to have realised that the new rules applied. But there is no set definition of 'reasonable' and LITRG is urging couples to inform the government department as soon as possible.

The effects on some couples could be dramatic. LITRG says that where two people have been receiving the pension credit at the single rate, and where each member of the partnership is aged under 65, this will mean a loss of £51.85 a week. Where both have received income-based job seekers' allowance at the single rate of £56.20, the couple will lose £24.25 a week by moving to the couple rate of £88.15. If both have a disability and were claiming the allowance as individuals, each may have received the weekly disability premium of £23.95. Now they will receive this at the couple rate of £34.20, reducing household income by £37.95 a week.

And where one member of a partnership has a higher income than the other, and the poorer of the two has been able to claim benefits individually, the partner's income will now be included in the calculation and the less well-off person will lose their benefit. Entitlements to housing and council tax benefits could also be affected.

The Inland Revenue says it will shortly start a publicity campaign about the implications for people receiving tax credits, writing to individuals it thinks may be affected.

The Department for Work and Pensions says it has begun a targeted publicity campaign and that a 'very small number' of people are affected by the changes.

Robin Williamson, technical director of the LITRG warns that failure to notify the HM Revenue and Customs about a change in circumstances related to tax credits within three months could result in a £300 penalty.

www.stonewall.org.uk

www.litrg.org.uk