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Saturday, 13 August 2005 |
Issues of Inequality: TAXATION
The issue: Treating all families the same for tax concessions
The Federal Government recognises that the burdens on families is large, and provides a number of tax incentives to families.
And while a lot of these families are two-parent families with a mum and dad, either married or living in a de facto relationship, there are a large number of single parent families and extended families. Increasingly there are also families headed by same-sex couples.
All these families face the same burdens, but the Federal Government only gives numerous tax breaks to heterosexual families. Same-sex families are completely ignored.
For a fair outcome for all families, Australia's laws should treat all families fairly under tax law.
The current laws: Tax breaks for heterosexual families only
Australia's taxation laws have various offsets and deductions to assist taxpayers in their individual and family situations.
Families get numerous tax offsets and benefits to help ease the financial burden of raising a family or having a dependent.
A dependent of an individual includes their spouse, which is defined as a heterosexual partner only. Other dependents include children under 16 or under 25 if a full-time student, the parents of the individual or their spouse, and an invalid sibling or child.
Because same-sex couples are not recognised as each other's spouse, it means that an individual cannot treat the children or parents of their same-sex partner as their dependents.
This means they are denied various taxation benefits and concessions that heterosexuals can utilise to help defray the costs of dependent partners, children, parents and family members.
How it's unequal: Same-sex couples suffer financially
Because same-sex couples are not recognised as each other's spouse, it means that an individual cannot treat the children or parents of their same-sex partner as their dependents. This means they are denied various taxation benefits and concessions that heterosexuals take for granted.
For example, an individual in a same-sex relationship cannot claim the newly proposed 30% Child Care tax rebate if they pay the child care costs relating to their partner's children.
The individual also cannot claim the Spouse's Parent tax offset for their same-sex partner's dependent parents are dependent on the individual – currently up to $1,414 per parent per year.
Neither can the individual claim their same-sex partner under the Dependent Spouse tax offset – worth up to $1,572 per year.
If an individual cares for an invalid child of their same-sex partner, they aren't able to claim the Invalid Relative tax offset – worth up to $708 per dependent invalid child.
And if the child of their same-sex partner keeps house, the individual is not eligible to claim for the Child-Housekeeper tax offset – worth up to $1,885 per year.
The price of inequality: Two families and their tax treatment
David and Mary are a de facto heterosexual family with two dependent children. The Federal Government considers them as a family with dependents under taxation law.
David is the breadwinner in the family, and Mary currently stays at home to look after their children. Mary is returning to work and will be using child care services, which David will be paying for.
In the past, David has been able to claim Mary as a dependent spouse, and receive a tax offset of $1,572 per year. When Mary returns to work, and David starts paying the childcare bills, he will be able to claim 30% of out of pocket expenses under the Howard Government's proposed Child Care tax rebate.
In comparison, Daniel and Josh are a same-sex family who have lived together 3 years, and Josh has two young children aged under 5 from a prior relationship. The Federal Government does not consider all four of them together as a family for taxation law.
Daniel is the breadwinner in their family. Josh stays at home with the young children – but like Mary, is considering returning to work. Daniel will be paying the child care costs of their children.
But because Josh is not recognised as Daniel's same-sex spouse, Daniel has been unable to claim the dependent spouse tax offset in the previous three years. This makes this family up to $1,572 worse off than David and Mary's family.
Similarly, Daniel will be unable to claim for the 30% of out of pocket expenses under the Howard Government's proposed Childcare Care tax rebate when paying for his family's child care costs.
Talking points: Speak out about unfair treatment of same-sex families
Same-sex families and couples need equal treatment for tax benefits and offsets to:
- treat all families equally, fairly and justly under tax law
- give the same taxation benefits to all families with dependent children
- recognise same-sex partners as spouses for determining dependency status
- recognise the parents and children of a same-sex partner as dependents
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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Taxation