Separation pains in pension planning

If you want to make sure that you get a single pension after you break up with your partner, cooking in the garage is just not enough. You have to make sure love has left the building.

If you want to make sure that you get a single pension after you break up with your partner, cooking in the garage is just not enough. You have to make sure love has left the building. Picture: iStock

A 30 per cent income increase is not to be taken lightly: under the Australian pension system, anyone single gets roughly a third more than anyone in a couple.

It’s a compensation for couples who separate in later life and, looking at the measures people take to prove they are no longer united, it’s clear that that money is worth a lot of trouble.

But following a string of inconsistent decisions handed down by the rulers of our pension system, it’s not enough to separate – you have to go a lot further than that.

It turns out the Administrative Appeals Tribunal ideally wants to see some heartfelt hatred in addition to the miseries of separation if extra pension payments are to be approved.

Or as financial planner ­Michael Miller puts it – after reading the intriguing case of the Tanaskovskis – the tribunal has to be “comprehensively and credibly convinced there is no loving relationship involved”.

And that takes some doing.

It goes without saying many former couples who end up appealing to Centrelink for single pensions don’t have much money – we are talking about the difference between $882 per fortnight if you are single and $665 each for couples.

Most cases in this area do not cause problems since they involve the death of a partner. But in the vexed areas of separation the AAT makes its decisions on a range of grounds including fin­ancial aspects, the nature of the household and sexual relationships – although how that last item is policed by the tribunal ­remains a troubling mystery.

In any event, the whole issue has come to head this year in the very contrasting outcomes in two outwardly similar cases: the Tanaskovskis (who won) and the Philips (who lost).

In both cases there were elaborate efforts to ensure the couples no longer lived together in the conventional manner though they remained in the same accommodation. Indeed both Mr Tanaskovski and Mr Philips both went to the extremes of having cooking stoves in their respective garages. Mr Philip actually outlined how the couple did their own shopping and had their own fridges.

But the pension outcomes were totally different: Mr Philip was told that: “He had not been happy in his marriage but that did not however mean he ceased being a member of a couple.”

On the other hand Mr Tanaskovski – who remained the beneficiary of Mrs Tanaskovski’s will – was told his application would be successful and as a newly minted single in the eye of the tribunal he would be paid the higher single rate.

Mr Miller, an expert in dispute resolution, is baffled: He says: “The two cases appeared to be very similar, they both went to some lengths to show they lived separately: People in this situation will often continue to live in the same house because divorce is expensive and not everyone can afford separate resi­dential arrangements.”

So there you have it: If you want to make sure that you get a single pension after you break up with your partner, cooking in the garage is just not enough. You have to make sure love has left the building.

Originally published as Separation pains in pension planning