Lords fail to cure splitting headache

31st March 1995 at 01:00
Divorced women have won the right to a share of their ex-husband's pension, but the battle is not yet over. David Budge reports. Drama teacher Dawn Burnett is pressing ahead with her campaign for divorced women to be given a share of their former husbands' occupational pensions despite achieving a partial victory in the House of Lords.

Earlier this month peers passed an amendment to the Pensions Bill which would allow the courts to attach a deferred maintenance order to a pension scheme. As a result, when a divorced man retired the scheme's trustees would have to ensure that his ex-wife received an agreed share of his pension.

But this week Dawn Burnett, a teacher at the Harris C of E High School in Rugby, said: "We are saying to the Lords 'Thanks, but no thanks'. We don't like the idea of deferred maintenance. What we want is for pensions to be split at the time of the divorce. That would enable a clean break to be made."

The amended Bill will return to the Commons after the Easter recess and Fairshares, the group that Dawn Burnett set up in 1993, is urging its 500 members to ask their MPs to support the idea of giving women a lump sum to buy their own pensions when they divorce.

The Lords' amendment, though failing to meet Fairshares' objectives, represents substantial progress because there was no mention of divorced women's pensions rights when the Bill was introduced to the Commons. The Government later inserted an amendment that would have meant that men would have the responsibility for paying part of their occupational pension to their former wives. But Baroness Hollis (Labour), Baroness Seear (Liberal Democrat) and Baroness Young (Conservative) persuaded their fellow peers that responsibility for ensuring that divorced women received a pension should fall on the pension scheme itself.

The Lords' proposal has several disadvantages, however. If a divorced man died before retiring his former wife would get nothing. And even if he reached retirement the chances are that his ex-wife would face several years on the basic state pension for she would not be entitled to a widow's pension even though British women outlive men by about six years on average.

Moreover, if a man chose to carry on working beyond the official retirement age or deferred the purchase of an annuity his former wife would have to wait for her pension. The divorced woman could also suffer if her husband changed or lost his job.

The clean break option is therefore a far more attractive proposition to divorced women. The Government is, however, not so keen because there would be a considerable cost to the public purse even if it is not made retrospective. Two people with smaller pensions would pay less tax than one person with a larger pension.

Nevertheless, another Fairshares' spokeswoman, Sally Quinn, a former English as a foreign language teacher, does not believe this is a serious obstacle. "If there was sufficient willingness on the Government's part, ways could be found to overcome such problems. The tax point certainly isn't an obstacle as far as we are concerned because the Inland Revenue could carry on taxing as if the pension were going to one person and then the remainder could be split between the man and the woman."

Sally Quinn pointed out that Germany has had a clean break system since 1976.

"Allowing the women to have her rightful share of her husband's pension would give her a financial structure to build on," she said. "At present many of us are looking into a void. My daughter and I are living on income support and child benefit and I can't even afford to take my sick dog to a vet. But some of the Fairshares members are far worse off than I am. They are homeless."

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