Government rejects requests for cohabitation law reform in England and Wales
About 3.6 million couples are now living together as cohabitants in the UK, representing around 1 in 5 couples living together. This gradual move has led some organisations, including STEP, to call for reforms to the law that would provide unmarried cohabitants and their children with more financial recourse if the relationship ends. There are already some such provisions in Scottish law, but few in the law of England and Wales.
In August 2022, the cross-party House of Commons Women and Equalities Committee produced a report recommending reforms that in certain cases would give cohabiting persons in England and Wales some intestacy and family provision claims on their former partners' financial assets, similar to those granted by marriage or civil partnership, unless they opt out. The committee also asked the government to publish clear guidelines on how pension schemes should treat surviving cohabitants when claiming a survivor's pension.
However, the government's response to the committee report rejects most of these suggestions, noting that ‘existing work on the law of marriage and divorce must conclude before it could consider changes to the law about the rights of cohabitants’. It said it has no plans to extend the inheritance tax (IHT) treatment of spouses and civil partners to cohabiting partners, but would keep it under review.
In its response, the Ministry of Justice (MOJ) explicitly rejected the committee's proposal for an opt-out cohabitation scheme to deal with the financial consequences of relationship breakdown, as was proposed by the Law Commission of England and Wales (the Law Commission) in 2007. It noted that it is already conducting a review on financial provision for divorce and cannot deal with cohabitation until that review has reached its conclusions and made its recommendations. 'This is because any new legal rights and obligations afforded to cohabitants would necessarily need to be considered against a baseline of rights afforded to married parties or civil partners on divorce or dissolution', it said. Moreover, it said, the Law Commission's report is now 15 years old and pre-dates the introduction of civil partnerships for both opposite- and same-sex couples.
The MOJ also rejected an immediate introduction of reforms concerning intestacy and family provision claims for cohabiting partners. It commented that the reform recommended by the MPs would have the effect of promoting the interests of cohabitants over family members of the deceased, potentially including their children. 'The government intends to take a cautious approach in this area and would want to consult ahead of pursuing any reforms', it said. In the meantime, it pointed out that individuals are free to set their affairs in order in a way that ensures provision is made for a cohabiting partner. Even if they do not do so, cohabitants are also already able to make family provision claims where a person dies intestate if they have been living in the same household as the deceased person and on the same basis as a spouse or civil partner for a two-year period prior to their death.
The suggestion that the IHT regime should be amended to be the same for cohabiting partners as it currently is for married couples and civil partners was also rejected. However, the government accepted the suggestion that there should be clearer guidelines on how pension schemes should treat surviving cohabiting partners, although it emphasised that scheme trustees or managers would remain responsible for determining who is entitled to inheritance rights.
'STEP is very disappointed that the government has rejected calls to reform legal protections for cohabiting partners', commented STEP Technical Counsel and Head of Government Affairs Emily Deane TEP. 'In particular, we believe it is important that cohabitants have rights under the intestacy rules…The existing lack of legal protections can leave bereaved cohabitants financially vulnerable during very difficult circumstances.'
Deane added that there are recognised challenges to implementing legal protections for cohabitants, such as the need to agree a legal definition of cohabitation in order to provide objective criteria on what constitutes a cohabiting relationship. 'While this may be difficult to define, we believe that efforts should be made to do so', she said. 'This issue is only going to increase in importance...We will continue to pursue reform and ask the government to revisit this important issue.'
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