A refusal to consider placing an Aboriginal baby in the care of an aunt because she was in a same-sex relationship has prompted calls for legal reform.
Adoption agency Anglicare Sydney did not assess the child's maternal aunt despite her mother's wishes to have the baby under the long-term care of an Aboriginal family member.
The nine-month-old, known only to the court by the pseudonym Daisy, was voluntarily discharged to the agency at four days old and placed with a non-Indigenous couple in April 2023.
Her mother, known by the pseudonym Paula, filed an affidavit in September requesting her cousin be considered as her daughter's long-term carer, a court decision published in late January showed.
But the Department of Communities and Justice filed a care plan recommending the baby be adopted and remain placed with her Anglicare carers.
It did not tell the court it was aware other family members had applied to be carers.
The same day, a departmental caseworker filed an affidavit in which she claimed Anglicare did not assess the cousin and would not assess an aunt because she was in a same-sex relationship.
"Anglicare (staff) emailed me to advise that Anglicare were not able to contact (the cousin) to discuss whether she was interested in being assessed as a relative carer for Daisy," the caseworker said.
"They also advised that Anglicare are not able to proceed with (Daisy’s maternal aunt) and her partner’s application to be a relative carer as per the agency’s policy on same-sex couples."
NSW child-protection laws stipulate a minor is to be placed with a member of their extended family or "kinship group" unless it is not practical or in their best interests to do so.
Children's Court magistrate Tracy Sheedy said she was “alarmed and confounded” this had not occurred in the case of Daisy.
“Instead ... Anglicare were making decisions in accordance with its own policy to refuse to assess same-sex couples to be carers," she said.
Ms Sheedy added it was "incredibly disturbing" orders could have been made that "would have robbed baby Daisy of the opportunity of being raised within her Aboriginal family".
Equality Australia on Tuesday said the case was another example of discrimination being put before the interests of a child.
“We cannot have a situation where the laws in NSW allow the lives and wellbeing of children to be jeopardised by the outdated prejudice of a faith-based service provider,” legal director Ghassan Kassisieh said.
The Public Interest Advocacy Centre called for the NSW Anti-Discrimination Act - which allows for exceptions in religious-based foster care - to be overhauled.
"The fact that, in 2024, religious adoption and foster care services have special legal privileges to discriminate against same-sex couples is a shameful reminder of the urgent need for reform," policy and advocacy director Alastair Lawrie said.
Anglicare Sydney said it believed the interests of the child were best served by giving access to "both mothering and fathering, wherever possible".
The matter returns to court for further submissions in March.
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