Q: I am living in a de facto relationship and want to know what status I have in the superannuation system if a death benefit arises.
A: The Superannuation Complaints Tribunal reports that its single biggest complaints category is the distribution of death benefits. More than 20 per cent of the complaints received in the March quarter this year were in that category.
The Tribunal is working to improve processes in this area. It says complaints indicate that people are not familiar with the way superannuation funds handle death benefits.
“It is often not well understood that superannuation does not automatically form part of a deceased member’s estate,” it says.
The SCT wants super fund trustees to improve their communication with potential beneficiaries.
One of the areas that gives rise to confusion and dispute is the status of de facto partners.
In one recent case, the deceased fund member died in a motorcycle accident. He had not nominated any beneficiaries and died intestate.
The super fund trustee identified seven possible beneficiaries: the “claimed spouse”; the deceased member’s three children; and the three children of the claimed spouse.
The children of the claimed spouse notified the trustee that they did not intend to make a claim for death benefits.
The trustee decided to pay the entire death benefit to the claimed spouse on the basis that she was in a de facto relationship with the deceased member and was his financial dependant.
The three children of the deceased member each brought a complaint to the Tribunal, stating that they were dependant on the deceased member and that no spouse-like relationship existed between the deceased member and the claimed spouse.
They submitted that the claimed spouse maintained a separate address and there was no evidence that she cohabited with the deceased member.
The claimed spouse advised that she lived with the deceased member and maintained the separate address for use by her daughter, who confirmed that she lived in the house without the claimed spouse.
The claimed spouse was injured in the same accident that caused the death of the deceased member and was hospitalised for several months. She claimed that evidence of her cohabitation was removed from the house while she was in hospital.
And she provided statutory declarations from friends and neighbours to support the spouse-like relationship.
The Tribunal was satisfied that the claimed spouse was a spouse under the trust deed, living with the deceased member on a bona fide domestic basis. It affirmed the decision of the trustee.