Some readers may be aware of the complications involving superannuation death benefit payments in Australia. Superannuation is governed by the Commonwealth as compared with normal estate law which is a State governed law. Furthermore the Trust Deeds often contradict the Law!

The majority of Superannuation benefits are made up of an insured component and the actual balance of funds the member had invested. Normally with young members the balance is minimal and not likely to give rise to any dispute in the claiming process. However, the insured death benefit can be considerable and the process of determining who is entitled is quite complex.

Essentially the dependent spouse and children would normally be paid the benefit but in the case of a young single person the only family they may have will be their parents. A recent case reported in the Quarterly bulletin of the Superannuation Complaints Tribunal highlighted the complexities involving a young deceased person whose parents were divorced.

The deceased died without a Will and had nominated his mother as the beneficiary of his superannuation benefit, but it was not made as a Binding nomination. The Trustee had determined that the mother was in an interdependency relationship with her son and that the same sort of relationship did not in fact exist with the father. The amount of the claim was just shy of $80,000.00. The father objected and claimed one half of the benefit.

The Tribunal agreed generally on the key elements of an interdependent relationship, i.e. that the mother had a close personal relationship with her son, that whilst he did spend some time with his father he lived with his mother, that the mother provided financial support to the son and also she provided domestic support and personal care.

However the regulations also found that as the relationship was between and parent and child many of the factors were irrelevant or inapplicable, for example that there was no intention that the interdependency relationship would be permanent. The Tribunal found therefore that both the father and mother has a close personal relationship with the son however none was in an interdependency relationship with him, under the trust deed the benefit could be paid to “any other person determined by the Trustee”. The Tribunal set aside the Trustee’s earlier decision and awarded half of the benefit to the father and mother equally.

With the nature of many family relationships now varied and complex these cases are becoming more prominent. Members of funds need to carefully consider who should be obtaining their benefits and make binding nominations where available.

Stamp Duty – The End WAS Near.

In the last issue of ENVOY I trumpeted the end of stamp duty on off market share and unit transfers where the company was not a listed entity.  Sadly the NSW government has basically gone broke and in an about face mini-budget late last year deferred the abolishment of the stamp duty for another three years! Roll on 1 January 2012.

PUBLICATION: ENVOY – The newsletter of The New Zealand Institute of Legal Executives
DATE: June 2009
AUTHOR: Andrew Johnstone, APEARS, Sydney, Australia

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