Saturday, 24 May 2008

Case: Superannuation Complaints Tribunal: dependants #2

A recent decision of the Superannaution Complaints Tribunal highlights, yet again, the need to get on with resolving property settlement between separated couples quickly.

The Complainant, the wife of the Deceased Member, complained that the decision of the Trustee to pay 20% to her as a non-financial dependant and 80% to the mother of the Deceased Member as a financial dependant, was unfair and unreasonable. She sought 100% of the benefit as the legal personal representative of the Deceased Member. The Deceased Member worked overseas for substantial periods of time. After some 25 years of marriage, and just over a year before he died, the Deceased Member and his wife, the Complainant, separated. After this separation in May 2004, the Deceased Member moved to live with his mother during the periods he was in Australia, said to be roughly 50% of the time. He died in July 2005, the day before divorce proceedings were due to commence.

The Deceased Member also had a girlfriend/fiancé ('the Friend'), who advised the Tribunal that she and the Complainant worked together overseas, and, from mid 2003, were in a committed, loving, personal relationship and had planned to marry in September 2005. The Deceased Member had in 1998 nominated his wife as the beneficiary of his superannuation benefit but changed the nomination in June 2005 in favour of his brother (the Brother).

His will, executed in 1999, named his wife as his Executor and sole beneficiary. The amount of the benefit was considerable – over $1.2 million.

The Complainant argued that she had contributed to the Deceased Member's superannuation during their long marriage; that the Deceased Member had named her as his Executor and sole beneficiary in his will (made in 1999); and that neither the mother nor the Friend were financially dependent upon the Deceased Member or in an interdependency relationship with him.The mother submitted that the Complainant was not financially dependent on the Deceased Member, had considerable assets of her own and that the Deceased Member had provided sufficiently for her in his will. The Friend did not meet the trust deed definition of spouse and was not financially dependent on the Deceased Member.

The Tribunal found on the facts that, at the time of death, the Complainant and the Mother were dependants of the Deceased Member but the Brother and the Friend were not. The Complainant was a dependant in that she was the spouse of the Deceased Member at the time of his death and the mother was financially dependent on the Deceased Member. The Brother was not financially dependent. As to the Friend, the Tribunal stated that it had no doubt as to the depth and commitment of the relationship and future intentions of the couple but the Friend did not meet the trust deed definition of Dependant, as she was not the spouse, was not financially dependent on and not in an interdependency relationship with the Deceased Member at the time of his death.

As to the distribution of the benefit, the Tribunal found that the Trustee's decision was not fair and reasonable and substituted its own decision that a 50-50 division of the death benefit would provide both sufficient support to meet the needs of the mother as well as recognise the financial contribution of the Complainant to the 25 year marriage, noting that a property settlement had not been reached at the time of death.

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