Monday, 25 August 2008

Superannuation Complains Tribunal case: not changing the superannuation beneficiaries

In a recent Superannauation Complaints Tribunal decision, the complainant was the mother of the deceased member. She complained about the Trustee's decision to pay the death benefit to a trust for the benefit of the deceased member's 3 minor children.

The member had nominated his former wife to receive his death benefit when he joined the fund in 2001 and did not update the nomination after their divorce in October 2005. In his will made in June 2005, he appointed his brother as executor and left his estate to be distributed one quarter to his mother and the balance to his children.

The Trustee had found that the complainant was not financially dependent on her son, arguing that the monies paid to her by him were paid as board or reimbursement of expenses incurred to provide food and accommodation rather than in the provision of any financial support to her. The complainant claimed that she was partially financially dependent on her son and in an interdependency relationship with him.

She stated that he lived with her for three and a half years and paid her $50 to $80 per week. She referred to a case where the court held that a mother was financially dependent on a son who paid $30 a week to her. As to interdependency, she submitted that she and her son had lived together, provided each other with some financial support and provided each other with domestic support and personal care.

The submission made on behalf of the 3 children stated that the deceased member had paid about $1000 per month as child support before his work injury in December 2005 and thereafter about $20 per month. Some doubts were expressed about the deceased member's ability to pay board of $60 to $80 per week after December 2005.

The Tribunal considered the wishes of the Deceased Member, noting that the Tribunal concluded that the wishes of the deceased member were not clear, as his will did not expressly provide for the superannuation benefit to be shared between his mother and his children, unless the benefit was paid to the estate.

The Tribunal decided that the complainant could be considered as a financial dependant of her son "on the basis of irregular and varying payments made by the Deceased Member to the Complainant over a period of three years prior to his death." The Tribunal also stated that the deceased member had a close relationship with his mother and with his children and noted that, while he was working, a significant proportion of his income was used to support his children. The Tribunal stated that the Trustee clearly took into account the greater level of financial support that the member's children would have required over the period of their infancy. The Tribunal affirmed the Trustee's decision as being fair and reasonable in the circumstances.

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