Case 1
The member died without a will when he was only 28 years old. He had a daughter who was seven years old at the time of his death, and she resided with her mother who was separated from the deceased. The trustee decided to pay the entire death benefit to the daughter and it was this decision that was being reviewed by the Superannuation Complaints Tribunal (Tribunal).
The member’s mother (grandmother of the minor daughter) asked for the superannuation death benefit to be split 50 per cent to herself and 50 per cent to her granddaughter, and the amount in dispute was just over $200,000. The mother of the minor daughter was not asking for any money herself, as she was content for her daughter to be the sole recipient.
The grandmother submitted substantial material to the Tribunal with the substance of her complaint being there was a financial and interdependency relationship between her and the deceased, even though they did not live together. The evidence was that the grandmother had stage four metastatic cancer and was supported financially and emotionally by her son. She also provided domestic and personal care to her son, including cooking, laundry, cleaning, and transportation when his car broke down, and babysitting of her granddaughter.
The minor daughter was also financially dependent on her father at the time of his death. Her annual living expenses were partially supported by him, including school fees, music theatre, groceries, clothing, medical expenses, entertainment, and the cost of pets and tutoring. He financially supported his daughter well in excess of the minimum child support requirements.
The trust deed provided that when a member died without a binding death benefit nomination in place, the trustee had a complete discretion to pay the benefit to such of the member’s dependants (as defined in the trust deed) and/or the legal personal representative that it decided.
“Dependant” was defined in the trust deed to first incorporate the definition from the Superannuation Industry (Supervision) Act 1993 (SIS Act). It therefore provided that the spouse of the member, any child of the member and any person with whom the member had an interdependency relationship was a dependant. This clearly covered off the minor daughter who was found by the Tribunal, by virtue of evidence of a birth certificate, to be the deceased’s biological child.
However, the trust deed for this particular fund, also provided that the definition of dependant included:
“any person, whether or not related to the Member of former Member by blood or marriage who, in the opinion of the Trustee, is or was wholly or partially dependent on the Member of former Member at the time of the member’s death or of any other event in respect of which an entitlement to a benefit may arise or who has or had at the relevant time a legal right to look to the member or former Member for support.”
Given the above definition, the Tribunal first had to decide whether the grandmother was in an interdependency relationship (as defined in SIS Act) with her son. Under the Act, when two people don’t reside with each other at the date of death, they can only be in an interdependency relationship if the reason for not living with each other sits within one of the exceptions. In this case, none of the exceptions applied. The Tribunal therefore concluded it was reasonable for the trustee to be of the opinion the mother and son were not in an interdependency relationship at the date of his death. However, given the extended definition of dependant for this fund, the Tribunal went on to explore whether the grandmother qualified as a ‘dependant’ under the trust deed anyway. This required determining whether she was financially dependent on her son at the time of his death.
The evidence before the Tribunal was that the deceased provided his mother with cash at the time of his death, and there was no reason to believe this would have stopped but for his death. Consequently, the grandmother satisfied the definition of dependant under the trust deed. But was she entitled to some of the death benefit?
The answer was yes but not the 50 percent she requested. The Tribunal held the grandmother was entitled to 15 percent of the death benefit placing weight on the fact that the minor daughter had a much greater expectation of support from her father than the grandmother, notwithstanding the difficult financial circumstances the grandmother found herself in post her son’s death.
D19-20 39
Case 2
A 35-year-old member died tragically of carbon monoxide poisoning. He had neither a spouse nor children when he died. On joining the fund, he nominated his brother as the recipient of any death benefit; however, the trustee decided to not pay the brother on the grounds he was not a dependant (as defined in the trust deed) of the deceased. The trustee then decided to pay the benefit equally to the deceased member’s parents but on obtaining further information from the mother, it reversed this decision and decided to pay the mother 100 per cent of the benefit on the grounds of interdependency. It was this decision which was being challenged in the Tribunal.
The mother and father were separated, and the father disputed his son lived with his mother at the date of death. He provided the Tribunal with additional addresses including that of an aunt, who he alleged received the proceeds of a car which was sold after his son’s death to pay her unpaid rent. The father’s evidence also indicated he had lent his son money to buy motor vehicles which was never repaid. He also paid his son’s funeral expenses.
The mother supplied the Tribunal with evidence that she lived with her son when he died and this evidence was accepted. She also submitted that her son’s undiagnosed mental health issues and the fact he had lost his license for five years meant he was unable to find secure employment. He was on Centrelink payments when he died but still paid her minimal money for board and the costs of the household. She drove him to TAFE each work day where he was doing an engineering course and provided domestic and personal care to him beyond that of living together for reasons of convenience.
The member died intestate and the brother indicated to the trustee he did not intend to apply for Letters of Administration as the estate did not have any assets. It was agreed by all that the brother did not satisfy the definition of dependant in the trust deed.
Under the trust deed, the trustee had to pay the death benefit to a dependant, if there was one, and could only pay non-dependants, as allowed by law, when there were no dependants (as defined). This meant the Tribunal had to first determine if there were any dependants. The mother and father could only be dependants under the trust deed if there was the necessary interdependency relationship under the SIS Act.
The Tribunal held that the relationship between son and father was not one that satisfied the interdependency rules in the SIS Act first because they did not live together at the time of death, and secondly the evidence of the father regarding unpaid loans for car purchases was not relevant.
Turning to the relationship between mother and son, the Tribunal held that was one that satisfied the interdependency rules because they were living together at the time of death, there was some money paid by the son to the mother for cost of living, and the care she provided him went beyond that normally provided by a parent to an adult child. Given this conclusion the Tribunal affirmed the Trustee’s decision to pay the mother 100 per cent of the death benefit.
D19-20 36
