When age overcomes hardship

A recent Superannuation Complaints Tribunal (SCT) determination has reinforced the degree to which superannuation funds are legally constrained in providing financial assistance to members facing financial hardship.

The SCT recently considered a complaint lodged by a superannuation fund member who had applied for early access to his superannuation benefit on the grounds of severe financial hardship.

The member had originally applied for $10,000 of his super balance to be released, but the superannuation fund advised him it had assessed his application and its assessment was that he was entitled to receive a hardship payment of $924.90.

However the catch for the member was that the superannuation fund told him, under the relevant legislation, the minimum amount that it could release was $1,000 and as a result it could not pay him the $924.90.

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The member queried the trustee's decision and said he believed the evidence supported the claim being in excess of $1,000 but was informed by the fund that household utility accounts, which formed part of his claim for a hardship payment, were "considered to be anticipated expenses and not immediate expenses and, under its guidelines, anticipated expenses cannot be paid unless they are urgent and will become payable soon".

In upholding the superannuation fund's decision not to make the hardship payments, the SCT said that, "unfortunately, the legislation does not permit the Trustee to make hardship payments on that basis".

"The legislation is quite clear in that regulation 6.01(5)(a) requires that the Trustee be satisfied that the Complainant is unable to meet reasonable and immediate family living expenses, in order for the Trustee to be permitted to make a hardship payment. The legislation, therefore, does not permit payments to supplement income because such payments do not fall within the category of immediate family living expenses, as required by the legislation."

The good news for the fund members, as outlined by the SCT, was that by the time it finally made its decision the member had reached his super preservation age of 55 enabling the fund to "therefore, give consideration to whether it is able to make a payment of part or all of the Complainant's benefit on the basis that he has attained his preservation age".