The Association of Superannuation Funds of Australia (ASFA) has called on the Federal Government to deliver a clear-cut set of guidelines with respect to the payment of superannuation death benefits in interdependent relationships.
In a submission to the Treasury commenting on draft regulations covering the new interdependent relationships arrangements, ASFA has made it clear that the distribution of death benefits has been a challenging issue for trustees often leading to complaints being brought before the Superannuation Complaints Tribunal (SCT).
“The resolution of such complaints is a cost to the industry that is ultimately borne by all superannuation fund members and retirement savings account holders,” the submission said. “It is therefore important that the introduction of new provisions concerning interdependency relationships provide clarity for members, potential beneficiaries, trustees and the SCT.”
ASFA is recommending that the industry and either the Australian Prudential Regulation Authority or the SCT cooperate to produce guidance to assist trustees with the evidentiary requirements for interdependent relationships.
As well, ASFA is urging that the regulations be written in both past and present tense to better reflect what an interdependency relationship is, in respect to payment of a death benefit.
The ASFA submission also points out the need for clarity with respect to the meaning of providing “domestic support and personal care” and suggests that while more clarity is needed with respect to couples living apart due to a disability, the definition “permanent incapacity” should be removed and replaced “with a test more closely aligned with the disability test.”
