This case study explains how an unfair superannuation death benefit decision was successfully overturned through the Australian Financial Complaints Authority (AFCA). It outlines what happens with a death benefit when there is no Will, how super funds assess dependency and relationships, and why initial trustee decisions can be challenged.
It also shows how a well-prepared appeal can result in a complete reversal and the full payment of a superannuation death benefit.
Background
Rebecca (a pseudonym) came to us during one of the most difficult periods of her life.
Her partner of six years had passed away after an ongoing battle with addiction. In addition to the grief of losing her spouse, Rebecca was suddenly thrust into a highly stressful dispute over his superannuation death benefits. A dispute that questioned not only her financial entitlement but also the legitimacy of her relationship itself.
A death benefit without a Will
Rebecca’s spouse died without a Will.
What he did have, however, was a significant death insurance benefit attached to his superannuation fund, valued at approximately $800,000.
Shortly after his passing, it became apparent that multiple parties would be competing for this benefit. Rebecca’s relationship with her late partner’s adult son and the son’s biological mother deteriorated rapidly once the value of the death benefit became known.
What followed was deeply distressing.
Rebecca was accused of faking her relationship with the deceased for the purpose of financial gain. These allegations were completely untrue. While Rebecca acknowledged that her relationship with her partner was not always harmonious, they loved each other and remained in a committed relationship right up until his death.
Rebecca was not only concerned about losing the financial support her partner intended for her but was also deeply troubled by how she was being portrayed during the dispute.
Seeking help to pursue the death benefit
Overwhelmed and unsure how to respond, Rebecca engaged Berrill and Watson to assist her in pursuing the superannuation death benefit.
From the outset, we understood that this matter was not just about money. It was about ensuring Rebecca’s relationship was accurately understood and fairly assessed under superannuation law.
Who is entitled to a superannuation death benefit?
Under Australian superannuation law, a death benefit is generally paid to a dependant of the deceased or to their legal personal representative.
A dependant can include:
- a spouse (including a de facto spouse);
- a person in an interdependent relationship with the deceased; or
- someone who was financially dependent on the deceased at the time of death.
An interdependent relationship is assessed by looking at factors such as:
- whether the parties lived together;
- the existence of a close personal relationship;
- the degree of financial support; and
- the level of domestic and personal care provided.
Importantly, relationships are not required to be perfect or free from conflict to satisfy these criteria. You can read more about death benefits in our earlier blog, “A guide to super death benefit claims”
Our submissions to the superannuation fund
We prepared detailed submissions to the superannuation fund explaining why, at the time of his death, Rebecca and the deceased were in a genuine relationship and why Rebecca therefore qualified as a dependant under superannuation law.
In support of the claim, we provided:
- photographs of the couple together;
- social media posts demonstrating their ongoing relationship;
- statutory declarations from friends, family members, and others who knew them as a couple.
Despite the evidence provided, the superannuation fund ultimately determined that on balance, Rebecca and the deceased were not in a relationship at the time of his death.
As a result, at this point, Rebecca was awarded none of the death benefit.
Appealing to the Australian Financial Complaints Authority (AFCA)
When a superannuation fund makes a decision about a death benefit that is unfair or unreasonable, that decision can be appealed to the Australian Financial Complaints Authority (AFCA). The AFCA appeal will usually happen after the decision is appealed internally to the super fund (which we did in this case).
You read more about appealing adverse decisions in disability insurance claims (e.g., death benefits, TPD, income protection) in our earlier blog, “Three options to appeal a rejected insurance claim”
AFCA is a free, independent dispute resolution body that has the power to review superannuation death benefit decisions. AFCA considers whether the trustee’s decision was fair and reasonable, having regard to the evidence available at the time and any additional evidence provided during the complaint process.
Importantly, AFCA decisions are binding on superannuation funds. You can read more about complaints to AFCA in our earlier blog, “AFCA complaints against superannuation funds and insurers”
We advised Rebecca that, in our view, the fund’s decision was unreasonable and that she had good prospects if the matter was appealed to AFCA.
Strengthening the case at AFCA
After lodging the complaint with AFCA, we undertook further investigations to strengthen Rebecca’s case.
This included:
- obtaining additional documentary evidence supporting the existence of the relationship at the time of death, such as bank statements and hospital records;
- securing further statutory declarations from reliable and independent witnesses who had direct knowledge of the couple’s relationship; and
- making comprehensive submissions to AFCA, asserting that the only fair and reasonable outcome was for Rebecca to receive the death benefit.
We also ensured strict compliance with AFCA’s procedural requirements and deadlines. Our extensive experience with the AFCA complaints process meant that all timeframes were adhered to. A factor that became particularly important when one of the other joined parties failed to meet a critical timeframe.
A complete reversal of the decision by the super fund and a big win for our client
Upon reviewing the submissions made to AFCA, the superannuation fund changed its position.
Before AFCA was required to make a formal determination, the fund conceded the matter and awarded 100% of the death benefit to Rebecca.
The final result was profound:
- Rebecca went from being awarded $0 to receiving the full death benefit valued at close to $800,000.
- An unfair and deeply distressing decision was overturned.
- Rebecca’s relationship was recognised for what it truly was.
Why it is important to appeal unreasonable decisions
Rebecca’s case highlights the importance of challenging superannuation fund decisions when they are unfair or not supported by the evidence.
Death benefit disputes are often emotionally charged and legally complex. Trustees do not always get these decisions right, particularly where relationships do not fit an idealistic mould.
Get help from a life insurance expert
At Berrill and Watson, we have extensive experience acting in superannuation death benefit disputes and appeals to AFCA. We understand what evidence matters, how trustees assess dependency, and how to navigate AFCA’s strict processes and timeframes.
If you have received a superannuation death benefit decision that doesn’t feel right, it may be worth having it reviewed.
Sometimes, appealing a decision can make the difference between receiving nothing and receiving everything you were entitled to.
Contacting Berrill & Watson
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