The concept of interdependency was introduced into the Superannuation Industry (Supervision) Act 1993 in 2005 as a way to recognise, and allow for the payment of a deceased person’s superannuation benefits, to people who fall outside of the strict legally-defined categories of a spouse or child.
A person who can show they were in an interdependency relationship with a deceased person can make a claim to receive the deceased person’s superannuation benefits.
An interdependency relationship will be found to exist between two individuals if:
- they have a close personal relationship;
- they live together;
- one or each of them provides the other with financial support; and
- one or each of them provides the other with domestic support and personal care.
Apart from some very limited exceptions, an interdependency relationship must exist at the date of death of the person with the superannuation benefit, and all of the four elements listed above must be satisfied.
Further explanation of the elements of an interdependency relationship
The laws and regulations governing superannuation provide that a deceased person’s superannuation death benefits may only be paid to the deceased person’s “legal personal representative” or their “dependants”.
“Legal personal representative” means the executor named in the deceased person’s Will, or, if no Will exists, the administrator of the deceased person’s estate.
“Dependants” include the deceased person’s spouse (including a de facto spouse or a same-sex spouse), child (including a stepchild or an adopted child) and any person with whom the deceased shared an interdependency relationship.
It is only if no beneficiary can be identified in any of the above categories that the superannuation trustee pay the superannuation benefits to “any person” (which can include parents, siblings, cousins, nieces, nephews, aunties, uncles, previous spouses or friends of the deceased).
The balance of this post discusses the meaning of an “interdependency relationship” for the purposes of claiming superannuation death benefits.
To determine whether an interdependency relationship exists, Regulation 1.04AAAA of the Superannuation Industry (Supervision) Regulations 1994 (Cth) lists a number of matters to be taken into account.
These matters include:
- the duration of the relationship;
- whether or not a sexual relationship exists;
- the ownership, use and acquisition of property;
- the degree of mutual commitment to a shared life;
- the care and support of children;
- the reputation and public aspects of the relationship;
- the degree of emotional support;
- that the extent to which the relationship is one of mere convenience;
- any evidence suggesting that the parties intend the relationship to be permanent;
- the existence of a statutory declaration signed by one of the persons stating that they are, or were, in an interdependency relationship with the other person;
- the provision of support and care of a type and quality normally provided in a close personal relationship, rather than by a mere friend or flatmate (for example, significant care provided while a person is unwell or suffering emotionally).
Not every factor needs to be present for an interdependency relationship to exist but the greater the number of factors satisfied, the more likely the relationship will meet the definition.
Examples of interdependency relationships may include those between platonic long term housemates or partners, siblings or between an adult child who lives with and cares for an ageing parent on a long-term basis.
An interdependency relationship can still be found to exist if a close personal relationship exists but the two people were temporarily living apart at the date of death, such as where one person was temporarily working overseas or was in a hospital or in jail. The reason for the separation, its duration and whether or not there was an intention (at the time of death) to resume living together will be considered to work out whether the separation was temporary.
There is also an exception to the requirement that the two people must have been living together at the date of death if the reason that they were not living together was that either or both persons suffer from a disability. The concept of disability may include physical or mental disability.
What is the significance of an interdependency relationship?
The introduction of the interdependency concept broadened the class of people who could claim a superannuation death benefit and recognises that not all significant human relationships fall into the strict legal categories of spouses and children.
It is important to seek expert legal advice to assess if an interdependency relationship existed and to determine if a claim should be made in relation to a deceased person’s superannuation benefit.