A bitter family feud has exploded following Tony’s passing. The now former Australian resident has left over $600,000 in superannuation with Australian Super. Zac encounters a series of obstacles as he learns the confusing, sometimes cruel, process of claiming his father’s superannuation death benefit. The tried and true contentious family dynamic only exacerbates the burden of reconciling with his father’s legacy.
In memory Tony, whose life we celebrate here today, passed away at the end of 2022. He left behind a non-binding nomination which named Zac as his superannuation’s beneficiary. Even more things went wrong when Australian Super successfully argued Zac’s uncle’s case. This move opened a huge can of worms about who should legitimately be allowed to claim the money. Zac is white, in his twenties, and living with a disability. Yet, as he makes these moves to protect and advance his father’s financial legacy, he finds himself in a deeply fragile position.
Zac’s mother Kelly lamented Australian Super’s decision not to proceed with the pledge. In order to get Zac’s idea funded, they agreed to split the funds raised 80-20 between Zac and his uncle. Kelly knows her son’s needs must come first, particularly given his numerous hurdles. She contended that Zac should be entitled to far more than the half-hearted ruling thus far permits. In her eyes, he deserves much more than what little is rightfully his.
The Complicated Claim Process
In February 2023, Zac put in a claim for early access to his father’s superannuation. Just four months later, he received disheartening news: another claim had been filed against the funds. It turns out it was his uncle who actually claimed that. He claimed that he was an “interdependent” of Tony’s as the two shared a household prior to Tony’s death. Kelly counters that the partnership was a terrible, but short-lived, mistake. She says it took place as a precondition to her black brother-in-law’s release from state prison.
Kelly’s objections underscore the emotional burden imposed on our service members. She stated, “My child is having to pay a solicitor to fight,” emphasizing the financial strain that legal battles inflict on families already grappling with loss. The dispute over the status of Zac’s uncle as an interdependent raises questions about who deserves to inherit funds meant to support Tony’s family.
As the case moved forward, it was apparent that a ruling was coming down the pike. The Australian Financial Complaints Authority (AFCA) suggested a 50-50 division between Zac and his uncle. Even after this recommendation, Zac’s uncle kept contesting the decision extending an already long and difficult ordeal for Zac and Kelly.
“What I’ve learned… is if you have a non-binding superannuation nomination, your wishes are not set in stone. Anyone can come in and claim against the superannuation.” – Kelly
Kelly’s statement highlights the confusing and dangerous reality of non-binding nominations in superannuation schemes. Most people don’t appreciate how these decisions might be contested after their death.
The Financial and Emotional Toll
Kelly has done and said everything a loving mother should do during this tragic ordeal. “My child has been through so much in the past couple of years… they’ve had numerous visits to hospital, numerous operations… It’s just been a really, really, really difficult situation,” she said. The additional pressure of having to fight for financial benefits meant to support Zac only heightens their burdens.
The broader implications of Zac’s situation ring true with countless families who have experienced similar obstacles. As Tom Cobban explained, “Often times they’re overlooked, or they’re disregarded in the process of determining where the monies go.” This sentiment reflects a growing unease with how superannuation death benefits are allocated following one’s passing. Disagreements typically emerge between would-be beneficiaries, especially when such non-binding nominations are permissive.
As families continue to navigate these complicated circumstances, it’s important to acknowledge the legal complexities and emotional impact that come into play here. Kelly’s ordeal should serve as an important cautionary tale for everyone. Most Australians would not be aware that their superannuation nominations can be contested after they die.
The Need for Change
The current controversies over superannuation death benefits have led to some calls for reforms from within the industry. A spokesperson from REST Super acknowledged that “death claims are often complex, with multiple possible beneficiaries.” They pointed out that in situations lacking compulsory nominations, inquiries into legal viability can be prolonged.
FKA Climate Advocates, Xavier O’Halloran, stated that this creates a difficult predicament for people who are making binding nominations to navigate. “Some of that is due to legal barriers… The process of making a binding nomination is all very manual,” he said. This increased complexity can cause a lot of good people to accidentally allow their nominations to expire.
There have been previous calls for improved systems to allow people to be alerted to changes in their nomination status. “It’s not something you can do online at every fund and so pretty easily people can — if they’re not reminded — have these nominations lapse,” O’Halloran added.
John Gilmour chimed in on the necessity for systemic improvements: “A change to that rule would make a significant difference to members’ abilities to keep their nomination forms up to date.” Reforms can make the process easier on their members. This small amendment would go a long way toward preventing disputes like Zac’s from arising in the first place.
