A senior industry executive has dispelled a commonly held perception that a de facto couple must have been in a relationship for at least six months before they can be treated as each other’s spouse for superannuation purposes.
“When you look at that word couple [in the context of superannuation], you have to look at a whole bunch of different circumstances and take into account a bunch of different things to determine whether two people are a couple. [That includes] duration,” Colonial First State head of technical services Craig Day noted.
“[But] it doesn’t say minimum duration. There is no six months [reference]. Everyone says six months. I don’t know where that comes from, but there is no minimum duration.”
Day pointed out satisfying the definition of a couple for superannuation purposes was important as it potentially allows the individuals involved to make a claim on the other person’s retirement savings benefits.
To this end, he cited some of the other factors that would be examined along with relationship duration to determine if a pair of individuals is a couple in a superannuation context include the degree of financial dependence between the two, their ownership, use and acquisition of assets, their mutual commitment to a shared life and their care and support of any children involved.
Further, he emphasised the seriousness of the issue with the revelation Colonial First State has a dedicated committee to determine whether two people are a couple for superannuation purposes.
“You know why? Because flatmates have a tendency of saying ‘you know what, me and whomever are in a relationship’. [Our response to such a claim is] ‘show us the evidence’. So you’d be looking at things like the address … co-ownership of assets, a big one would be who [they have] nominated in their life insurance as the recipient or who [they have] nominated in their superannuation as a death benefit dependant,” he explained.
He suggested adopting a cautious approach to the situation would be a prudent strategy for practitioners.
“If in doubt, register [the relationship] or also think about putting in place a [statutory declaration for the client] to say that ‘I’m in a relationship with this person’ because the last thing you want is a dispute,” he said.
