Individuals who are not classified as dependants under the Superannuation (Industry) Supervision (SIS) Act can still receive a death benefit payment, but this must be arranged through the estate, a technical specialist has confirmed.
“If a member wants people who aren’t SIS dependants to get their money, they need to nominate their legal personal representative and then have provisions in their will that direct the funds to go to the brother, parents, friend or whoever, whereas any of the SIS dependants can receive the money directly from a super fund,” Knowledge Shop technical superannuation adviser Jason Hurst noted during a recent Accurium briefing.
Hurst clarified a child is always considered a SIS dependant, regardless of age, so they can always be nominated. However, once they reach adulthood, they become non-dependants unless other factors apply.
“A stepchild is a bit of an interesting one because they cease to be a child of the member if they divorce or become widowed from that child’s biological parent. In cases where there’s been a divorce, but someone wants to provide for their former stepchild, they would probably need to nominate them to the estate unless they had actually formally adopted that child,” he said.
He also addressed common misconceptions about de facto relationships in the context of death benefit nominations as many people wrongly assume there is a specific period two people must live together for to be considered spouses.
“Quite often people talk to their neighbours at barbecues and they’ll say ‘you’re a de facto if you’ve been with someone for six months or two years’. That may be the case under family or succession law, but for super, there’s no minimum timeframe,” he noted.
“If two people enter into a genuine domestic relationship and they want to nominate each other, they can technically do that the next day if they want to. If people are not legally married and they’re a little bit more discreet about their relationship but still want to ensure there’s no question that their partner will be recognised as a spouse, they can consider registering the relationship.
“Register the partnership with Births, Deaths and Marriages to indicate that you are in a relationship but don’t want to be legally married.”
