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What does an interdependency relationship mean when paying superannuation tax-free?

The recent Federal Court decision of Williams v IS Industry Fund Pty Ltd [2016] FCA 524 provides some clarity on this question.

The Deceased was a man of 31 years  with no spouse or children.

The trustee of the Super Fund, when payment the death benefit (which included significant insurance) considered that the father was not a dependant of the deceased child. The child had lived with the father for some months before passing, though had lived for the last 2 months in a hospice.

The father objected to the trustee’s decision and lodged a complaint with the Superannuation Complaints Tribunal.  The Tribunal affirmed the decision of the Trustee that the father was not a dependant by reason of being in an interdependency relationship with the child.

An appeal was made to the Federal Court, which depended on two legal matters – whether the Tribunal was required to consider whether the interdependency relationship existed immediately before the son’s death, and whether the Tribunal was required to consider whether the only reason they were not living together was due to the illness of the son. It was held that they must consider these things.

Therefore, the father had to prove that while living together, there was a close and personal relationship and that relationship continued after the admission to hospital – such as by regular and constant visits, and that the father provided support (whether financial or other) to his son while the son was hospitalised.

Eventually, these matters were considered , but it was held there was no interdependency relationship.  the initial cohabitation was not intended to be permanent, and was not enough before the son went to the hospice until his death.

By | 2018-12-10T05:21:48+00:00 December 10th, 2018|Springdale News|0 Comments

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