How the super system fails domestic and family violence victim-survivors

Under the current system, perpetrators of domestic and family violence are able to access their victim’s superannuation.

This article mentions suicide and domestic and family violence. If you or anyone you know needs support, contact the national domestic, family and sexual violence counselling service contact on 1800 737 732 or visit www.1800respect.org.au, Lifeline on 13 11 14 or lifeline.org.au, or Beyond Blue on 1300 224 636 or beyondblue.org.au.

Julie Adams OAM has endured every parent’s worst nightmare. Her youngest daughter, Molly Wilkes, was just 22 when she died in 2022.

Molly was married to a partner who had been severely physically, emotionally and financially abusive for a long time. In 2020, Molly had moved to the US to be with her partner, but had no legal capacity to work there. She was socially isolated and had little money.

Relationships NSW reports that it takes an average of seven attempts for a victim-survivor to leave an abusive relationship. Molly tried to leave the relationship six times and had her suitcases packed and ready to go when she died.

Relationships NSW reports that it takes an average of seven attempts for a victim-survivor to leave an abusive relationship

When her former partner escalated his abuse, including making death threats and encouraging her to suicide, Molly took her own life. After Molly’s death, a horrible situation became even more painful as Molly’s spouse claimed her super death benefit, and Molly’s fund agreed to pay him the money. This decision was made despite the fact that Molly had previously nominated her mother as her beneficiary.

A flawed system

Molly’s case highlights the rigid and flawed way the law around super death benefits works. 

Only certain groups of people (spouses, children and financial dependants) can get a death benefit. In this case, Adams had no legal recourse to stop her daughter’s husband from claiming her super, even though he allegedly had been extremely abusive.

“When he put in his claim for the superannuation, I tried in vain to stop him from being paid it by showing [the fund] how abusive he was towards her,” says Adams. “I knew the legislation didn’t support any change to where they were going to pay out the benefit, but I tried everything I could.”

Adams lobbied the super fund to prevent this perverse payout. She tried to argue that she was Molly’s financial dependant to claim the super. This argument was just a means to an end, as Julie didn’t want her daughter’s super; she simply wanted to stop the alleged perpetrator from claiming it. She intended to donate the money to a domestic and family violence organisation if she successfully got the fund to pay her.

After the fund said they would pay Molly’s alleged perpetrator the super, Julie took the case to the Australian Financial Complaints Authority (AFCA). But AFCA ruled in favour of the fund. They said a super fund could only validly refuse to pay the former partner Molly’s super death benefit if he was guilty of murdering her. Alarmingly, not even a manslaughter ruling would allow them not to pay him.

A super fund could only validly refuse to pay the super death benefit if he was guilty of murdering her. Alarmingly, not even a manslaughter ruling would allow them not to pay him

“I just hoped upon hope that I could present enough arguments in enough different ways that I might change the outcome,” Adams says.

“I felt disappointed that I hadn’t been able to get it changed.”

Adams says the super fund and AFCA were both sympathetic but said the law tied their hands. “There was nothing they could do about it as they had no discretion,” she explains.

“That was despite the fact that my daughter … had me written down as her beneficiary.”

After the AFCA decision, Adams realised it was the end of the road for her attempts to stop the alleged perpetrator from claiming Molly’s super.

“When I told my other children that I hadn’t been successful, I think my son said it best. He just said: ‘Mum, you gave it your all; you did everything you could, and the money will do him no good. People like him won’t succeed just because they get given this money’. They were very wise words from a 30-year-old.”

Preventing perpetrators from claiming

Now, Adams is fighting for change. She says the government must change the law to prevent violent perpetrators claiming the super of those they have abused.

She also wants funds to be empowered to consider more factors when deciding where someone’s super death benefit goes.

“Whether or not the person suicided or died from other causes, the [super fund] can’t take anything about the relationship into account.

“What I would like to see is that they can recognise where there is evidence of domestic violence – a police report, an AVO, community or health services involved in the case, or if there is strong evidence given by a family member or loved ones on the abuse – the (perpetrator) would not be considered an eligible dependant.”

Alex Kelly, acting CEO at Financial Rights Legal Centre, says the only protection against a perpetrator getting their victim-survivor’s death benefit they have found is a rule that someone can’t claim the super of someone they have murdered.

“Funds should be specifically empowered to consider family violence when making death benefit distribution decisions,” she says.

Funds should be specifically empowered to consider family violence when making death benefit distribution decisions

Alex Kelly, Financial Rights Legal Centre

Kelly also says super funds should be proactive in asking their members to check their death benefit beneficiary nominations, ensuring people understand whether these nominations are binding and helping them direct their super to go to their estate where necessary.

Ultimately, it’s clear the death benefit distribution system needs a rethink. We’ve previously covered how the system is overly complicated and may not work well for blended families. Further, we’ve outlined how more people are complaining about the death benefit system and that it isn’t working for First Nations people.

With these issues in mind, Rebekah Sarkoezy, policy manager at Super Consumers Australia, says the government needs to set up a broad-based, independent review of the super death benefit system to review whether it is still fit for purpose. 

Veronica’s story – her abuser could have got her super 

Veronica Beeson is a clinical psychologist working in Western Australia. About 13 years ago, she was in a relationship with a partner who was emotionally and physically abusive. During this time, her former partner lost his job and she began paying for all their shared expenses.

Veronica Beeson says funds need to do more.

When a family member of Veronica passed away, she got some insights into how death benefit nominations work and was horrified to realise the law would have viewed this abusive relationship as a de facto partnership, and her abuser would have got her super if she died. She says just because two people live together doesn’t mean they’re in a genuine long-term relationship or that the surviving partner should automatically get the other’s super.

“Often, relationships that have that abusive flavour move quite quickly,” she explains. 

“I signed a lease with someone about seven or eight months into our relationship. Straight after I signed the lease, [he started making] denigrating comments, [saying] I couldn’t do anything right, and he was very nasty about my friends. That escalated over a period of six months to where [the abuse] became physical, and I put a restraining order on him.”

If she had died, the law would have viewed her former partner as her financial dependant because she paid his bills

She says that if she had died, the law would have viewed her former partner as her financial dependant because she paid his bills. This in turn would mean he would get her super. Beeson says this isn’t right.

“I was paying all these bills, but I didn’t realise that would make him my financial dependant. I was looking after my own credit rating; when you’re in an abusive relationship you do what you’re supposed to, so that you survive that relationship.”

“[Funds] have to look at what friends are saying about [the relationship]: denigrating comments, financial abuse, isolating people from their support networks. They have to start listening to the people who know [the victim-survivor] best, particularly people who don’t have a financial incentive to lie.”

“[The law] should not equate a lease agreement with a marriage license. People have a right to sign a lease with someone and figure it out.”

Beeson also says that when a fund is deciding who gets someone’s super death benefit, they should have to consider all forms of abuse as set out in the Family Law Act. She says simply looking for a restraining order isn’t sufficient as not all victim-survivors take one out.

Victims can’t access abusive partner’s super

While perpetrators of domestic and family violence and/or financial abuse claiming the super of their victims is a shocking outcome, it isn’t the only problem in this area.

There have also been cases where the perpetrator dies, but the legal system rules the victim-survivor isn’t entitled to their super. These outcomes can be, at least in part, because the couple wasn’t living together when the perpetrator passed away

She couldn’t prove financial dependence because he controlled her finances

For example, in one case, a woman who experienced domestic and family violence during her 29-year relationship with her partner did not get any of his super. The tribunal, AFCA, noted that the woman and her partner were living apart. She said this was a temporary arrangement because of his physical abuse. Further, she couldn’t prove financial dependence because he controlled her finances.

In another case, a woman did not get any of her de facto spouse’s super – it instead went to his parents. This decision was despite her claims of financial dependence. She said she had stopped living with the deceased because he had “violent episodes” and she needed to protect her “mental health and physical wellbeing”.

Lawyers say the super industry supports change

Luke Barrett, a partner and lead in legal firm Gilbert + Tobin’s superannuation team, says the industry will support changes to stop perpetrators from claiming the super of their victim-survivors.

“I think the superannuation funds will encourage it, but their desire will be to end up with a regime that is clear-cut,” he explains. 

“The challenge and the opportunity for the government is to be very clear in their drafting about what they want to happen and what they don’t want to happen anymore.” 

Superannuation funds will encourage it, but their desire will be to end up with a regime that is clear-cut

Luke Barrett, superannuation lawyer at Gilbert + Tobin

While funds have often been criticised for processing death benefits slowly, Barrett says that if a government agency can swiftly alert super funds in cases of domestic and family violence, adding this step to the process won’t cause significant delays. 

Barrett also says any change to the law should make clear whether funds can take domestic and family violence into account in all death benefit distributions or just in those cases where the fund has discretion over where the money goes.

“The details always need to be worked out, but that’s not a good reason to stand in the way of good policy reform,” he says.

Super Consumers Australia calls for urgent action

Sarkoezy says the government must act to protect the super of domestic and family violence victim-survivors.

“The needs and interests of victim-survivors of domestic and family violence have been ignored by policymakers for too long. It’s time to listen and learn from those with lived experience of abuse.”

Super Consumers Australia is calling for the following changes.

• Amend the law so that funds can consider domestic and family violence and/or financial abuse when deciding who gets someone’s super when they die.
• Clarify that the complaints handling body, AFCA, can consider domestic and family violence in considering whether a fund’s death benefit decision was ‘fair and reasonable’. 
• Ensure funds are adhering to best practice when working with victim-survivors. 
• An independent review of the death benefit distribution system to ensure it’s working for all Australians, including those on low and middle incomes.

“We need these urgent changes to ensure the super system is doing its best to help those experiencing the scourge of domestic and family violence,” Sarkoezy says. 

Currently, a joint parliamentary inquiry is looking into financial abuse and financial services. Sarkoezy encourages anyone concerned about this issue to contact their local member of Parliament to say they want action. Super Consumers Australia is also interested in hearing from anyone with views or experiences of financial abuse and super. You can email enquiries@superconsumers.com.au Any emails sent to this address can be kept confidential.