Reforms to stop perpetrators benefitting from super payouts welcome, but the system is still failing victim-survivors

Super Consumers Australia, the Economic Abuse Reference Group (EARG), Redfern Legal Centre, Domestic Violence NSW, the Australian Multicultural Women’s Alliance, Safe and Equal and the organisation Each have welcomed the Government’s consultation to prevent perpetrators of domestic and family violence (DFV) from accessing victims-survivors’ superannuation death benefits.

Sarah*’s daughter passed away last year and she has come up against a wall of super fund bureaucracy and legal costs to stop her daughter’s abuser from receiving her death benefits. Her daughter had two super funds, one will consider DFV in their death benefit decisions and the other fund will not. Sarah has spent thousands of dollars already on a lawyer to help prevent her daughter’s abuser from benefitting financially from her death.

Super Consumers Australia Director of Advocacy, Lily Jiang said the proposed reforms are a critical step forward but to achieve meaningful change, the Government and industry need to address the significant gaps in super funds’ capacity to respond to DFV and abuse in a trauma-informed way.

“This reform is long overdue. Right now, the super system can allow perpetrators of abuse to benefit financially when a victim-survivor dies. That should never happen.”

“We welcome the Government taking action but the solution needs to make all super trustees responsible for considering DFV in death benefit claims and deliver fair and consistent outcomes for people impacted by DFV and abuse.”

Under current laws, super death benefits do not automatically become part of someone’s estate when they pass away. Super trustees are also not required to consider DFV when deciding who receives the benefit. This can mean perpetrators receive the payout while families are left to navigate complex and costly processes on their own.

The organisations are calling for a better approach to the reform, including:

• Updating the law to allow super funds to exclude perpetrators where there is strong evidence of DFV or abuse.
• Providing clear guidance for funds so there is consistency in how DFV and abuse are taken into account for death benefit decisions.
• Maintaining access to the Australian Financial Complaints Authority (AFCA) as a free, independent and effective complaints resolution service.
• Making all super funds implement strong protections to respond to DFV and abuse. 

Without this, the system will continue to fall short.

“Super funds are already making decisions about death benefits, navigating complex domestic and family relationships. These reforms should clarify their responsibilities on cases involving DFV so funds can do their job to a consistent standard without increasing the burden, costs and re-traumatisation for families of victim-survivors.” says Ms Jiang.

Jasmine Opdam, Policy and Advocacy Lead for Redfern Legal Centre’s Financial Abuse Service and National Coordinator of the Economic Abuse Reference Group, says the other options the Government has proposed, which involve court proceedings or estate law, would make the reforms so narrow that they are ineffective. 

“Most DFV and abuse cases do not involve the police or the courts – many victim survivors don’t report abuse for various reasons, and reports rarely result in convictions.” 

In fact, police and court systems are frequently misused by perpetrators to further the abuse. Estate law claims and court proceedings also incur significant costs – a victim survivor’s family might end up having to spend hundreds of thousands of dollars to ensure the perpetrator does not receive the death benefits.”

The organisations also urge the Government to progress the other recommendations from the 2024 Parliamentary Joint Committee Inquiry into Financial Abuse to tackle financial abuse in super, including reviewing self-managed super funds and embedding Safety by Design across superannuation products and services.

“Super is meant to be a safety net. With the right reforms, it can be part of the solution, not used to cause harm.” says Ms Jiang.

Read the full joint submission. 

* not her real name