A question that often arises when dealing with death benefit nominations is whether a person qualifies under the interdependency or financial dependency definitions. This is a crucial consideration as meeting the dependency criteria enables potential beneficiaries to qualify as dependents and receive a death benefit.


Interdependency relationship

An interdependency relationship exists between two people if all of the following conditions are met:

  1. They have a close personal relationship.
  2. They live together.
  3. One or both provide financial support to the other.
  4. One or both provide domestic support and personal care to the other.


However, if two people satisfy the close personal relationship requirement but cannot fulfill the other three requirements, they can still satisfy the interdependency relationship if:

  • Either or both of them suffer from a physical, intellectual, or psychiatric disability, or
  • They are temporarily living apart (e.g., overseas or in jail).


Determining the existence of an interdependent relationship is not straightforward. However, superannuation law provides a list of considerations to help superannuation fund trustees determine if an interdependency relationship exists (or existed before one of the parties died).

These considerations include the duration of the relationship, the existence of a sexual relationship, ownership and use of property, mutual commitment to a shared life, care and support of children, reputation and public aspects of the relationship, emotional support, convenience, intent for a permanent relationship, and a statutory declaration signed by one of the individuals. It is not necessary for each of these factors to exist for an interdependency relationship to be recognised. Instead, each factor is given appropriate weighting based on the circumstances.


Financial dependant

If a beneficiary fails to meet the interdependency relationship criteria, they may qualify as a financial dependant.

Being financially dependent on the deceased generally means relying on them for necessary financial support. This can also apply to children over 18 years old who must be financially dependent on the deceased to be considered a financial dependant. However, the term “financial dependant” is not explicitly defined in superannuation or tax legislation. It takes on the ordinary meaning of the term and relies on case law and the facts of each case.

In most cases, the value of payments received from the member is not the sole determinant of financial dependency. The degree of dependency on those payments is considered, including the extent to which a person relies on financial support for basic living expenses.

For example, a grandparent paying school fees for a grandchild is unlikely to have the grandchild qualify as a financial dependant because such payments are seen as more discretionary than providing for essential elements of life, such as food or shelter.

In summary, superannuation case law allows for more flexibility in establishing partial or complete dependency, while tax dependency requires a substantial degree of dependency.



The conditions for the existence of an interdependency and financial dependency relationship under the law can be complex. Feel free to contact us for assistance.

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