SCT Quarterly - Q1 2018

Chairperson's welcome

Welcome to SCT Quarterly.

This quarter, we are taking a different approach with this publication. Instead of framing our content around one of our complaint categories, we're using this opportunity to update you on the changes and challenges facing the Superannuation Complaints Tribunal (SCT).

The Government has announced details of the commencement of the Australian Financial Complaints Authority (AFCA). You can read more about those announcements in our focus section below. SCT has been funded through to 30 June 2020, including additional funding provided in MYEFO 2017-18, allowing for an increase in our operations to support the resolution of all complaints.

At 31 March 2018, we had 1,833 open complaints. The Minister for Revenue and Financial Services has announced that SCT will continue to accept complaints until 31 October 2018, before AFCA starts to accept complaints on 1 November 2018.

As we increase our operations, we are reviewing our processes. You'll be hearing from us in relation to open complaints in an effort to resolve as many of these complaints as possible. Increased engagement in relation to death benefit complaints with a potential anti-detriment payment has already commenced and is discussed in more detail in the focus section below.

Given the importance of resolving complaints by 30 June 2020, we thought it timely to provide tips for successful conciliation conferences. These tips may also prove useful for approaching internal dispute resolution.

We hope you enjoy this edition of SCT Quarterly. If you have any feedback, suggestions or queries, please send them through to us at

Helen Davis, Chairperson


Q1 2018 focus: changes at SCT

There is a lot going on in the superannuation industry at the moment. We are following the Royal Commission with interest, with banking and financial planning firms the current focus. Insurance also remains in the spotlight, with the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the options for greater involvement by private sector life insurers in worker rehabilitation and the release of the Insurance in Superannuation Voluntary Code of Practice.

The introduction of the Australian Financial Complaints Authority (AFCA) and the impact on SCT remains our key focus, with key developments this quarter.

Introduction of the Australian Financial Complaints Authority

AFCA was announced in the 2017 Federal Budget. Legislation passed parliament in February 2018, and Royal Assent was granted in March.

On 1 May, the Minister for Revenue and Financial Services announced that Australian Financial Complaints Limited has been authorised to operate AFCA. AFCA will replace SCT, the Financial Ombudsman Service and the Credit and Investments Ombudsman.

Further details of the transition were confirmed in the same announcement. SCT will continue accepting complaints until 31 October. AFCA will then commence accepting complaints on 1 November. There will be no transfer of complaints between SCT and AFCA, and complaints that are withdrawn from SCT will not be able to be relodged with AFCA. SCT will continue to operate beyond AFCA's commencement to resolve our existing complaints.

Financial firms are required to become members of AFCA by 21 September 2018. AFCA will, in the coming months, outline the process for applying for membership.

In February, Helen Coonan was announced as the inaugural Chair of AFCA, and further appointments have been announced in the past week.

You can read all about AFCA and these Treasury announcements in our Latest News item. You can also read a media release from ASIC here, and visit AFCA's website here.

Closure of the Superannuation Complaints Tribunal

Closing SCT is not a simple matter. SCT will continue to accept complaints until 31 October, and AFCA will start to accept complaints on 1 November 2018. SCT will continue to operate beyond AFCA's commencement to resolve existing complaints. While some would describe these activities as winding down, we will in fact be temporarily building up. We will be recruiting and training staff to help clear our complaint load. We will be reviewing our website to provide the information current and future complainants need to know how to complain, when to complain, and where to take that complaint.

And as the focus of SCT shifts from being the external dispute resolution scheme for superannuation to resolving the existing complaint load, we will be planning how to best use resources to help us resolve those complaints. We will continue to keep you informed throughout this period of change.

Complaint priorities: anti-detriment payments

Many of our open death benefit complaints remain potentially eligible for an anti-detriment payment, and more continue to come in. As of 1 July 2017, anti-detriment provisions in the Income Tax Assessment Act 1997 were abolished.

Superannuation funds may claim a deduction for an anti-detriment payment as part of a death benefit if a fund member has died on or before 30 June 2017. The fund has until 30 June 2019 to pay the benefit. Funds cannot include anti-detriment payments as part of a death benefit if the member died on or after 1 July 2017.

We have identified our current anti-detriment death benefit complaints, and increased our engagement with the trustees most affected. To assist with the resolution of these complaints, please respond to our queries in a timely fashion. (And don't feel that you have to wait for us! This is a great opportunity to get on the front foot and pilot your referral back to internal dispute resolution practices before AFCA commences.)

Of the death benefit complaints with anti-detriment payments that we have resolved so far, 16% of complaints within jurisdiction were withdrawn prior to conciliation. Of those that then proceeded to conciliation, more than 70% were resolved at this stage. This is a positive outcome, and we'd like to see this trend continue.

Tips for successful conciliation

At SCT, a successful conciliation conference is one in which a resolution is reached by the parties in attendance. To increase your chances of a successful conciliation conference, we recommend doing the following:

  • Make sure the representative attending the conference has the authority to settle.
  • Familiarise yourself with the details of the complaint, the trust deed and, if relevant, the policy and any medical evidence.
  • Be empathetic. You may think that a member doesn't meet policy definitions, but that doesn’t mean they're not unwell. Similarly, you may think that someone has no legal right to a death benefit, but that doesn't mean they're not grieving and hurt.
  • Keep the legal speak to a minimum. Complainants are often unrepresented, and may simply be trying to understand the system that they feel has failed them. Try to explain your reasoning rather than intimidate with technical talk.


SCT by the numbers Q1 2018

In Q1 2018, we resolved 486 complaints.

Types of complaints resolved Q1 2018 – top ten

Type of complaint


Death benefit distribution


Deduction of insurance premiums


Account balance


TPD benefit – declined on medical evidence


TPD benefit – delay in making a decision


Fees and charges


Delay in transfer/rollover of benefit


Insurance cover in dispute


Financial hardship


TTD benefit – declined on medical evidence


TPD benefit – amount in dispute


18% of the complaints were finalised at review stage (in other words, with a determination by the Tribunal). The remaining 82% of complaints were finalised and/or resolved by our staff at various stages of the complaint resolution process.

37.7% of finalised complaints were found to be out of jurisdiction. 24.3% of finalised complaints were withdrawn by the Tribunal, and 9.1% were resolved after the holding of a conciliation conference.

In Q1 2018, we received 566 complaints.

Types of complaints received Q1 2018 – top ten

Type of complaint


Death benefit distribution


Deduction of insurance premiums


Account balance


TPD benefit – declined on medical evidence


Delay in transfer/rollover of benefit


Insurance cover in dispute


Fees and charges


Financial hardship


Administration error


TPD benefit – delay in making a decision


In Q1 2018, the SCT received a further 5,671 enquiries by telephone and email.


Case study 1: Concessional contribution confusion

Full determination available here: D17-18\092 [2017] SCTA 177 (19 December 2017)


The member held two accounts with the trustee, and had a history of making personal contributions by withdrawing funds from a transition to retirement (TTR) account and then making a contribution to his accumulation account so that he could claim a tax deduction for those personal contributions. In the 2013-14 financial year, the member withdrew funds from his TTR account and made a contribution to his accumulation account.

In order to claim the tax deduction, the member was required to submit a notice of intent to claim a tax deduction with the fund within a certain timeframe (Income Tax Assessment Act 1997, section 290.170). The fund did not receive such a notice, and the member was unable to claim a tax deduction for the $185,000 in personal contributions for that year.

In the 2014-15 financial year, the member attempted to again withdraw a substantial sum of money from his TTR account to make the contribution. After experiencing a delay and calling the contact centre, the member opted to instead roll the funds over to the accumulation account. As this transaction was classified as a rollover and not a contribution, he was unable to claim a tax deduction for the amount.

Complaint: The member brought two complaints to the SCT, seeking these resolutions:

  • That the trustee revise the tax treatment of the contribution made during the 2013-14 financial year; and
  • That the trustee compensate the complainant for the tax deduction he missed out on by rolling his funds directly from one account to the other in the 2014-15 financial year.

He stated that a modus operandi had been established for at least six years and, given the member's history, it seemed unreasonable that the trustee did not question the absence of a concessional contribution.

Further details: The trustee advised that, as it did not receive the notice of intent to claim a tax deduction, it could not treat the 2013-14 contribution as a concessional contribution. The trustee was under no obligation to communicate to the member that he needed to submit a notice of intent to claim a tax deduction; in fact, the member was familiar with the process and should have been aware of the need to lodge the form by the deadline.

The trustee also provided a transcript of the telephone conversation the member had with the contact centre in 2014-15. The transcript demonstrated that while there may have been a misunderstanding between the contact centre representative and the member as to what the member was trying to achieve with the withdrawal, the representative did not make any false or reckless statements to the member.

Decision: The Tribunal was not persuaded that the trustee had an obligation to advise the member that he needed to submit a notice of intent within the relevant statutory timeframe in these circumstances, and determined that the trustee had acted fairly and reasonably in respect of the 2013-14 complaint.

The Tribunal was also not persuaded that the trustee, via the contact centre representative, made any false or reckless statements to the member in respect of the 2014-15 complaint.

The Tribunal affirmed the decisions of the trustee.


Case study 2: No guarantee on superannuation guarantee refund

Full determination available here: D16-17\196 [2017] SCTA 84 (29 June 2017)

Background: The member had been employed between March 2010 and March 2015, and the employer made superannuation guarantee (SG) contributions on behalf of that member during that period.

When the member left the employment, the employer provided a statutory declaration to the trustee requesting a refund of the SG contributions it had made for the member over the five years of employment. It stated that they had been made in error, as the employment contract between the member and the employer had not included a provision for SG contributions.

The trustee obliged with the request, refunding the SG contributions to the employer from the member's account.

Complaint: The member brought a complaint to SCT, seeking that the amount withdrawn from her account be returned to it. She stated that the trustee had made a unilateral decision to deduct the disputed amount without her consent based on no further evidence than the employer's statutory declaration.

Further details: The employer advised that they had no SG obligation as payment was made to a partnership, and that the contributions had been made in error.

The trustee classified this error as an 'administrative error' or a mistake of fact, and therefore refunded the contributions.

The trustee also advised that the member had not provided evidence to allow the trustee to reassess its decision.

Decision: The Tribunal was not satisfied that the error could be classified as an administrative error, as it was not a one-off error but one in which the contributor had 'acknowledged the validity of the contribution at the time it was made'. It also considered that even if it could be classified as an administrative error, the trustee had an obligation to seek probative evidence before refunding the contributions.

The Tribunal decided that it was not fair and reasonable for the trustee to refund the SG contributions to the employer based solely on the statutory declaration. The Tribunal set aside the decision of the trustee and substituted its own decision that the trustee reimburse the member's superannuation account by the amount it had refunded to the employer effective at the date at which they had been deducted from her account.


Case study 3: Right recipient, wrong definition

Determination available here: D16-17\150 [2017] SCTA 39 (23 March 2017)

Background: The deceased member was 22 years old at the time of his death. He was engaged, and had jointly purchased a home with his fiancée as they prepared for their wedding. He died intestate.

The trustee paid the death benefit arising on the death of the deceased member to the fiancée as 'de facto'.

Complaint: The father of the deceased member brought a complaint to the SCT, initially seeking that the death benefit be paid to him as father. He subsequently obtained letters of administration and became the legal personal representative of the deceased member's estate, and sought that some or all of the benefit be paid to the estate.

He stated that the deceased member and the fiancée were not in a de facto relationship as they did not live together. He also speculated that the deceased member had been reconsidering his relationship with the fiancée, and that people close to the couple had little confidence of the relationship lasting.

Further details: The trustee maintained the view that the deceased member and the fiancée were in a de facto relationship at the time of death. The trustee pointed to evidence of joint ownership of a property and a joint mortgage and bank account, shared expenses and a commitment to move into the joint property together once married. The fiancée was the only person who, at the date of death, had an expectation of regular and ongoing direct financial support from the deceased member.

The fiancée confirmed that the wedding was still to go ahead, and that the wedding reception venue confirmed the booking for a date less than three months out from the date of death of the deceased member. She also advised that the deceased member's parents had consented to tissue being extracted from the deceased member for the purpose of allowing her to attempt to conceive his child, indicating that they believed the relationship was intact at the date of death.

Decision: The Tribunal determined that the fiancée met the definition of dependant under the trust deed. It noted that the trust deed included a test for 'spouse' and not for 'de facto', but found that it was not necessary to determine if the fiancée was to be considered the spouse.

The Tribunal set aside the decision to pay the entire benefit to the fiancée as de facto and substituted the decision that the trustee pay the entire benefit to the fiancée as a dependant of the deceased member.


Feedback and contact us

We are constantly seeking to improve our services and the information we provide to consumers, trustees and industry, and we need your feedback to do it.

If you have any feedback on this edition of SCT Quarterly, or any queries or suggestions, please email with 'SCT Quarterly – Q1 2018' in the subject line.

Superannuation Complaints Tribunal
Melbourne VIC 3000

1300 884 114