When bad super advice costs you citizenship
A superannuation fund member living overseas renounced to her Australian citizenship after receiving incorrect advice from her superannuation fund.
The Superannuation Complaints Tribunal (SCT) has been told that the member had received the incorrect advice as a means of enabling her to gain early access to her super balance to assist her parents still living in Australia.
A recent determination of the SCT has revealed the manner in which the woman, living overseas, had been told by a representative of the superannuation fund that she could obtain payment of her account balance in the Fund if she renounced her Australian citizenship and she, subsequently, made a claim for payment of the benefit under the Departing Australia Superannuation Payment Option.
The advice proved to be wrong and the SCT held that the superannuation fund had been guilty of "negligent misrepresentation" even though the delivery of the misleading advice had been inadvertent.
The Tribunal noted that the superannuation fund had offered to compensate the woman to the tune of $2,000 - something which she had rejected as inadequate to cover the cost of her renouncing her Australian citizenship, reapplying for her Australian citizenship and seeking visas to visit her ailing parents.
The SCT noted that the woman had claimed $85,351 but said some of those expenses such as living expenses and salaries were expenses which would have been incurred irrespective of having received incorrect advice.
"In the view of the Tribunal, the representation made by the Trustee to the Complainant was a representation that she was entitled to reasonably rely on and, in the view of the Tribunal, she relied on it to her detriment by renouncing her Australian citizenship," the SCT determination said.
"The issue that then arises is what detriment did she suffer as a direct result of the representation and for what amount should she be compensated by the Trustee by acting to her detriment?"
The SCT determined that $5,000 represented sufficient compensation to cover the expenses that the complainant would directly incur as a result of the Trustee's misrepresentation.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
