Court decision reaffirms protections around super

Nodrog · 11th Aug, 2016

Court decision reaffirms protections around super
MIRANDA BROWNLEE
- Thursday, 11 August 2016

A recent court decision, on a case involving bankruptcy and the death benefits of a deceased super member, has reaffirmed the protections super holds in relation to creditors and bad debts.

Speaking to SMSF Adviser, DBA Lawyers director Bryce Figot said in this particular case, Trustees of the Property of Morris (Bankrupt) v Morris (Bankrupt) [2016] FCA 846, a bankrupt widow, Debbie Morris, had received two payments from her deceased husband’s superannuation.

After becoming bankrupt, Ms Morris received two payments including a $45,392.48 payment from AustSafe Super and a payment of $67,240.27 from Plum Super.

Mr Figot said the two liquidators and registered trustees, who were appointed as the trustees of her bankrupt estate, took Ms Morris to the Federal Court, claiming that the AustSafe Super and the Plum Super payments should be paid to her creditors.

What is really interesting about this is that [while] we know that if a person goes bankrupt and the bankrupt person then receives a lump sum from super, then we know it’s protected. What we don’t know is that if a person dies and their super benefits are paid out to someone else, who themselves are bankrupt, does the protection stand?”

The Federal Court ruled in favor of Ms Morris in its decision and against the bankruptcy trustees, said Mr Figot.

is quite a victory or affirmation for the kinds of protections that super gets from bankruptcy, including not just where the member goes bankrupt, but where a member is dead and it is getting paid to someone else such as a spouse, whose bankrupt,” he said.

“It’s a very positive decision for superannuation I feel.”

Court decision reaffirms protections around super
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Court decision reaffirms protections around super

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Court decision reaffirms protections around super

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