Superannuation payout delays throw spotlight on ‘harrowing’ ordeal for families

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John Bothman has been locked in a battle with one of Australia’s largest funds to have his partner’s superannuation paid out after her death.

As he grieves the loss of Julie — the love of his life for half a century — he’s been forced to process mountains of paperwork and endure months of delays.

“I just want to get this finalised and just get on with my life… it’s been devastating,” he says.

Julie, a 77-year-old nurse who dedicated her life to helping others, was looking forward to travelling with Mr Bothman once he retired.

Like many nurses, her super was with one of Australia’s largest funds — Aware Super — which has more than one million members.

Aware, which manages more than $160 billion in funds, runs with the tagline “Aware Super, is super helpful” — but that wasn’t the case for Mr Bothman.

Instead, he was told by the super giant to return to the Hobart hospital where Julie died and get a second death certificate specifying her cause of death.

“I’m still at a loss as to why they needed that,” Mr Bothman says.

“To have to go back to that department where I spent the last five days [of her life] watching her die…it was a fairly harrowing experience.”

Mr Bothman’s not alone in his experience. A growing number of Australians are venting their frustrations over lengthy delays in super payouts after the death of loved ones.

Earlier this year, the ABC uncovered the shocking experiences of two widows — one left waiting more than 15 months to access their funds.

In the past financial year alone complaints over delays have more than tripled, the Australian Financial Complaints Authority (AFCA) says.

“This is a systemic issue. We are constantly contacted by people complaining [and superannuation companies] don’t get punished if they take forever,” says Xavier O’Halloran, the director of advocacy group Super Consumers Australia.

Delays despite support from lawyer

Mr Bothman’s slow payout was not for lack of trying, with his lawyers responding to Aware Super’s requests and pushing for updates.

“It’s just been very difficult trying to work out exactly what’s going on with them,” he says.

In March they sent him a letter confirming Julie had nominated him as the beneficiary for her super pension.

A detailed timeline shows 16 individual contacts and what appears to be simple mistakes like Aware sending forms to the wrong email address.

And then in August of this year — almost five months after John first made contact with Aware — they requested he fill out a new death benefit claim form which he promptly did.

His lawyer also wrote to Aware in early August requesting the claim be processed urgently.

“I called them [to ask:] ‘What was the hold-up?'” he explains.

“They told me they would give [me] urgent priority and try to get it finalised as soon as they could [but] I’ve heard nothing since.”

It was only after being contacted by the ABC did Aware Super apologise to Mr Bothman and organise his payment claim.

“There was an oversight, there’s humans involved in this process,” says Sarah Forman, Aware Super’s group executive.

Aware Super says some of the delays were due to a data migration issue as it transitioned from using a third-party contractor to dealing with such claims in-house.

Aware has also told the ABC some of the original paperwork and the first death certificate was non-compliant with the claim requirements.

Could mandatory time frames fix a ‘failed’ system?

Currently, benefits are legally required to be paid as soon as practicable, but Australia’s key advocacy group for super consumers says there should be mandatory time frames so grieving families aren’t also having to suffer serious financial stress.

“This voluntary system of dealing with claims has really failed,” Mr O’Halloran says.

“We’re talking about people who’ve had a loved one pass away that might be relying on that income in order to live [and] they’re left in the lurch for months,” he said.

Financial services lawyer Fiona Halsey agrees.

“People are just completely distressed by the process,” she says.

While a “benchmark” for time frames would be welcome, she says allowances need to be made for complex cases involving multiple family members or life insurance.

Her advice to others? Make sure all paperwork is up to date including wishes in death benefit nomination forms as these regularly expire.

In a statement, Glen McCrea, the deputy CEO for peak super industry body ASFA (Association of Superannuation Funds of Australia), says funds “have a duty to pay a late member’s benefit without unnecessary delay”.

ASFA has acknowledged the process is complex and says it supports measures to ensure payments are made as quickly as possible.

Lengthy claims avoidable, ombudsman says

There’s been a significant jump in people complaining about death benefit claims to AFCA.

“Complaints more than tripled to 257 in that category in the past financial year,” says lead ombudsman for superannuation Heather Gray.

At AFCA, Ms Gray rules on complaints about death benefit claims, but says many of them are avoidable.

“We see situations where there has been a lengthy delay and there’s really no good explanation for it other than the resourcing issue that a lot of funds and insurers have,” she says.

“So [it’s about] just having enough people working in those teams.”

Mr Bothman isn’t motivated by money. He is speaking out because he doesn’t want grieving families to go through the same experience.

“It’s totally unacceptable,” he says.

“I think about a widow relying on her husband’s superannuation, particularly someone who hadn’t worked for many years, if it took them this long or longer to be paid.”

By consumer affairs reporter Michael Atkin (Original ABC Article)