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New considerations to decide if an "interdependency relationship" exists

Dec 2005
A new regulation has been introduced which details the matters to be taken into consideration when determining whether an 'interdependency relationship' exists. The Cleardocs SMSF Deed automatically captures these changes because it adopts the definition of 'interdependency relationship' as contained in the SIS Act.
Julian Smith and Jacqueline Partridge
 

At present, the definition of an "interdependency relationship" is when two persons (whether or not related by family) have a close personal relationship, live together and one or each of them provides the other with financial and domestic support and personal care. [1]

New considerations

Now the following matters are to be considered in determining whether two persons have an interdependency relationship [2] :

  1. All the circumstances of the relationship, including:
    • the duration of the relationship;
    • whether or not a sexual relationship exists;
    • the ownership, use and acquisition of property;
    • the degree of mutual commitment to a shared life;
    • the care and support of children;
    • the reputation and public aspects of the relationship;
    • the degree of emotional support;
    • the extent to which the relationship is one of mere convenience; and
    • any evidence suggesting that the parties intend the relationship to be permanent; and
  2. The existence of a statutory declaration signed by one of the persons to the effect that the person is, or (in the case of a statutory declaration made after the end of the relationship) was, in an interdependency relationship with the other person will also be considered.

When an interdependency relationship will be "deemed to exist"

Independently of section 10A, two persons will be deemed to have an interdependency relationship in any of the following situations:

  1. If they:

    • have a close personal relationship, live together and one or each of them provides the other with financial support; and
    • one or each of them provides the other with support and care of a type and quality normally provided in a close personal relationship, rather than by a mere friend or flatmate; or
  2. If they have a close personal relationship but do not meet the other requirements for an interdependency relationship purely

    • because they are temporarily living apart; or
    • because either or both of them suffer from a disability

    Employment exception However, two people will not be deemed to have an interdependency relationship if one of them provides domestic support and personal care to the other:

    • under an employment contract or a contract for services; or
    • on behalf of another person or organisation such as a government agency, a body corporate or a benevolent or charitable organisation.

[1] Section 10A(1) of the Superannuation Industry (Supervision) Act 1993.
[2] Regulation 1.04AAAA of the Superannuation Industry (Supervision) Regulations 2005.

 
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