Federal Court supports AFCA in super death benefit dispute

The Federal Court decision in Radanov v Australian Financial Complaints Authority [2026] FCA 929 reinforces that without a binding death benefit nomination in place, superannuation death benefits can be divided between surviving partners and children from previous relationships. It also highlights the limited role of the court in reviewing AFCA decisions, emphasising that trustees have significant scope to determine “fair and reasonable” outcomes. The decision by Justice Scott Goodman firmly outlines the extensive reach of trustee discretion and shows the high threshold required to overturn an AFCA determination in court. An appeal against the Australian Financial Complaints Authority over the distribution of death benefits was rejected in the Federal Court. The case, Radanov v Australian Financial Complaints Authority [2026] FCA 929, was an appeal on a question of law from AFCA setting aside the decision of the trustee of a superannuation fund to distribute the entirety of a death benefit to a deceased’s de facto partner on the basis that the trustee’s decision was not fair and reasonable. Veljko Radanov appealed a decision of the AFCA to set aside a decision of Retail Employees Superannuation Pty Ltd to distribute to Radanov the entirety of a death benefit referable to the late Ms Kylie Hrysanidis (the deceased); and decided to distribute that death benefit equally as between Radanov and each of the deceased’s three children. The facts of the case presented to the court stated that as at the date of the deceased’s death on 7 November 2021she was a member of the trust and the death benefit of $348,600 was payable under r 7 of the rules for the management of the trust which form part of the deed governing the trust. At the time of her death, the deceased’s husband – from whom she was separated – was Athanase Hrysanidis, and they had three children. In October 2022, the trustee resolved to pay the entire death benefit to Radanov. The deceased’s children disputed that decision and contended that the death benefit ought to have been split equally between them. In January 2023, the trustee determined to maintain the original decision. In February 2023, one of the deceased’s children lodged a complaint with AFCA that a decision by a “death benefit decision-maker” was unfair or unreasonable. On 30 May 2025, AFCA made its determination in which it stated that trustee’s decision was not fair and reasonable in all of the circumstances including that the deceased’s three children and Radanov were each dependants of the deceased as at the date of her death, that the children were not financially dependent upon the deceased and Radanov was only partially financially dependent and had a limited expectation of future financial support. AFCA also stated the deceased expressed a wish to provide her children with a lump sum and the trustee’s decision to pay the entire death benefit to Radanov did not adequately consider the limited nature of his expectation of future financial support from the deceased. Having reached the conclusion that the trustee’s decision was not fair and reasonable, it was open to AFCA to substitute its own decision which set aside the trustee’s decision. AFCA’s substituted decision was that the death benefit be paid 25 per cent of the death benefit to the three children and Radanov. Other matters noted by AFCA as part of its determination included that the deceased and Radanov were in a relationship and resided together from at least October 2019 and shared equally the costs of their bills and shopping. Furthermore, it noted there was financial interdependence between the deceased and Radanov and text messages between the two indicated that the deceased “considered him [Mr Radanov] to be her partner and that she was building a life with him” and consequently, it was open “to the trustee to conclude that they had a mutual commitment to shared life”. Radanov appealed to the Federal Court of Australia, arg