The federal government has proposed reforms to stop perpetrators of family violence from accessing their victims’ superannuation death benefits.

Death benefits include a member’s account balance and any life insurance proceeds from policies held within the fund.

Financial Services Minister Daniel Mulino said: “There are too many instances where superannuation trustees are bound to provide benefits to the perpetrators of abuse.

“A prominent example in WA was Molly Wilkes, who died by suicide, and the perpetrator of abuse over a long period of time against her was provided benefits by the trustees, and that’s a loophole that we want to shut.”

Changes under consideration include establishing a forfeiture-like rule and three policy options: broad trustee discretion; prescribed approach; and referral to deceased estate or a court.

At present, fund trustees may have no option but to distribute super to a beneficiary who has perpetrated family violence against a member.

“This is because superannuation death benefits are generally paid under superannuation law and a fund’s governing rules, and circumstances such as the existence of a valid binding nomination or prescriptive governing rules may limit the trustee’s ability to take account of allegations of family and domestic violence,” a consultation paper says.

The forfeiture-like proposal would disentitle beneficiaries from receiving death benefits and would not apply to other classes of asset, including those dealt with through an estate.

As the forfeiture rule exists predominantly in common law, its scope and application are determined through judicial interpretation and precedent.

“Through this consultation, the government is considering whether there is merit in creating a set of rules in relation to superannuation death benefits that would have a similar effect to the forfeiture rule,” the paper says. “Doing so would provide clarity to trustees in cases involving murder and manslaughter, including those where family and domestic violence was a factor in the crime.”

The Super Members Council says it welcomes the public consultation.

“We look forward to working with government, regulators and family violence experts to help deliver reforms that are strong, practical and fair, while providing trustees with clear legal certainty to act in the best interests of members,” CEO Misha Schubert said.

Consultation closes on April 15. Find the paper here.