How South African Law Protects Dependants Beyond the Marital Home
By Patrick Manyowa Pr Eng, Pr CPM, PMP, Aarb:
Attorney, Civil Engineer, and Legal Writer
1. Introduction
Many married individuals assume that only their spouses and children will inherit their assets and pension benefits upon death. Few realise that an extramarital partner, regardless of gender, who was financially dependent on them during their lifetime may legally share in their pension fund death benefits under Section 37C of the Pension Funds Act 24 of 1956, even if the relationship was adulterous and kept secret.
This legal reality has blindsided many families. Section 37C empowers pension fund trustees to distribute death benefits not strictly according to a will or nomination form but based on actual financial dependency. The result: lawful spouses may receive less, children may be sidelined, and extramarital partners may receive a substantial portion of the pension payout.
This article unpacks the legal framework, case law, and consequences of Section 37C, and offers strategies for married individuals to protect their lawful estates and families.
2.Understanding Section 37C of the Pension Funds Act
Section 37C regulates how pension and provident fund death benefits are distributed in South Africa. Its primary aim is to protect dependants of deceased members by granting trustees the discretion to allocate benefits equitably, not necessarily equally, and often in ways that differ from a member’s nomination or will.
2.1 Key Principles
•Applies only to pension fund benefits payable on death,
•Overrides the deceased’s will and beneficiary nomination,
•Trustees must allocate benefits among dependants and nominees in a fair and just manner,
•Ensures that vulnerable dependants, including those not legally related, are not left destitute.
2.2.Who Qualifies as a “Dependant”?
The Act recognises three categories of dependants:
Category
Description
Legal Dependants
Spouses, children, or others with a legal duty of support
Factual Dependants
Individuals financially dependent on the deceased, even without legal ties
Nominated Beneficiaries
Persons named by the member on the fund’s nomination form
An extramarital partner may qualify as a factual dependant if they were financially supported by the deceased, regardless of marital status, gender, or nomination.
2.3. When an Extramarital Partner (and Their Child) Qualify as Dependants
If the deceased provided regular financial support to an extramarital partner or their child, they may both be deemed factual dependants and claim a share of the pension fund.
This applies even if:
•The deceased was legally married to someone else
•The extramarital partner was not nominated as a beneficiary
•The child is not biologically related to the deceased
2.4.Applicability to Foreign marriages
Although Section 37C applies uniformly to all South African pension funds, it is important to note that the marital status of the deceased, particularly where the marriage was concluded outside South Africa, does not exempt the trustees from their statutory duty.
For example, marriages solemnized in Zimbabwe, whether civil or customary, are generally recognised under South African law if valid in terms of Zimbabwean legal requirements. The matrimonial property regime applicable to such marriages (typically out of community of property) is determined by the domicile of the husband at the time of marriage, but this regime does not bind the trustees when allocating death benefits. What matters under Section 37C is not the origin of the marriage, but whether the surviving spouse or partner qualifies as a legal or factual dependant. A Zimbabwean spouse residing in South Africa may therefore be considered a dependant if they were financially supported by the deceased, regardless of whether the marriage was registered locally or governed by foreign patrimonial rules.
2.5.Example
If Alex, a married individual, pays rent, groceries, and school fees for Tshepiso (an extramarital partner) and Jordan (Tshepiso’s child), and then passes away, Tshepiso and Jordan may claim against Alex’s pension fund.
If Alex’s lawful spouse and children then claim the full benefit, the trustees are legally required to consider Tshepiso and Jordan’s dependency and allocate the benefit equitably, potentially reducing what the lawful family receives.
3.Case Law Discussion
Several South African cases have clarified how trustees must apply Section 37C, especially in situations involving extramarital partners or factual dependants.
In the case of Mngadi v Beacon Sweets & Chocolates Provident Fund [2004] 3 BPLR 4643 (PFA), the deceased maintained a long-term extramarital relationship. Despite not being a legal spouse or nominee, the partner was deemed a factual dependant. The
Pension Funds Adjudicator emphasized that actual financial dependency is the key determinant, not legal or moral entitlement.
similarly, in the case of Mashazi v African Products Retirement Benefit Provident Fund 2003 (1) SA 629 (SCA), the court upheld the trustees’ discretion to allocate benefits to a partner in a customary marriage not legally registered. Financial dependency was sufficient to qualify as a dependant.
In the case of Paixão v Road Accident Fund 2012 (6) SA 377 (SCA), though not a pension fund matter, the court recognised a long-term cohabitation partner as a dependant for loss-of-support claims. This case has influenced how trustees assess factual dependency.
In Buthelezi v Ndaba and Others [2016] ZAGPPHC 79, the High Court upheld a pension fund’s decision to allocate benefits to a partner who had lived with and been supported by the deceased for years, despite the deceased nominating only their children.
These cases confirm that South African law prioritises actual dependency over marital status or moral considerations. If credible evidence shows consistent financial support, trustees may lawfully allocate benefits, even at the expense of legal heirs.
4. Why Section 37C Applies Only to Pension Funds
Section 37C does not apply to the rest of the deceased’s estate (e.g. property, savings, shares). These are governed by:
•The Intestate Succession Act (if no will exists)
•The Wills Act (if a valid will exists)
4.1. Implication
•An extramarital partner cannot inherit your house, car, or bank savings unless explicitly mentioned in your will
•But they can claim from your pension fund if they prove dependency
This creates a two-tier problem: the family may control the estate, but the pension fund benefit may be diverted by trustees based on dependency claims.
5. Prevention: How to Protect Your Lawful Beneficiaries
5.1. Terminate Support in Writing
End financial support to extramarital partners in clear, dated documentation.
5.2. Cut Financial Ties
Cancel access to bank accounts, debit cards, or leases that suggest dependency.
5.3. Keep Proof of Support Ending
Maintain letters, bank statements, or affidavits showing support ended long before death.
5.4. Update Nomination Forms
Regularly revise pension fund nomination forms and explain your reasons clearly.
5.5.Consider Alternative Investments
Pension benefits fall under Section 37C and are outside your executor’s control. Instead, place surplus funds in:
•Tax-Free Savings Accounts (TFSA)
•Endowment Policies (with fixed beneficiaries)
•Unit Trusts or Discretionary Investments
•Fixed Deposits or Trusts
These are not governed by Section 37C and will follow your will or beneficiary instructions.
6. Consult an Estate Planning Attorney
Draft or update your will with professional guidance. Ensure your marriage regime, trusts, and investment structures reflect your wishes.
7. Conclusion
Section 37C of the Pension Funds Act is a well-intentioned but far-reaching provision. It protects dependants but can inadvertently empower extramarital partners to claim against a married individual’s pension benefits.
If someone financially supports an extramarital partner and/or their child and passes away, pension fund trustees may legally allocate part of the death benefit to that partner, even without a will or nomination, potentially at the expense of lawful spouses and children.
This article should serve as a wake-up call. Your pension fund is not necessarily under your control after death. If you fail to act, your private affairs may become your family’s public and financial nightmare.