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What happens to super when you die?

Most of us don't like thinking about what will happen when we die. But it's important to talk with your loved ones about your super, because it's generally not included in your Will or estate.

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What happens with my super if I die?

When you die, what happens to your super and any insurance you have with your account depends on what you've told us:

  1. Your super and any insurance benefits are usually paid to the person you tell us – your beneficiary.
  2. If you haven't told us who should get your super and insurance, it's usually paid to your dependants (e.g. children or spouse).
  3. If you don't have any dependants, your super fund pays the money to your estate, and the executors of your Will deal with it (or the court may get involved if you don't have a Will).
  4. Your money is taxed differently depending on who gets it and how they want to receive the payout (e.g. all at once or using an Income account).

Why you should tell us who gets your super

Unfortunately, your super is not automatically included in your estate, and it isn't included in your Will. But if you tell us your chosen beneficiary, then when you die, we will pay out your super and any insurance benefit to them.

So make sure both your loved ones and your super fund know whom you want to be your beneficiary.

Who can be your beneficiary?

The person who should get your super and any insurance when you die is called your beneficiary. Your beneficiary can be:

  • A dependant (see below), or
  • Your legal personal representative (the executor of your Will or administrator of your deceased estate).

Your dependant includes:

  • Your spouse or de facto partner
  • Your child (includes adopted children, stepchildren and your spouse's children, under the Family Law Act 1975)
  • Someone who is financially dependent on you
  • Someone in an interdependent relationship with you, meaning:
    • You have a close personal relationship
    • You live together
    • One or each of you provides the other with financial support, domestic support, and personal care.

If you're making a reversionary beneficiary nomination, the rules are the same, except you can't nominate your legal personal representative, and if you're nominating your child, they must be:

  • Less than 18 years old
  • Between age 18-25 and financially dependent, or
  • Have a permanent (or likely to be permanent) physical, intellectual or psychiatric disability.
Find out more

 

Type of beneficiary

There are 3 different types of beneficiaries:

  1. Binding death beneficiary: You choose who should get your super if you die, and your super fund will do that, as long as it's legally valid. You need to renew your choice every 3 years.
  2. Preferred (non-binding) beneficiary: You choose who should get your super if you die, and your super fund will take that into account, after checking whether you have dependants who need the money. This choice is not legally binding.
  3. Reversionary beneficiary: You choose who should keep receiving payments from your Income account after you die, for as long as your account has money in it. You can't make your estate a reversionary beneficiary.

What type of payment can your beneficiary receive?

If you have a binding death beneficiary on your Accumulation or Income account, your beneficiary will get your account balance all at once (lump sum), including any insurance payout. If your beneficiary is a certain age or permanently disabled, they can receive the money as regular income payments.

If you have a reversionary beneficiary on your Income account, they can either choose to receive income payments from your account as long as the balance lasts, or withdraw your account balance all at once (lump sum).

Does your beneficiary pay tax when they get your super?

If someone is your dependant for tax purposes, they will get your super tax-free if they receive it all at once in a lump sum. To find the tax that applies to a super death benefit, check with the Australian Taxation Office (ATO):


Okay, what should I do next?

  • icon number 1

    Choose your beneficiary

    Fill in and send us the form to tell us who your binding death beneficiary should be. Download form

  • icon number 2

    Check your insurance

    Make sure your loved ones will be financially supported if you die unexpectedly. Log in

  • icon number 3

    Keep planning your future

    As a member, you can get financial advice and learn from our seminars and webinars. Find out more

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