𝐖𝐡𝐚𝐭 𝐡𝐚𝐩𝐩𝐞𝐧𝐬 𝐭𝐨 𝐲𝐨𝐮𝐫 𝐬𝐮𝐩𝐞𝐫𝐚𝐧𝐧𝐮𝐚𝐭𝐢𝐨𝐧 𝐰𝐡𝐞𝐧 𝐲𝐨𝐮 𝐝𝐢𝐞?

Your executor should advise your superannuation fund of your passing. The super fund will now need to payout the superannuation balance. However, a super fund can only pay a benefit to a superannuation death beneficiary, they are:

▪️ Your spouse

▪️ Your children

▪️ Interdependent (lives and share a close relationship, financial and domestic dependency)

If you don’t have any of these, your superannuation benefit is paid to your Legal Personal Representative, i.e. your estate.

𝐏𝐥𝐞𝐚𝐬𝐞 𝐧𝐨𝐭𝐞: superannuation is not included in a deceased person's estate or will unless there are no superannuation death beneficiaries and it will go to the estate. You can nominate who is the beneficiary of your superannuation and your super fund is obliged to follow these wishes.

When the super fund is paying the benefit, tax can be deducted. The amount of tax is dependent on two things.

𝐂𝐨𝐦𝐩𝐨𝐧𝐞𝐧𝐭𝐬 𝐨𝐟 𝐒𝐮𝐩𝐞𝐫𝐚𝐧𝐧𝐮𝐚𝐭𝐢𝐨𝐧: Tax-Free, Taxed element or Untaxed element.

𝐁𝐞𝐧𝐞𝐟𝐢𝐜𝐢𝐚𝐫𝐲: dependent or non-dependent

For example, if your spouse passed away. You are their superannuation death beneficiary and dependent, if they nominate you to receive the super entirely, they only have the taxed element of superannuation, there is no tax payable, and no tax will be deducted by the superannuation fund.

However, if it was your father, you are over 18 and classified as non-dependent, using the same details above, you could have tax deducted at 17% (capped). You will also need to include this benefit payment on your personal tax return.

If the deceased person was already receiving a superannuation pension, they could have nominated a person (superannuation death beneficiary) to continue to receive that pension on their passing. This is separate to the estate of the deceased person.

It pays to plan for your death!