Skip to Content

Nominate a beneficiary for your super

icn-lightbulb

You can nominate who you’d like to receive your super when you die.

Why planning is important?

For many people, super represents a substantial part of their total wealth. However, super (and any life insurance held in super) doesn’t automatically form part of your estate. So just because you may already have a Will, doesn’t necessarily mean your super will pass to the people you want in the event of your death.

When you pass away, your super can be paid directly to certain eligible dependents (see below) or your legal personal representative. What’s more, you can influence who it will be paid to by completing a binding, non-binding or reversionary nomination.

What is a binding nomination?

With a binding nomination, the super fund trustee is legally required to pay your super benefits to the eligible person(s) you have nominated. It makes sure your super benefits are distributed according to your wishes and offers you peace of mind.

Some binding nominations are ‘lapsing’, which means they need to be re-submitted every three years to remain valid. Others are ‘non-lapsing’ and will continue until you either revoke or update the nomination.

What is a non-binding nomination?

A non-binding nomination is a nomination the super fund trustee is not required to follow. The trustee will be guided by what you complete in the nomination. However, they have full discretion to pay your super to another eligible beneficiary or your legal personal representative, which may not reflect your wishes.

What is a reversionary nomination?

In addition to a binding or a non-binding nomination, a reversionary beneficiary nomination can be made when you use your super to start a superannuation pension, such as an account based pension. It enables you to select who you would like to continue receiving the pension payments in the event of your death.

What happens if you make no nomination?

The trustee will decide who receives your super money after taking into account your circumstances.

Who can receive a super death benefit?

The table below summarises which beneficiaries may be able to receive a superannuation death benefit as a lump sum and pension, as well as who may receive a lump sum payment tax-free.

Summary of death benefit payment options

Beneficiary On death, which beneficiaries are eligible to receive your super as a:
Lump sum1 Tax-free lump sum Pension2
Spouse Yes Yes Yes
Child
under 18
Yes Yes Yes
Child
18-25 and financially dependant

Yes

Yes

Yes
Child
18-25 and not dependant

Yes

No

No
Child
over 25 (unless disabled)


Yes


No


No

Financial dependant
(see above for children)
Yes Yes Yes
Interdependant
(see above for children)
Yes Yes Yes

1. A lump sum payment can also be made to the estate and the tax treatment generally depends on whether it’s received by a dependant (or non-dependant) for tax purposes.


2. From 1 July 2017, there is a limit on how much super you can transfer to a retirement phase pension during your lifetime. This is known as the transfer balance cap and in 2018/19 it’s $1.6 million. This cap will be indexed in future years. Counted towards this cap would be amounts used to start a retirement phase pension from your own super account, as well as a pension that is received as the result of the death of another person. Modified rules apply when a super death benefit is paid as a pension to a child. Penalties exist for exceeding the cap.

Important things to consider

  • Death benefit nominations can generally be completed for super and account based pension accounts.
  • You should ensure your nomination is valid when you make it and review it if your circumstances change to make sure it’s still appropriate.
icn_question

What next?

Find out more about Super and retirement rules.

 

icn_chat

Got a question

Get set in the right direction with help and guidance available over the phone, online or face-to-face.

 

General advice and information only

Any advice and information on this website is general only, and has been prepared without taking into account your particular circumstances and needs. Before acting on any advice on this website you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives.

Tax disclaimer

Any general tax information on this website is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.