Superannuation after a death

When someone dies, their super balance is paid out as a death benefit — but not through the will. The super fund’s trustee decides who receives it. In most funds, that decision is based on a beneficiary nomination the member made while alive.

• Binding nomination — the fund must pay the death benefit to the nominated person(s), as long as the nomination is still valid and to an eligible dependant
• Non-binding nomination — the fund treats the nomination as a preference but can still exercise discretion
• No nomination — the trustee decides based on their own assessment of dependants

Super law has its own definition of dependant, which is narrower than you might think. Eligible dependants generally include:

• Spouse or de facto partner (including same-sex)
• Children (including adult children in some cases)
• Financial dependants — people who relied on the deceased for financial support
• A person in an interdependency relationship (living together, emotional support, shared finances)

The “legal personal representative” (usually the executor of the estate) is another pathway — the super can be paid to the estate and then distributed under the will.

Death benefits paid to a tax dependant (usually a spouse or minor child) are generally tax-free. Benefits paid to a non-tax dependant (often an adult child) can attract tax on the taxable component — sometimes 15% or more.

This is one of the most important reasons to get independent financial advice before claiming a death benefit, especially on larger accounts.

Call each super fund’s bereavement team. They will send you a death benefit claim form and tell you what documents they need (usually a certified copy of the death certificate, ID, and sometimes a statutory declaration). The process typically takes weeks to months.

There is a phone script for calling a super fund.