When you die, your super gets left behind. It usually gets paid as a lump sum or a series of regular payments, called an income stream, to a dependant.
This is known as the ‘super death benefit’.
If you haven’t nominated anyone to receive your super death benefit, or you made what’s called a non-binding nomination, it’s up to your super trustee to decide who gets your super.
So if you want control over where your super goes once you die, your best bet is to submit a binding death benefit form.
What’s a binding nominee?
If you name someone as a binding nominee, it means that as long as the rules are followed, and it’s valid under superannuation law, they’ll get your super no matter what.
The rules include things like your binding nomination being in writing and witnessed by two people over 18 who aren’t also nominated beneficiaries.
What’s a non-binding nominee?
If you name someone as a non-binding nominee, it tells the trustee what you want to happen, but there are some circumstances in which it can be discounted, such as if you’ve since become married or separated.
What if you don’t name anyone?
Generally, there are rules about who gets your super if you haven’t named anyone, no matter who your super fund trustee is.
The trustee can decide to pay it to a dependant, or if you don’t have any dependants, then they can pay your legal personal representative.
Who counts as a dependant?
Under super law, your dependants are counted as people who, at the time of your death, are:
- Your spouse or de facto
- Your child of any age
- Someone who’s in an interdependency relationship with you, which means you have a close, personal relationship, live together, one or both of you gives the other financial support, and one or both of you gives the other domestic support or personal care.
What if you want your super to go to someone else?
Generally, if you want to leave your super to someone who isn’t a dependant, you need to ask your super fund about making a binding death benefit nomination, so your super goes to your legal personal representative.
What about tax?
Unless the person who gets your super is your dependant, and they get it as a lump sum, they’ll generally need to pay tax on it. The amount depends on tax law.
What if you have kids?
If you have kids, and you’ve nominated them as your binding beneficiaries, they’ll get your super if you die. If you haven’t nominated them as your binding beneficiaries, your super fund has discretion as to who will receive your death benefit.
What if you have a partner?
Same deal. If you’ve nominated them as your binding beneficiary and it remains valid, they’ll get your super if you die. If you haven’t nominated them as your binding beneficiaries, your super fund has discretion as to who will receive your death benefit.
How do you nominate your beneficiaries?
Get in touch with your super fund. If you’re a Spaceship customer, you can update or review your beneficiaries. Just visit the Spaceship app to get started.
