www.esuperfund.com.au

Permitted Beneficiaries


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Under a Death Benefit Agreement, you can nominate the following Beneficiaries to receive your Super Benefit on death:

 
 
Spouse

You can nominate your Spouse (includes former Spouse, DeFacto and same sex couples) to receive your Super Benefit on death as either a Pension or Lump Sum payment.

 
 
Any Child Under 18

You can nominate any Child (including an adopted or step child) under the age of 18 to receive your Super Benefit on death as either a Pension or Lump Sum payment.  It is noted that a Pension can only be paid to a Child up to the age of 25.  After that time they must take the remaining Super Benefit as a lump sum. 

 
 
Any Child aged between 18 and 25 that is Financially Dependent on you

You can nominate any Child (including an adopted or step child) aged between 18 and 25 that is Financially Dependent on you, to receive your Super Benefit on death as either a Pension or Lump Sum payment.  It is noted that a Pension can only be paid to that Child up to the age of 25. After that time they must take the remaining Super Benefit as a lump sum. 

 
 
Any Child aged between 18 and 25 that is NOT Financially Dependent on you

You can nominate any Child (including an adopted or step child) aged between 18 and 25 that is NOT Financially Dependent on you, to receive your Super Benefit on death as a Lump Sum payment only.

 
 
Any Child aged over 25

You can nominate any Child (including an adopted or step child) over the age of 25 to receive your Super Benefit on death as a Lump Sum payment only.

 
 
Any Child Permanently Disabled irrespective of age

You can nominate any Child who is Permanently Disabled (irrespective of age) to receive your Super Benefit on death as either a Pension or Lump Sum payment. 

 
 
Any Person who was Financially Dependent on you

You can nominate any Person who was a Dependent just before death to receive your Super Benefit on death as either a Pension or Lump Sum payment.

 
 
Any Person with whom you had an 'Interdependency Relationship' just before death 

You can nominate any Person with whom you had an 'Interdependency Relationship' just before death to receive your Super Benefit on death as either a Pension or Lump Sum payment. 

An interdependency relationship between two people is where:
(a) they have a close personal relationship; and 
(b) they live together; and
(c) one or each of them provides the other with financial support; and
(d) one or each of them provides the other with domestic support and personal care.

Note under the definition of 'Interdependency Relationship' if two persons satisfy the requirement of (a); but they do not satisfy the other requirements because either or both of them suffer from a physical, intellectual or psychiatric disability, then they are still classed as having an interdependency relationship.  Further, two persons will not have an interdependency relationship if one of them provides domestic support and personal care to the other under an employment contract or a contract for services or on behalf of another organisation such as a government body.

 
 
Your Estate via your Legal Personal Representative

You can nominate your Estate via your Legal Personal Representative (this is usually the Executor of your "Will") to receive your Super Benefit on death as a Lump Sum payment only. Under this option your Super Benefit will be distributed in accordance with your "Will". Importantly, a Death Benefit Agreement cannot directly specify a person other than a Spouse, child or someone financially dependent on you or with whom you have "Interdependency Relationship" with. Accordingly if you want to leave your Super Benefit to another person (eg a friend) you must nominate your Estate via your Legal Personal Representative to receive your Super Benefit when executing a Death Benefit Agreement. Your "Will" in turn allow your Super Benefit to be paid to the specified person.

 
 
Financially Dependent Definition

Superannuation Law does not define what "Financially Dependent" means, but this term is very important as it dictates who you can distribute your Super Benefit to on death and the respective taxation payable on any benefit received by the beneficiary on a Member's death.  Generally a practical approach should be applied and Financially Dependent will be taken to mean that a person relies on the Member for their financial maintenance.  This may be because they are sick or unable to work in their own capacity to sustain themselves financially.

 
 
Super Benefit as a Pension instead of a Lump Sum

Executing a Death Benefit Agreement to pay a Pension instead of a Lump Sum to a nominated beneficiary has some specific advantages over paying a Lump Sum, namely:

  • Your Super Benefit will not leave the super environment on your death.  This is very important because if it does get paid out as a lump sum, the Beneficiary may not be able to contribute it back into super again given the Contribution Limits that apply.
  • All earnings and investment growth will continue to be tax free.  If paid out as a lump sum and invested in the Beneficiaries name they will be taxed on the income and growth on the benefit received.
  • Importantly even if left as a Pension, the Beneficiary of the Pension will be able to cash out all or part of the benefit as a Lump Sum payment.  The tax implications of accessing a Pension as a Lump Sum will be the same as if the Super Benefit was received as a lump sum in the first instance.