Superannuation Death Benefits

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When you die, your super balance can be paid to a dependent, like your partner or children, or a non-dependent.

Typically, only a dependent has the choice to receive your super as an income stream or a lump sum. Generally, only a lump sum can be paid to non-dependants.

How to secure your super death benefit

The best way to make sure your death benefit goes to the right person is to fill in a binding death benefit nomination inside your super fund. You can nominate your partner, children or your estate.

A binding nomination is different to a non-binding nomination because your super fund must pay your super balance to the person you choose in binding nomination.

Generally, you can make a binding nomination in writing, by completing the appropriate form and sending it to your super fund. These forms are valid for three years.

How are super benefits taxed?

The tax on super payments varies depending on who receives it (e.g. are they a dependent or non-dependent?), how it is paid (e.g. is it a lump sum or income stream?) and your’s and their age (e.g. are you both over 60?).

If you are over 60 with a “taxed fund” and the benefit is paid to a spouse or dependent child, the payment could be tax free.

If you stand to receive another person’s super, you should consult a licensed tax agent to determine if any tax is payable.

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Owen Raszkiewicz

Owen Raszkiewicz

Owen is the Founder of Rask Australia, Lead Investment Analyst for Rask Invest and head educator at Rask Education. Prior to founding Rask, Owen was an investment analyst at the highly regarded managed funds research business Zenith Investment Partners and a Writer/Analyst for The Motley Fool Australia. Owen’s formal qualifications include a Master of Applied Finance and Master of Financial Planning from Kaplan Professional, Bachelor of Technology (Information Systems) from Swinburne University of Technology, Advanced Diploma of Financial Services (Financial Planning) and Diploma of Mortgage Broking Management. He's also completed level 1 of the Chartered Financial Analyst (CFA) program.

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