First State Super Logo

Home

Super and estate planning

Form in which death benefits may be cashed

Section: 14.5

Benefits may be cashed in any one or more of the following forms:

  • a single lump sum
  • an interim lump sum (not exceeding the amount of the benefits ascertained at the date of death) and a final lump sum (not exceeding the balance of the benefits as ascertained in relation to the member's death)
  • one or more pensions (subject to restrictions)
  • rollover for the purchase of one or more annuities (subject to restrictions).

Restrictions on death benefit pensions and annuities
A deceased member's benefits may only be paid in the form of pension or annuity to a dependent beneficiary of the member (subject to certain restrictions for children).

An eligible recipient's transfer balance cap may also restrict the amount of super death benefit that can practically be taken as an income stream.

Additional eligibility requirements for children to receive death benefit income stream

In addition, a child of the deceased member can only receive a death benefit as a retirement phase income stream if, at the time of death, they are:

  • under 18, or
  • under 25 and financially dependent on the member, or
  • have a prescribed disability.

Where a child does not meet the above requirements, they must receive any superannuation death benefit as a lump sum.

Children who are eligible to, and do receive, a death benefit as a retirement phase income stream, must cash any remaining benefits as a (tax free) lump sum on the earlier of:

  • the day on which the annuity or pension is commuted, or the term of the annuity or pension expires, and
  • the day on which the child attains age 25 unless the child has a prescribed disability.

Transfer balance cap restrictions on death benefit income streams

An eligible recipient's transfer balance cap may also restrict the amount of super death benefit that can practically be taken as an income stream.

Last modified: Wednesday, July 24, 2019