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Super and estate planning

No rollovers of death benefits to accumulation

Section: 14.14

Because of the ongoing requirement that death benefits be cashed, it is not possible to commute and rollover a death benefit income stream to accumulation from 1 July 2017.

Transfer balance cap considerations

Clients will need to carefully consider the impact of receiving a death benefit income stream on their transfer balance account. All death benefit income streams count towards the beneficiary's transfer balance cap, however a deferral period of 12 months applies to reversionary income streams.

Where a client exceeds their transfer balance cap as a result of receiving a death benefit income stream, they must commute an amount from a retirement phase income stream. With death benefit income streams unable to be rolled back to accumulation phase, clients wanting to maximise the amount of benefits held within super should consider commuting the excess from other (non-death benefit) retirement phase income streams, as these commutations can be rolled to accumulation phase.

Because the deceased member's superannuation interest remains subject to compulsory cashing under SIS it cannot be mixed with the beneficiary's own superannuation interest.

Last modified: Wednesday, May 1, 2019