Who can receive your super when you die?

When you die your super can only be paid to your dependants, your estate or a combination of these.

When you die your super can only be paid to:

  • your dependants (and this term has a particular meaning when it comes to super – we talk about this more below),
  • your estate (where it will be dealt with under your Will), or
  • some combination.

The only time your super can ever be paid to someone else is if you don’t have any dependants and no estate is formed on your death. This is very rare.

When it comes to your super, your spouse (including a de facto or same sex partner) is always classified as a dependant.

Your children and your spouse’s children are also dependants no matter how old they are.

Two other groups of people who might be your dependants are:

  • anyone who is dependent on you in the ordinary sense (eg someone who relies on you financially to meet their usual costs of living), or
  • someone with whom you have an “interdependency relationship”. This is another term with a specific meaning. It generally includes anyone other than a spouse or child with whom you have a close personal relationship and where one or both of you provide financial support, domestic support and personal care to the other. If you think this might be relevant in your case, it’s worth checking the actual wording in the legislation.

Any of these people can receive your super when you die. It can be paid to them directly from your fund. If you want anyone else to receive it (eg a brother, sister, niece, nephew, parent, friend, charity), you should make sure your super will be paid to your estate and then distribute it under your Will.

So for most people, super is paid to their estate, spouse or children (including their spouse’s children).

When it comes to super death benefits, it’s also worth noting that not everyone can have your super paid to them as a pension. For most people, only their spouse can inherit their super this way. While minor children or children who are under 25 and still dependent on you can receive a pension from your super, they have to cash out whatever is left once they get to 25. Older children generally can’t have a pension from your super at all.

And the tax rules are different for adult, financially independent children. They must pay tax at between 15% - 30% on the “taxable component” of your super. You’ll see this amount listed on your member statement each year. In fact, if they receive your super directly from your fund, they will also pay the Medicare Levy on the taxable component of your super. Medicare doesn’t apply if they inherit your super via your estate – which is why many people structure their affairs to have their super paid to their estate if it’s going to be paid to adult children.

If you need anything, please don't hesitate to contact us.

Contact Heffron

Share now