Basics about Super – Super and Death Benefits – how does it work? (Super Death Benefit)

Basics about Super – Super and Death Benefits – how does it work? (Super Death Benefit)

Basics about Super – Super and Death Benefits – how does it work? (Super Death Benefit)

The Australian Tax Office (ATO) confirms that super is not part of a person’s estate (usually), and the Trustees who control and run a super fund or Self-Managed Super Fund (SMSF), determine where the money goes.

The ATO site tells us –

Superannuation (super) doesn’t generally form part of a deceased person’s estate unless the trustee of the super fund pays it to the estate under the terms of the trust deed and the super rules.

In most cases, when a person dies their super fund will pay their remaining super to the person they have chosen as their nominated beneficiary. Super paid after a person’s death is called a ‘super death benefit’.

If there are no binding death nominations, the trustee of the super fund will decide how the benefit will be paid depending on the trust deed and super law. If the super fund trustee pays it to the deceased estate, the executor will deal with it as part of the estate.

If you believe you’re the beneficiary of a deceased person’s super or are the executor of a person’s estate, you should contact their super fund to let them know that the person has died, and ask them to release the super. If you don’t know the details of the deceased person’s super, you can Check your super look for their accounts.

The tax treatment of a super death benefit depends on whether the:

  • Person receiving the benefit is a dependant or non-dependant of the deceased person, and
  • Benefits are received as a lump sum or income stream.

If you receive a death benefit as the executor of a deceased estate, the estate pays tax on behalf of the beneficiaries of the super on the same basis as would have applied if the payment was paid directly to the beneficiary, excluding the Medicare levy.

And other links and info on the ATO page are –

Got questions? If you want experts who have years of helping others, without the hype – then call for a FREE strategy session today and also get your FREE Expert Guide – Self-Managed Super and Youtop right hand side above.

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If you have any questions, why not give us a call – it’s FREE also! No obligation. 0407 361 596, Paul.


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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