What happens to your super when you die?

When you die, someone close to you may need to handle your important paperwork. It can be a heavy burden at a difficult time for the people you love, so organising things before you go can really help.

What is a super death benefit?

As part of their super admin, Rest Members can tell us who they’d like their super savings to go to when they die. This payment is called a death benefit. The person (or people) they decide to give their money to is called a beneficiary.

A death benefit can be made up of:

• some, or all, of the late Member’s account balance, minus any fees and taxes, and
• any eligible insurance benefits

In most cases, it’ll be paid as a lump sum, but it can also be paid as a pension.  

Who can get a super death benefit?

1. Usually, a death benefit is paid to your valid, nominated binding, non-binding, or reversionary beneficiary. Superannuation law states that Rest can only pay a death benefit to dependants (for example, a spouse or de facto spouse, children (any age), an interdependent or someone financially dependant on a member) of the Member, or their Legal Personal Representative (executor of your estate). Rest can only pay someone else if there isn’t a dependant or Legal Personal Representative.

   2. If your loved one may have specifically named a person in a valid binding nomination, Rest will only pay the nominated person/people.

   3. Without a valid binding nomination, Rest will decide who to pay based on Superannuation Law, considering financial dependents, non-binding nominations, and next of kin.

Rest Members can review their choices anytime by logging in to their Member Access. 

What are the different types of beneficiary nominations?

Binding beneficiary nomination (Rest Super and Corporate)

As its name implies, a valid ‘binding’ beneficiary nomination is legally binding. It means you have the final say on who receives your super. You can nominate a binding beneficiary by completing the Super – binding nomination form and returning it to us.

Binding nominations for Rest Super & Rest Corporate expire after three years. A valid binding nomination must be updated within the three years to remain binding. Otherwise it will be treated as a non-binding nomination. 

Binding beneficiary nomination (Rest Pension) 

If you choose this type of nomination, Rest generally must follow your wishes. This nomination does not lapse, which means it will continue unless you change it. It’s very important for you to update your nomination if your situation changes. Otherwise, your account balance may not be paid as you would have liked. Examples of when you might need to review your nomination include getting married or divorced.

Non-binding beneficiary nomination

A non-binding nomination tells us your preference of beneficiary. It’s important in helping Rest work out who should receive your account balance and/or insurance component ( if any) on your death. 

Reversionary beneficiary nomination (Rest pension)

If you nominate a reversionary beneficiary, your nominated dependant will receive ongoing pension payments after you die. You can nominate one reversionary beneficiary when starting your Rest Pension. You can’t change or delete your nomination. You can’t nominate your legal personal representative and there are special conditions regarding nominating a child. 

Tax rules for death benefits

While who you may nominate is governed by superannuation law, the taxation of the payouts to them are determined by the Australian Tax Office (ATO). 

You can find more information from the ATO website.

If you’re a Rest member, one of our Rest Advisers can help you work through any tax complexities or questions. 

Is your super included in your will?

Super doesn’t automatically form part of your estate. But if you want to leave your super to someone who is not your dependant, or you’d rather have your super paid out to people via your will, you could nominate your Legal Personal Representative (executor of your estate). It means your super death benefit will form part of your estate and can be distributed according to your will. Before making any decisions, we recommend you get legal advice from an estate planning or family lawyer.