What happens to your super if you die?

Most of us don’t like talking about death or thinking that someone close to us is going to pass away one day. It may feel especially awkward talking about finances. But it’s helpful for loved ones to be more prepared and know what to expect in case something unexpected happens to you.

What happens if I die?

  • When you die, your super and any insurance benefit you have with your super is usually paid to your dependants.
  • If you don’t have any dependants, it’s paid to your estate and will be dealt with according to your will or by the legal rules for those who die without a will.
  • Death benefits may receive different tax treatment, depending on who receives the benefits and how it is paid.

Who is a dependant?

Dependants eligible to receive your super benefit include:

  • your spouse (including de facto and same-sex couples)
  • your children (including natural-, step- or adopted children of your spouse)
  • a person financially dependent on you at the date of death
  • an interdependant (see below)

An interdependent relationship exists if:

  • two people have a close personal relationship; and
  • they live together; and
  • one or each of them provides the other with financial support; and
  • one or each of them provides the other with domestic support or personal care.

An interdependent relationship also exists if two people have a close personal relationship and the reason the other requirements aren’t satisfied is because either or both of them suffer from a physical, intellectual or psychiatric disability.

Dependants for tax purposes

The definition of 'dependant' is different for tax purposes, and includes:

  • spouse or former spouse (including de facto and same-sex couples)
  • child under 18
  • financial dependant just before death
  • interdependant (as defined above)

The distinction between dependants for superannuation purposes and dependants for tax purposes is important, because dependants for tax purposes will generally receive your superannuation tax-free if it is paid as a lump sum.

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