Death and superannuation – what to expect
Published 26 Aug 2014
When a member of a fund passes away, the benefits under the fund will be distributed according to Superannuation Industry (Supervision) Act and the Deed under the applicable superannuation fund.
There are generally two components to a death benefit, the accumulated funds in the account from the employer and the member and the insurance benefit if applicable.
If there is an insurance benefit, this will need to be assessed separately by the funds insurer. You will need to provide documentation to satisfy the insurer that the deceased passed away and confirm that the death results in the payment of a benefit. Some policies have exclusions in relation to what they won’t cover. If there is a benefit payable, this will be forwarded to the Trustee of your super fund and will form part of the benefit payable.
Secondly, the Trustee will undertake what they refer to as the claim staking process. This involves gathering evidence from parties who may be entitled to receive part or all of the benefit payable. Generally, benefits payable under superannuation, will not form part of the Estate.
Persons whom the Trustee will consider as eligible parties are financial dependants, non-financial dependants and the legal personal representative.
Financial dependants are persons who had the right to look to the deceased for financial or other support and were receiving the support as at the date of death of the deceased. Financial dependants can include spouses (both legally married and defacto), minor children or children in full time study and living at home (which include natural, adopted or step children) and other persons with an interdependency relationship as defined in the Superannuation Industry (Supervision) Act. Generally, non-financial dependants will not be considered in the distribution of the benefit payable if there are eligible financial dependants. Benefits are generally paid to the legal personal representative if there are no financial or non-financial dependants.
If you consider yourself an eligible person who should be considered in the distribution of a superannuation benefit or feel an incorrect decision has been made by the Trustee or insurer, please contact our superannuation lawyers to discuss how we may be able to assist you during this difficult time.