Part #1: Understanding death benefit claims
Published on July 24, 2023 by Matthew Forshaw
Superannuation plays a vital role in securing financial stability for you during your retirement. In addition to these retirement benefits, superannuation also offers provisions for death benefit claims. This article explains the process for such claims.
Who can make a death benefit claim?
A death benefit claim arises when a member of a superannuation fund passes away. It allows the nominated beneficiaries or legal representatives to receive a payout from the deceased member’s superannuation account. The purpose of the death benefit claim is to provide financial support to dependents or other designated beneficiaries after the member’s death.
You can make a claim for a payment if:
- You are a beneficiary nominated by the super fund member,
- You were a dependent of the deceased, for example if you are a child,
- You were the dependent of the deceased, for example if you are a spouse, or
- If you were otherwise in a close personal relationship with the deceased.
What are the steps to make a death benefit claim?
It is best to make a claim as soon as possible and you should follow these steps:
1. Notify the superannuation fund
The first step is to notify the superannuation fund about the member’s death by contacting the fund’s customer service or by accessing their website to find the necessary forms and guidelines.
2. Gather the required documents
The fund will typically require specific documentation, such as a certified copy of the death certificate, identification of who is making the claim, and proof of the relationship between the deceased member and the beneficiary.
3. Is there beneficiary designation?
If the deceased member had nominated beneficiaries in their superannuation account, the claim process may be streamlined. Some superannuation funds have binding nominations, which means the person who holds the account can nominate someone directly. When there is no nominee or a non-binding nomination, the person managing the superannuation fund (they are called the trustee) may decide who the dependents are, divide up the superannuation balance or give it to the deceased estate.
4. Fund assessment
The superannuation fund will assess the claim and determine the appropriate distribution of the death benefit. This decision is based on the fund’s rules and relevant legislation, considering factors such as financial dependency and the relationship to the deceased member.
How are the benefits paid?
The payout for death benefits usually includes money from the superannuation fund, and the payout from the insurance policy that was attached to the superannuation fund so it can vary depending on how the contributions were being made to the fund.
If you are a dependent of a person who has died, you may be able to choose the death benefit to be paid as either a lump sum or an income stream. If you are not a dependent, it will be paid as a lump sum amount.
Understanding the processes involved is essential to ensure a smooth and timely claim. Seeking professional advice can also be helpful in navigating the complexities associated with these types of claims, especially as you are making these types of claims in what is usually an overwhelming time.
You can contact us at Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page if you need help making a claim and one of our lawyers will assist you.