This superannuation death benefit calculator is designed to help you calculate the death benefit payable to each beneficiary and the tax payable by the recipients.
A superannuation death benefit is a payment made to from a superannuation account to the beneficiary of the superannuation account in the event that the member passes away.
Superannuation death benefits can also include any insurance proceeds that were owned within the superannuation account.
There are rules around who is eligible to receive a superannuation death benefit and different tax rates that apply, depending on the relationship between the deceased and the beneficiary.
Who Can Receive A Superannuation Death Benefit?
Only a ‘superannuation dependant‘ is eligible to receive a superannuation death benefit.
Under superannuation law, a ‘death benefit dependant’ is defined as:
> the deceased’s spouse (including de facto)
> a child (any age) of the deceased
> a person who was in an interdependency relationship with the deceased just prior to death.
An interdependence relationship is defined as a close relationship between two people who live together, where one or both provides for the financial, domestic and personal support of the other.
Who Does Receive A Superannuation Death Benefit?
A Will does not determine who receives a superannuation death benefit.
A superannuation death benefit nomination is made by a member of a super fund to the trustee outlining who they would like their benefits paid to in the event of their death; remembering that the beneficiary must be a ‘superannuation dependant’.
The superannuation death benefit nomination can be binding or non-binding and lapsing or non-lapsing.
Alternatively, a reversionary pension will automatically revert to a reversionary beneficiary.
The reversionary pension will then count towards the beneficiary’s transfer balance cap.
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Superannuation Death Benefit Tax Calculation
Superannuation balances are made up of three types of tax components: Tax-Free Element, Taxable (Taxed) Element and Taxable (Untaxed) Element.
Superannuation death benefits tax is calculated by first determining who the death benefit beneficiaries are and how tax applies to each of them.
Under taxation law, a death benefit tax-dependent includes:
> the deceased’s spouse or former spouse (including de facto)
> a child (under age 18) of the deceased
> a person financially dependent on the deceased
> a person who was in an interdependency relationship with the deceased just prior to death
A non-tax dependant is any outside of the above.
The tax-free element of a death benefit is always received tax free by the beneficiary regardless of whether they are a tax-dependant or non-tax dependant.
The following tax rates apply to the taxable elements of death benefits paid to tax dependants, as defined by taxation law:
| Age of Deceased | Death Benefit Payment | Age of Beneficiary | Tax on Taxed Element | Tax on Untaxed Element |
|---|---|---|---|---|
| Any Age | Lump Sum | Any Age | 0% | 0% |
| Aged 60 & Above | Income Stream | Any Age | 0% | MTR less 10% tax offset |
| Below Age 60 | Income Stream | Age 60 & Above | 0% | MTR less 10% tax offset |
| Below Age 60 | Income Stream | Below Age 60 | MTR less 15% tax offset | MTR (no tax offset) |
The following tax rates apply to death benefits paid to non-tax dependants:
| Age of Deceased | Death Benefit Payment^ | Age of Beneficiary | Tax on Taxed Element | Tax on Untaxed Element |
|---|---|---|---|---|
| Any Age | Lump Sum | Any Age | Up to 15% | Up to 30% |
^Death benefit payments are unable to be received as pension income streams by non-tax dependants from 1 July 2007. Death benefit income streams that began being paid to the dependant prior to 1 July 2007 are taxed in the same manner as income streams paid to tax dependants.
Superannuation Death Benefit Calculator
The superannuation death benefit calculator below can help you calculate the death benefits tax associated with a superannuation death benefit:
