making a death benefit claim
On this page
- What is a death benefit?
- Who is eligible to receive a death benefit?
- The claims process
- How is a death benefit paid?
- Case studies
what is a death benefit?
A superannuation death benefit is a payment made after a HESTA member passes away. It includes their account balance, as well as any insurance cover they may have had at the time of their death.
Death benefits don't automatically form part of the deceased member's estate, even if they left a Will directing how their superannuation benefit should be paid or if they made a non-binding nomination on their account.
who is eligible to receive a death benefit?
There are strict legislative requirements and fund rules that guide how we decide who can receive a member's death benefit.
We can pay a death benefit to eligible dependants of the member or their legal personal representative (LPR), meaning the executor or administator of a member's estate.
Who is a dependant?
A dependant includes:
- a spouse (includes same-sex and de facto partners)
- a child including adult child, adopted child, step-child, ex-nuptial and child of the member’s spouse
- a person who is financially dependent on the member at the time of death
- a person in an interdependency relationship with the member at the time of death.
An interdependency relationship is when there is a close personal relationship between two people and:
- they live together and
- one or both provides the other with financial support, domestic support and personal care.
An interdependency relationship can also be a close personal relationship between two people, but one or more of the above conditions aren't met because of the physical, intellectual or psychiatric disability of one of the people.
If there aren't any dependants or LPR to pay the death benefit to, we'll consider paying it to another person or to the Australian Taxation Office (ATO).
For more information on who is a dependant or LPR, read the Claiming a superannuation death benefit guide and form (PDF).
Beneficiary nominations
There are 3 types of beneficiary nominations a member can make:
- Binding death benefit nomination - a valid binding death benefit nomination on the account at the time of the member's death means we must pay the death benefit to the people named in the proportions nominated by the member, as long as the nomination is valid (including that it has not expired and the persons listed qualify as dependants or LPR). If the binding nomination expires, the instructions revert to a ’non-binding’ nomination.
The nomination can only include dependants, interdependants or the anticipated LPR.
A binding death benefit nomination will generally be valid, if:
- it hasn't expired at the time of the member's death
- the people nominated were dependants or LPR of the member at the time of the member's death
- we received it before the member's death
- Non-binding nomination - if there's a non-binding beneficiary nomination, we'll consider the nomination together with all other personal circumstances to decide who to pay. We can use discretion on who should receive the benefit, but we need to follow superannuation law and the fund rules.
- Reversionary nomination – works similarly to a binding nomination. It ensures that your superannuation benefit is paid as a pension (income stream payment) to a nominated dependant after your death. Once made, a reversionary nomination cannot be changed.
Learn more about the types of beneficiary nominations.
*See our Vulnerable Members Policy (pdf) to learn about our commitments and expectations for dealing with members who are experiencing difficulty and require extra care.
the claims process
We understand that losing a loved one is a difficult and stressful time. While navigating a death benefit claim may seem overwhelming, we're here to support you through the claim.
These steps will guide you through the death benefit claims process and outline the documents and information you'll need. If you have any questions, please contact us for help.
You can start the claims process by notifying us using the online form below.
We'll ask for some information about the deceased member to confirm their account with us, including:
- their HESTA member number
- their full name, date of birth, date of death, and last known residential address
- your name and contact details as the notifier or potential claimant.
We'll assign you a dedicated case manager who will be in touch to explain next steps including the information and documents we need to progress your claim. More information is explained in the Claiming a superannuation death benefit guide and form (PDF).
Your case manager will contact you to gather more information to commence the claims process.
The information and documents we need from claimants to assess each death benefit claim varies.
Documents
Generally, we require certified copies of the deceased member's:
- death certificate
- proof of age (e.g. passport, driver licence or proof of age card)
- Will (if it exists).
Information
Information we require includes:
- details of the person making the claim
- personal details of the deceased member's dependants (i.e. spouse/defacto and children) and documents to evidence the relationship to the deceased member, e.g. marriage certificate, details of a defacto relationship or birth certificate
- details of the Estate (e.g. Will, Probate or Letters of Administration where this information exists).
In this initial stage we try to collect all relevant information and documents. However, sometimes we may ask for more information as we begin assessing the claim.
Detailed information is explained in the Claiming a superannuation death benefit guide and form (PDF).
When you have the initial documents and other information ready, please scan and email or post to:
- Email: hesta@hesta.com.au (please include the deceased’s member number in the subject line)
- Postal Address: HESTA, Locked Bag 35007 Collins St West, VIC 8007
Account balance
When we receive formal notification of death, we’ll switch the member's account to the HESTA Cash and Term Deposits investment option so the account balance is less likely to be impacted by any investment market movements.
We commence assessing the claim based on the initial information and documents you provide. We aim to assess and pay claims as quickly as possible. It’s important that we receive accurate and complete information to avoid delays.
It can take less time if we have all the information and documents straight away, or it can take longer if there are delays. Delays can include things like appointing a Legal Personal Representative for the Estate, providing certified documents, receiving new information from you or potential beneficiaries, family complexities, and multiple beneficiaries.
We’ll keep you updated through the claims process if we need more information or documents.
Insurance
Alongside assessing the above information, if the deceased member held insurance cover, we'll lodge a claim with our insurer to assess whether any insurance benefit is payable. Our insurer might ask for more information, which we'll contact you about.
What happens if the insurer approves the insured benefit?
An approved insured benefit is added to the member's account effective the date it's received from the insurer and will be invested in the Cash and Term Deposit option.
What happens if the insurer declines the claim?
If the insurer declines the claim, we'll review the insurer’s decision to make sure it’s consistent with the terms of the policy and is a fair and reasonable outcome. We may also ask you for more information.
If we agree with the insurer's decision to deny the claim, we will advise you directly to explain the reasons for the decline and information about the steps you can take if you disagree.
If we receive any new information, it generally takes 5 business days for the case manager to review.
If no further information is needed, the claim will be assessed by the HESTA Trustee to decide who will be paid a benefit and in what proportion if there are multiple beneficiaries. We can only make a final decision once we confirm all possible and eligible beneficiaries.
Once a decision is made, we’ll notify all parties of the outcome in writing.
In some cases, we will give the parties 28 days to agree or object to the outcome. If no objections are received within 28 days, or if everyone agrees, the benefit will be paid.
If an objection is made, we’ll review the claim and either confirm or change our decision. If a claimant is still unhappy, they can submit an objection to AFCA for an independent review. AFCA have strict timeframes of 28 days from the date of our decision to lodge an objection.
The benefit won't be paid while a complaint is in progress with AFCA. If this happens, your case manager will update you regularly on how the claim is progressing. You can also contact them any time for an update.
Generally, we won't pay the death benefit unless all issues are resolved. Once this occurs, the death benefit is paid as either:
- a lump sum: to an individual or split between multiple parties
- an income stream or rollover: some dependants can have a death benefit paid this way.
We pay death benefits electronically. We’ll ask all beneficiaries to provide their preferred banking details by completing a payment form.
how is a death benefit paid?
Tax on death benefits
The amount of tax (if any) that is withheld from the benefit will depend on the individual to whom it is to be paid. It also depends on whether it's paid as a lump sum or an income stream or rollover.
Tax on lump-sum payments
The information provided in the claim documentation helps determine who is a financial dependant to assist in the decision and this leads to how they are taxed. Tax is payable only on the taxed component of the deceased member's balance.
| Paid to: | Is tax payable? |
Dependant of the deceased including:
|
No |
| Non-dependant (includes a child above the age of 18) |
Yes |
| Legal Personal Representative | Tax payable will depend on whether the beneficiary is a dependant or non-dependant. |
If the death benefit is paid as an income stream, the way it's taxed will vary. For example, the tax-free component remains untaxed, but if the age of the deceased member is below age 60, the taxable component will be subject to tax until the beneficiary reaches age 60; or in the event a child is nominated as a reversionary beneficiary, payments are only available until the child reaches age 25. Income stream payments may also impact the assessment of government payments or count towards the calculation of any transfer balance caps.
You can find out more about tax on super death benefits on the ATO website.
We recommend speaking with a financial adviser to understand the tax implications of receiving a death benefit.
We can't advise you on legal issues that may happen because of your claim. You may need to get legal advice, but you'll need to pay to have your own legal representation.
We need to act in the best interests of our members and their beneficiaries. All claims are assessed on a fair and reasonable basis. Your case manager will help you through each step in the claims process.
Patricia and Jean
Patricia and Jean are sisters who live together, share expenses, and have a close personal relationship. Patricia is a HESTA member.
Patricia is diagnosed with a chronic medical illness and Jean takes Patricia to medical appointments, provides support with everyday needs like cooking meals, personal hygiene, and emotional support, while she's unwell. Sadly, Patricia passes away.
After reviewing the evidence, the Trustee recognises that Jean and Patricia had an interdependency relationship, and with no other financial dependants identified, Jean may receive 100% of Patricia's death benefit tax free.
Susan and John
Susan is a HESTA member. She started a relationship with John and has been living with him for 12 months.
Susan has 3 adult children who are all financially independent. Susan passes away suddenly. After looking at the evidence, the Trustee decides to pay Susan's entire death benefit to John. They conclude that if Susan had lived, she would have continued to support John financially.
If Susan had made a valid Binding Death Benefit Nomination detailing how she wanted her death benefit to be distributed, such as including her adult children, this would have changed the Trustee's decision.