nominate your beneficiaries
A beneficiary is someone you choose to get your super when you die. Your nominated beneficiary or beneficiaries could receive your super account balance and any insurance benefits, which is also known as your 'superannuation death benefit'.
why nominate a beneficiary for your super?
Nominating a beneficiary helps us decide who your super should go to after you die. Your super isn’t automatically included in your estate, so nominating a beneficiary means there are clear instructions on who you want to receive your super.
The importance of nominating a binding beneficiary
Having a valid binding beneficiary nomination in place when you die means we’ll pay your super as you’ve requested. Otherwise, we’ll need to decide who to pay.
It’s not a nice thing to think about, but putting plans in place and nominating a binding beneficiary now can help save your loved ones extra stress later on.
who can you nominate as a beneficiary?
There are different types of beneficiaries and rules around who can be a beneficiary. It’s important to understand who you can nominate to make sure your beneficiary nomination is valid.
We have a legal responsibility to make sure your super death benefit goes to your dependants or your Legal Personal Representative (LPR).
Under superannuation law, your dependants include:
- your spouse, including same-sex and de-facto partners
- your child, including an adult child, adopted child, step-child, ex-nuptial and child of the member’s spouse
- a person who is wholly or partially financially dependent on you
- a person with whom you have an interdependency relationship.
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.
Your LPR includes:
- the executor of your Will, or
- the administrator of your estate.
types of beneficiary nominations
There are 3 options for nominating a beneficiary.
Binding beneficiary nomination
A binding beneficiary nomination means we‘re legally bound to pay your super death benefit to the person or people you’ve nominated, as long as your nomination is valid. Making a binding nomination provides greater certainty about who your super death benefit will go to.
This type of nomination needs to be updated every 3 years to keep it active. You can update it or cancel it at any time.
You can make a binding death benefit nomination using the form below.
Nominate a binding beneficiary (PDF)
Non-binding beneficiary nomination
A non-binding beneficiary nomination can help us decide who will get your super, but we’re not required to pay your super death benefit to the person or people you’ve nominated. If you have a non-binding nomination in place when you pass away, we’ll need to decide who to pay.
We’ll take your non-binding nomination into consideration but may identify other potential beneficiaries. In some circumstances, we may need let all potential beneficiaries know of our decision and give them an opportunity to object, even people you didn’t nominate.
You can nominate or update your non-binding beneficiaries at any time using the form below.
Reversionary beneficiary nomination
(Income Stream members)
HESTA Income Stream members can set up a reversionary beneficiary nomination. This means your account balance will be paid to your dependants after your death as an income stream. Your reversionary beneficiary can choose to get regular payments from your HESTA Income Stream until the account balance reaches zero, or they can choose to get a lump sum payment.
You can set up a reversionary beneficiary nomination when you open your HESTA Income Stream account. You can only choose one reversionary beneficiary, and they must be financially dependent — usually a spouse. If you want to change who you’ve nominated or add a reversionary beneficiary, you’ll need to open a new HESTA Income Stream account.
We recommend you seek financial advice before nominating a reversionary beneficiary.
To nominate a reversionary beneficiary, complete the application form in the HESTA Income Stream PDS.
Nominate a reversionary beneficiary (PDF)
when you should review and update your beneficiaries
Life changes, and so might the people you’ve nominated as your beneficiaries, so keeping them up to date is important.
You should review your beneficiary nominations regularly, especially after major life events like:
- marriage or divorce
- starting or ending a de facto relationship
- birth or adoption of children
- the death of a family member
- changes in family relationships.
You can check your current beneficiary nominations in your online account.
case study
Why it’s important to make a binding beneficiary nomination
We often speak to members who want to leave their super benefits to their adult children.
In this case, a 69-year-old member made a non-binding nomination to her 3 adult independent children, without seeking information or help from her super fund. She also had a Will and an enduring power of attorney. After the member died, her children made a claim to receive their mother’s super death benefit. The super fund needed to find out if there were any other potential beneficiaries who could make a claim.
There was. The member had been living with a de-facto partner for several years. They both had their own children and kept their finances separate. They had also agreed not to claim anything from one another’s estates upon death. And their Wills specified these arrangements.
Despite this, the partner claimed against the deceased member’s super. The super death benefit — all of it — was paid to the de-facto partner and not to the children. That’s because none of the children were financially dependent on the member at the time of death.
So what could this member have done differently? The member could have made a binding death benefit nomination to all 3 adult children, or to her legal representative. This would have provided greater certainty around who would get her super death benefit.
The member’s super fund would have confirmed that the binding beneficiaries were her children when the member died and would have paid the benefit to the children.
more on beneficiary nominations
There are strict legislative requirements and fund rules that guide how we decide who can receive a super death benefit.
If you’ve got a binding beneficiary nomination in place at the time of your death, we’ll check that the person or people you’ve nominated are valid beneficiaries under superannuation law. Once we’ve confirmed that they’re eligible, we’ll make the payment as per your wishes.
If you haven’t got a valid binding beneficiary nomination in place, we need to decide who to pay. First, we’ll identify all potential beneficiaries, and we’ll consider your preferences if you’ve made a non-binding nomination. We also need to consider if the person or people nominated can be paid a death benefit under superannuation law and our fund rules.
If you’ve nominated a reversionary beneficiary, this is treated like a binding nomination. We’ll pay the benefit as per your wishes if the person nominated is eligible.
There are a few ways a beneficiary nomination might be considered invalid. These can include:
- If the person you’ve nominated isn’t considered a dependant, or your legal personal representative. For example, if you nominate your friend who isn’t financially dependent on you, the nomination would be considered invalid.
- If you don’t fill out the proportion of the benefit to be paid in full percentages on the Binding death benefit nomination form (PDF), or if the total doesn’t add up to 100%.
- If you’ve made a binding beneficiary nomination and you don’t update or renew it after the 3-year period. It would then be considered lapsed, and will become a non-binding nomination.
While you can’t nominate someone who’s a non-dependant as a beneficiary, you can nominate your Legal Personal Representative (LPR) as a binding beneficiary to receive part of all of your super death benefit.
Your super death benefit would then form part of your estate and your LPR could distribute it as outlined in your Will.
It’s helpful to understand the tax implications on super death benefit payments. Super death benefits are taxed differently depending on whether or not the beneficiary is a dependant for tax purposes.
The amount of tax payable on a super death benefit depends on the person it’s paid to. It also depends on whether it’s paid as a lump sum, or as an income stream.
Things to note about nominating a reversionary beneficiary:
- At the time of your death, your nominated reversionary beneficiary will need to make sure they don’t exceed their personal transfer balance cap, as there can be tax implications.
- There may be other tax implications on their Centrelink or Department of Veterans’ Affairs benefits or payments.
- We recommend you seek financial advice before nominating a reversionary beneficiary.
Find out more about tax and superannuation death benefit payments in How super is taxed (PDF) or on the ATO website.
If you don’t nominate a beneficiary, we make the decision on who gets your super – and that might not be what you want. We’ll identify all your potential beneficiaries and consider your preferences based on any prior nominations you’ve made, as well as the documents we receive from the potential beneficiaries.
We may also need to notify all potential beneficiaries of our decision and give them an opportunity to object. This could mean the super death benefit won’t be paid until all objections are resolved.
Generally, the way to ensure your loved ones are paid quicker and more efficiently is to make a binding beneficiary nomination and keep it up to date.
Need a hand?
There are a few things to think about when it comes to nominating a beneficiary. For help understanding the rules and what might work best for you, make a time to speak to a member of our Advice team.