What happens to my pension if I die?
Reversionary pension
You can, if you wish, nominate your spouse as a reversionary beneficiary to continue to receive your pension in the event of your death.
After your death, the pension payments will continue to be received by your spouse and taxed in the same manner as when they were paid to you.
Non-reversionary pension
Where you do not nominate a reversionary beneficiary in respect of your pension, you may nominate another person to receive your pension or account balance after your death.
Where you nominate a dependant HIP can continue to pay the pension to your dependant.
Alternatively, a dependant can receive the benefit as a lump sum, where they do not wish to continue to receive the benefit in the form of an income stream.
Any person that is not a dependant that you would like to receive some or all of your benefit upon your death, must receive the benefit as a lump sum. Superannuation pension payments are unable to be continued to a non-dependant.
You can nominate more than one beneficiary, and a combination of a reversionary beneficiary and other beneficiaries if you choose. Different tax consequences may apply depending on the nomination you make and the ultimate recipient of any benefits on your death.
Beneficiary nominations
You can nominate beneficiaries when you complete the Pension Application Form. You must nominate a reversionary beneficiary (if you wish) at the time you commence your pension. You can also change or update a non-reversionary beneficiary nomination at any time. Should you wish to do this, please contact HIP.
The decision as to whom your death benefit is paid lies with the Trustee. Whilst full consideration is given to your wishes in relation to your stated beneficiaries, it is important to realise that, for both legal and practical reasons, the Trustee has absolute discretion as to whom a death benefit is paid. In this regard, the Trustee takes into account your personal circumstances at the time of your death.
It is always advisable to make a will. If you would like to do so, you should consult a solicitor or the office of the Public Trustee.
Definition of dependant
Under superannuation law a ‘dependant’ means:
- A person’s spouse
- A child of the person
- Someone who has an interdependent relationship with the person
- Or anyone who is wholly or partly financially dependent on the person at the time of the person’s death.
An ‘interdependant’ is a person with whom the member has an ‘interdependant relationship’. An ‘interdependent relationship’ applies if two people satisfy each of the following conditions: have a close personal relationship, live together, and one or each of them provides the other with financial and domestic support and personal care.
Note: a different definition of “dependant” applies for taxation purposes. A child aged 18 or more is not a dependant for taxation purposes (unless otherwise financially dependant or an interdependent). This means that while you may nominate an adult child as a beneficiary of your account balance, for tax purposes, the adult child will be treated as a non-dependant.
This website is provided by Private Hospitals Superannuation Pty Ltd ABN 59 006 792 749, AFSL 247063, RSE L0001533, Trustee of Health Industry Plan (SPIN HIP0100AU, RSE R1056617), and is general information only. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. Please note that investments can go up and down. Past performance is not a reliable indicator of future performance. You should assess your own financial situation and needs, read the relevant Product Disclosure Statement and consult an adviser if required before making a decision about products on this website.