How your pension is paid to your chosen recipients will depend on their circumstances and relationship to you.
What is a beneficiary?
A beneficiary is the person or persons whom you wish to receive the balance of your super in the event of your death.
Your beneficiary(s) must be a dependant or your legal personal representative.
Your pension may continue to be paid in regular payments to your nominated dependant if they meet the conditions for reversionary beneficiaries outlined below. Alternatively, your dependant may choose to receive the benefit as a lump sum. You can only nominate one person as your reversionary beneficiary.
If your beneficiary is not a dependant, or is a child who doesn’t meet one of the reversionary beneficiary requirements, the balance of your pension will be paid as a lump sum.
You can nominate additional beneficiaries to receive lump sum proportions of your balance. The Trustee of Media Super is not legally bound by your wishes but will take them into account.
What is a reversionary beneficiary?
A reversionary beneficiary is the person who will receive your pension as an income stream - that is, your pension payments will revert to them once you die.
Only spouses, certain children and dependants are eligible to become reversionary beneficiaries. A child can only be a reversionary beneficiary if they are:
- under the age of 18
- aged 18–25 and financially dependent, or
- have a disability as outlined in the Disability Services Act.
If your reversionary beneficiary is a child under the age of 18 at the date of your death, they can only receive your pension as an income stream until they turn 25, at which point they must convert the remaining pension into a tax-free lump sum, unless they suffer from a disability.
Your reversionary beneficiary nomination occurs as part of the application process on commencing a Media Super pension. As a valid reversionary beneficiary nomination is binding on Media Super, you will need to cancel your existing pension and commence a new pension if you want to change your reversionary beneficiary.
Who is a dependant?
A dependant for superannuation law purposes includes:
- your spouse (including de facto and same-sex couples);
- your children (including natural, step or adopted and children of your spouse). In order to receive the benefit tax-free, children must be under the age of 18. A child over the age of 18 can only receive the benefit tax-free if they are financially dependent on you or have a disability (as defined by legislation);
- a person financially dependent on you at the date of death; and
- a person in an interdependency relationship with you.
An interdependency relationship exists if:
- two people have a close personal relationship and they live together; and
- one or each of them provides the other with financial support; and
- one or each of them provides the other with domestic support or personal care.
An interdependent relationship also exists if two people have a close personal relationship and the other requirements are not satisfied because either or both of them suffer from physical, intellectual or psychiatric disability or because they are temporarily living apart.
Dependants for tax purposes
The definition of 'dependant' is different for tax purposes, and includes:
- spouse or former spouse (including same-sex couples)
- child under 18
- financial dependant
- interdependant (as defined above)
The distinction between dependants for superannuation purposes and dependants for tax purposes is important, because dependants for tax purposes will receive your superannuation tax-free if it is paid as a lump sum after your death.
What I if don’t have any dependents?
If you do not have dependants, you can nominate anyone as your preferred beneficiary or beneficiaries.
Where there are no dependants, your benefit will be paid at the Trustee’s discretion. Usually, this means that your benefit will be paid to your estate and distributed according to your Will (if you have one) or State Law.
How can I nominate beneficiaries?
You can nominate your reversionary beneficiary during the pension application process. You will need to cancel your existing pension and commence a new pension if you want to change your reversionary beneficiary.
You can nominate or change your other beneficiaries at any time by:
- using your online account, or
- completing a Nominating Beneficiaries form and returning it to Media Super.