Is your superannuation actually going where you think it’s going? I didn’t ask myself that question for three years.
In 2019, I finally sat down and filled out a beneficiary nomination form for my super. I split it fifty-fifty, half to my husband and half to our daughter. It felt fair. It felt like the responsible thing to do.
I didn’t think about it again until we were sitting with a financial adviser, sorting out our life insurance, when we found out it wasn’t set up the way I thought.
If you’re new to Australia, chances are nobody has explained superannuation beneficiaries to you either. It’s not something that comes up in everyday conversation, and it’s easy to fill in a form once and never look at it again. This is what I wish someone had told me back in 2019.
What a super beneficiary nomination actually is
When you die, the money in your superannuation account doesn’t automatically become part of your estate in the same way a bank account or a house might. Your super fund has a process for deciding who receives your super death benefit. This can include your super balance and, if you have it through your fund, life insurance.
One way to have more say in what happens is to nominate a beneficiary with your super fund. You can generally nominate an eligible person or people, or your legal personal representative, which means your estate can receive the benefit and it can then be dealt with according to your will.
If you don’t have a valid nomination, the trustee of your super fund may decide who receives the benefit, within the rules of superannuation law and your fund’s rules. In some circumstances, the benefit may instead be paid to your estate. That’s why checking your nomination matters.
Binding versus non-binding nominations
Not all nominations work the same way, and this is the part most people, immigrants and locals alike, don’t fully understand.
A binding nomination is an instruction your super fund must follow, provided the nomination is valid and the people you’ve nominated are eligible under the rules.
There are different types of binding nominations, depending on what your super fund offers.
Lapsing binding nominations
A lapsing binding nomination generally expires after three years, so you need to renew it if you still want it to remain in place.
Non-lapsing binding nominations
A non-lapsing binding nomination does not automatically expire, although you should still review it when your circumstances or wishes change.
Not every super fund offers both types, and some funds have additional requirements for making a nomination valid.
A non-binding nomination, on the other hand, guides your super fund trustee on who you would like to receive your super. The trustee isn’t required to follow it and may consider the circumstances at the time of your death.
This doesn’t mean a non-binding nomination is meaningless. It simply gives you less certainty than a valid binding nomination.
If you’re not sure which type you have, check directly with your super fund.
Who can actually receive your super?
This is another area where Australian superannuation law can be different from what you might expect.
Generally, people who may be eligible to receive a super death benefit include:
- your current spouse or de facto partner
- your children, including adult children
- someone in an interdependency relationship with you
- someone who was financially dependent on you at the time of your death
- your legal personal representative, meaning your estate
The important thing to understand is that who you can nominate and how the benefit is taxed are not exactly the same question.
Superannuation law determines who can receive the death benefit, while tax law determines how that benefit is treated for tax purposes.
If you’re unsure whether someone you want to nominate is eligible, it’s worth checking with your super fund or getting professional advice.
What happens when you nominate a minor child?
This was the part that caught me out. When I named my daughter, I assumed her share would simply be paid to her in the same way my husband’s share would be. I didn’t realise there were additional rules around how super death benefits can be paid when a child is a minor.
A child can be an eligible dependant for superannuation purposes, but the way a death benefit is paid can depend on the circumstances and the type of benefit.
For example, there are specific rules around when a child can receive a super death benefit as an income stream, and there are different considerations when the benefit is paid as a lump sum. So rather than assuming that naming your child means they will simply receive their percentage directly, it’s worth asking your super fund exactly how a benefit would be handled in your circumstances.
That was one of the things I wish I’d understood when I filled out my own nomination. It didn’t mean I shouldn’t have nominated my daughter. It meant I needed to understand what that nomination actually meant.
Why this matters more when you're new to Australia
Back home, you may have grown up around family who already understood these systems, or who could point you toward someone who did. Here, you’re often building that knowledge from nothing, in a system with its own rules, its own language, and its own paperwork that nobody hands you a manual for.
And this isn’t just something new immigrants overlook. A large share of Australians haven’t properly nominated who should receive their super, or aren’t sure whether the nomination they made is even binding. So if you’ve never thought about this, you’re certainly not alone.
There’s also a practical reason this can catch immigrants off guard specifically. Superannuation doesn’t have a direct equivalent in every country.
If you didn’t grow up with a compulsory retirement savings system connected to every paycheck, there may be no instinct telling you to think about what happens to that account when you’re gone.
You’re focused on the immediate things. Finding work. Sorting out a rental. Getting the kids settled. Understanding Medicare. Learning how Australian tax works.
A form you filled out once during your first job, months or years ago, isn’t exactly front of mind. But that form can matter.
How the money is taxed depends on who receives it
This is another layer that surprised me once I understood it properly. Super death benefits aren’t necessarily taxed the same way for everyone who receives them.
For tax purposes, a death benefit dependant can include your spouse or former spouse, your child under 18, someone in an interdependency relationship with you, or someone who was financially dependent on you.
A lump-sum super death benefit paid to a death benefit dependant is generally tax-free. If the benefit is paid to someone who isn’t a death benefit dependant, there may be tax to pay depending on the components of the super benefit. This is worth knowing because the person who ultimately receives your super isn’t just about who gets the money. It can also affect how much of it they actually keep.
If you’re unsure how the tax rules would apply to your own situation, this is a good point to speak with your super fund, accountant, financial adviser or legal professional.
Updating your nomination as life changes
A nomination made when you first arrived in Australia and started your first job might not reflect your life now.
If any of the following have happened since you last checked your nomination, it’s worth reviewing it:
- You got married or entered a de facto relationship
- You had a child, or your children have grown into adults
- You separated or divorced
- Someone you’ve nominated has died
- You changed super funds
- Your wishes about who should receive your super have changed
Don’t assume your nomination has automatically changed just because your circumstances have. Check with your super fund whenever your family, relationship or financial circumstances change.
MoneySmart also recommends regularly reviewing your beneficiary nomination and specifically suggests doing this when circumstances change, such as getting married, divorced or having children.
How to check your own super nomination
You don’t need a financial adviser to take this first step.
Most of it can be checked yourself in a few minutes.
1. Log into your super fund's online account or app.
Check whether your fund lets you view your current beneficiary nomination online.
2. Check whether you have a nomination at all.
If there’s nothing listed, don’t assume your wishes will automatically determine who receives your super. Your fund’s trustee will follow the applicable rules when deciding where the benefit goes.
3. Check whether it's binding or non-binding.
This matters because a binding nomination, if valid, generally gives you more certainty that your instructions will be followed.
4. If it's a lapsing binding nomination, check the expiry date.
These nominations generally expire after three years, although the exact requirements depend on your fund.
5. If you've named a child, ask your fund how the benefit would be handled.
Don’t rely on assumptions. Ask them what would happen based on your child’s age and the type of nomination and benefit involved.
6. If anything feels unclear, contact your fund's member services team.
This step is free, and it’s exactly what they’re there for.
MoneySmart also recommends checking your beneficiary nomination as part of your broader super health check and reviewing it regularly. While you’re logged in, you could also take a quick look at your fees, investment option and insurance.
Most of us only think about these things when something forces us to. An adviser meeting. A new job. A life insurance application. A major life change.
There’s no harm in getting ahead of it instead of waiting for something to remind you.
What I'd tell myself back in 2019
I filled out that form quickly, the way most people probably do, without realising how much weight it actually carried.
I wasn’t careless. I just didn’t know what I didn’t know. And I think that’s true for a lot of us who move to Australia.
We’re learning as we go. We figure out the rental system. We learn how Medicare works. We learn about super. We learn about tax. We learn about insurance.
And sometimes, we only learn about something when we have a reason to look closely.
If you take one thing from this, let it be this: Check what your own super beneficiary nomination actually says. Today, if you can.
It only takes a few minutes to start checking, and it means you’re not leaving an important decision sitting on a form you filled out years ago without understanding whether it still reflects what you want.
We eventually got ours sorted properly, with clearer guidance about what our daughter’s nomination would actually mean while she’s still a minor. It didn’t change how much we wanted to leave for our family. It just meant we finally understood how the money could actually reach them, instead of assuming. And that, to me, is the whole point.
Not knowing doesn’t mean you’ve done something wrong. Sometimes you simply need someone to explain the system in a way that makes sense.
Frequently Asked Questions
Do I have to nominate a beneficiary for my super?
No. You don’t have to make a nomination.
But if you don’t, you aren’t directly telling your fund who you want to receive your super. The trustee will follow the applicable superannuation rules and your fund’s rules when deciding where the death benefit goes. In some circumstances, it may be paid to your estate.
Can I nominate someone who isn’t my spouse or child?
You can nominate eligible people such as your spouse or partner, children, someone in an interdependency relationship with you, or someone financially dependent on you.
You can also nominate your legal personal representative, meaning your estate.
The exact eligibility rules can be complicated, so check with your super fund if you’re unsure whether someone you want to nominate qualifies.
How often do I need to update my nomination?
If you have a lapsing binding nomination, it generally expires after three years and needs to be renewed.
Non-lapsing binding nominations don’t automatically expire, but you should still review your nomination when your circumstances or wishes change.
What happens if I nominate my child and they’re under 18 when I die?
A child can be an eligible dependant for superannuation purposes, but the rules around how a death benefit can be paid to a child are specific.
For example, there are different rules for lump-sum payments and income streams, including rules around the child’s age and financial dependence.
Rather than assuming your child will simply receive the nominated percentage directly, check with your super fund about how the benefit would be handled in your circumstances.
Is my super nomination the same as what’s in my will?
No.
Your super doesn’t automatically become part of your estate simply because you have a will.
You can nominate your legal personal representative as the beneficiary of your super so that the benefit is paid to your estate and dealt with according to your will.
This is one reason it’s important to look at your super nomination and your will together when you’re doing your estate planning.
A note before you act
This article is based on general information about Australian superannuation and is intended for educational purposes only. It isn’t personal financial, tax or legal advice.
Superannuation death benefit rules can depend on your super fund, your nomination, your family circumstances and the type of benefit being paid.
Before making or changing a beneficiary nomination, check the rules of your own super fund and consider getting professional financial, tax or legal advice if you’re unsure what is right for you.
For general information, you can also refer to the Australian Securities and Investments Commission’s MoneySmart website and the Australian Taxation Office.
