'Doesn't really align': The catch with choosing who inherits your super
Your super nomination can determine who receives your money when you die, but the rules around who receives it aren't always straightforward.
Millions of Australians are left uncertain about who will inherit their superannuation when they die, according to a recent study by consumer group Super Consumers Australia. The study found that over 15.5 million Australians do not have a binding death benefit nomination, leaving their superannuation to be distributed according to the fund's rules rather than their wishes.
While not all superannuation funds offer binding death benefit nominations, those that do have strict rules about who can be nominated. Jessica Spence, director of policy at Super Consumers Australia, explained that many people mistakenly believe that their superannuation will automatically be transferred through their will, when in fact they have to make a separate nomination to their super fund.
The rules around who can be nominated can also be confusing and may not align with traditional models of family. For example, people with family overseas or relatives who do not meet the legal definition of a dependant may find it difficult to nominate them as beneficiaries. Associate professor Natalie Silver from the University of Sydney noted that if a non-binding nomination is challenged, the relevant authority will often prioritize financial dependency when deciding where superannuation should go, potentially disregarding the nominee's wishes.
This lack of clarity and flexibility in the superannuation system poses challenges for diverse Australian families, including migrant and Indigenous populations. Experts argue that there is a need for a review of the current rules to better accommodate the way Australians live today and reflect the diversity of family structures.
Written by urgent.news from SBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
