Did you know your super may not automatically go to the people you want if something happens to you? A death benefit nomination lets you decide who receives your super when you pass away. However it’s important to be aware of the types of nomination. Keeping your nomination up to date is an important step in making sure your loved ones are looked after. #checkyoursuper #deathbenefitnomination #planwelltolivewell #getyourmoneyworkingforyou #financialplanning #mortgagebroker #homeloans #superannuation #retirementplanning #lifeinsurance #pension #woywoy #uminabeach #ettalongbeach #bookerbay #wagstaffe #killcare #gosford #westgosford #pointclare #woywoybay #terrigal #daleyspoint #sthubertsisland
Posted by Country Wide Wealth on Tuesday, September 9, 2025
Hey everybody, it’s Troy Chapman from Country Wide Wealth.
I wanted to share a quick video update today following a recent article from the ABC, which we’ll link in the comments. The article discusses binding nominations and nominations more broadly in superannuation and the impact they can have on families after someone passes away.
The Three Main Types of Superannuation Nominations
This is a topic we’ve spoken about before, but it’s an important one to revisit because there are several different types of beneficiary nominations you can have in super.
At a high level, the three main scenarios are:
- No nomination
- A non-binding nomination
- A binding nomination
No Nomination
Obviously, the worst option is having no nomination, the next is a non-binding nomination, and the best option is a binding nomination. I’ll quickly explain what each of these means and what happens when someone passes away.
Binding Nomination
A binding nomination is generally set up in favour of a spouse or children. When it’s done correctly, it is binding on the superannuation fund, meaning the fund must follow those instructions. As long as the paperwork has been executed properly and the nominated beneficiaries are valid, the superannuation will pass directly to those people.
It’s important to note the tax implications here. If the beneficiary is a non-tax dependant, usually a child over the age of 18, they may pay tax on the taxable component of the super. If the benefit goes to a spouse, it is generally transferred tax-free.
One of the key advantages of a binding nomination is that the superannuation does not pass through the estate. It becomes a non-estate asset, which is often the intended outcome.
Non-Binding Nomination
A non-binding nomination, on the other hand, is effectively a suggestion to the superannuation fund. As the name suggests, it is not binding on the fund. In practice, this often means the fund decides it’s too complex to determine intent and instead pays the superannuation into the estate.
If your goal is to ensure your super does not pass through your estate and instead goes directly to your intended beneficiaries, this can be a problem.
Having no nomination at all usually results in the same outcome. The superannuation fund does not know where the money should go, so it is paid into the estate.
What is a Reversionary Nomination?
There is one other type of nomination worth mentioning, called a reversionary nomination. This is typically used when someone is in the pension or account-based income phase. In this case, when one spouse passes away, the pension automatically reverts to the surviving spouse. The money remains within the superannuation system and does not exit to the estate.
My general advice is this:
All superannuation funds allow you to set up beneficiary nominations, but not all funds offer non-lapsing nominations. That means you may have completed this paperwork five or six years ago and assumed it was still valid, when in fact it may have expired.
It’s really important to log in to your super fund, review your nominated beneficiaries, and make sure everything looks correct and up to date.
One of the biggest issues with nominations is that the responsibility effectively sits with you. Super funds do not check whether a nomination is valid until a claim is made after death. They will only check that the paperwork has been completed correctly, not whether the nominated person is actually a valid beneficiary.
If you have any questions, we help our clients with this every day. We’re more than happy to provide some general guidance on what type of nomination you have in place and whether it’s appropriate for your circumstances.
If you’d like to have a quick chat, you can click the link to book a 15-minute conversation.
Enjoy the rest of your day.