Death Benefit—In service

In Service | After Retirement | Cessation of Student Pension

Follow this link to the quick guide to DFRDB Death Benefits (in service)

Your membership of the DFRDB Scheme not only provides you with a superannuation benefit for your retirement, but it also guarantees a benefit for your eligible dependants or your estate in the event of your death. The eligibility criteria are set out in the DFRDB Act. The DFRDB Authority will decide whether or not your dependants satisfy the conditions in the Act and qualify for the payment of a benefit.

Your dependants may also be entitled to claim benefits from Department of Veterans' Affairs (DVA) or from Centrelink as well as from the DFRDB Scheme.

Who is eligible?

In the event of your death, benefits are payable to spouses and children (including orphans) of deceased Members of the Scheme, and differ according to whether you die in service or after you retire. Examples of how these benefits are calculated and the eligibility requirements that need to be satisfied are explained below.

Spouses’ benefits

Generally, your spouse will be eligible for a benefit if they have been living with you in a marital or couple relationship as your husband, wife or partner for a period of at least three years before your death. A marital or couple relationship, for the purposes of the Scheme, is a permanent and bona fide domestic relationship between a Scheme Member and another person for a period of three years or more. Your spouse may still be eligible for a spouse’s benefit if the marital or couple relationship had existed for less than three years, at the discretion of the DFRDB Authority.

If you commence a marital or couple relationship after age 60 and that marital or couple relationship has existed for less than three years, a pro-rata of the spouse’s pension will be payable.

The final category of eligibility for spouses concerns a situation where you are legally married but you are not living in a marital or couple relationship at the time of your death. To receive a spouse’s benefit in these circumstances, your spouse will have to prove to the DFRDB Authority that they were wholly or substantially dependent on you at the time of your death.

Where two surviving spouses meet the criteria for eligibility to a benefit, the benefit will be apportioned at the rate of a minimum of 37.5% of the total benefit to each spouse, with the remaining portion allocated at the discretion of the DFRDB Authority, which will have regard to the financial needs of each of the spouses. In these circumstances, the total of the two pensions cannot exceed the total of the pension that would have been payable if there had only been one eligible spouse.

Important Note: It is a common misconception that spouses lose their eligibility and have their benefit stopped if their circumstances change. However, you can be assured that once the Authority decides that your spouse is eligible to receive a benefit, then they will get that benefit for life and it will not be stopped under any normal circumstances (e.g. in the event of your spouse’s remarriage/new relationship).

Spouses’ Benefit - Death in Service

If you die in service your spouse’s benefit will be five-eighths of 76.5% (or 47.8125%) of your salary for superannuation purposes at the time of your death.

If you are survived by more than one eligible spouse, the benefit will be apportioned at the rate of a minimum 37.5% of the total benefit to each spouse, with the remaining portion allocated at the discretion of the DFRDB Authority, which will have regard to the financial needs of each of the spouses.

In addition, your spouse is entitled to commute (that is, exchange) part of his or her future pension to a lump sum. The maximum amount that your spouse can commute is twice the amount of your annual salary for superannuation purposes that you were receiving immediately prior to your death. If your spouse chooses this option, the initial rate of pension is determined by dividing the commutation lump sum by 25 and deducting the resultant amount from the annual pension that would have been received if there had been no commutation.

Children’s and orphans’ benefits

A child is defined as either:

your natural child, stepchild, adopted child, foster child, ward or a child within the meaning of the Family Law Act 1975 who is under 16 years of age or is a full-time student aged between 16 and 25 and not ordinarily in employment or engaged in work on his or her own account.
or
an ex-nuptial child of your spouse, who satisfies the age criteria above, and who was wholly or substantially dependent upon you at the time of your death.

A child’s benefit is payable as a base rate per annum, plus an amount equal to one-sixth of your spouse’s entitlement. It is based on your spouse’s original uncommuted pension, regardless of whether or not your spouse chooses to commute. The base amount is increased twice yearly in accordance with upward movements in the Consumer Price Index (CPI).

An orphan is an eligible child where there has not at any time been an eligible spouse under the Scheme. An orphan’s benefit is calculated as a base amount per annum, plus an amount equal to one-eighth of your spouse’s entitlement prior to any commutation. The base amount is also increased twice yearly in accordance with upward movements in the CPI.

If the number of eligible orphans who are entitled to receive a pension exceed the benefit on which it is based, then each orphan’s pension is calculated by dividing the number of orphans into that rate.

Advising your dependants

It is important that your dependants are aware that a benefit may be payable from the Scheme in the event of your death.

Cessation of Student Pensions

The pension in respect of a child is payable until the child reaches age 16. The pension is payable beyond this age until age 25, provided the child is a full-time student at a school, college or university and is not engaged in any work on his or her own account.

Fact Sheets and Forms

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