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Death Benefits

Introduction

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Many Members contacting the Customer Service Centre are interested to know what benefits are payable in the event of death, how DFRDB death benefits are calculated and who they are payable to.

This online seminar will attempt to shed some light on this subject and demystify a couple of the areas where we get the most questions.

Your Membership - Your Benefit

Your membership of the DFRDB Scheme not only provides you with a superannuation benefit for your retirement, it also guarantees a benefit for your eligible dependants or your estate in the event of your death.

The DFRDB Authority decides whether your dependants are entitled to benefits.

Your dependants may also be entitled to claim further benefits from the Department of Veterans' Affairs or under the Social Security Act.

What happens to your superannuation if you die?

First let's look at who is eligible.

In the event of your death, benefits are payable to your spouse and children (including orphans).

An eligible spouse is generally defined as either:

  • Your legally married wife/husband, or
  • Your de facto partner

For a more detailed definition of eligible spouse you should contact the Customer Service Centre or consult the DFRDB Book, available on this web site.

Children

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A child is defined as either:

  • your natural child, stepchild, adopted child, foster child or ward 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.

Death in Service

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Benefits differ according to whether you die in service or after you retire. First, let's look at death in service (or when you are a contributing DFRDB Member).

Our first example relates to the entitlements of eligible spouse.

The eligible spouse of a Contributing Member who has died in service is entitled to receive:

  • a CPI indexed pension commencing at the rate of 47.8125% of the deceased Member's salary, or
  • they can elect to commute (that is, exchange) part of this future pension to a lump sum - up to a maximum of two times the deceased Member's salary.

    Plus
  • Each eligible child will receive an indexed pension commencing at the rate of $523.26 pa plus 7.9688% of the deceased Member's salary

Please note that Salary referred to in this Seminar means your salary for DFRDB purposes, which may differ from your actual salary.

Death Benefits: Commutation

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If, in the event of your death, your spouse chooses the 'commute' option, the initial rate of pension is determined by dividing the commutation lump sum by 25 and deducting the resulting amount from the annual pension that would have been received if there had been no decision to commute.

To better explain this, let's look at the case of Kevin, a Petty Officer, who dies in service and is survived by an eligible spouse and one child. At the time of his death he was receiving an annual salary of $63,784. Breanna, Kevin's spouse, decides to commute the maximum portion of her future pension. Her benefit is calculated as follows:

First we calculate Breanna's pre-commutation pension by multiplying Kevin's annual salary at the time of his death, so:

$63,784 multiplied by 47.8125% equals $30,496.73

Commutation: Step 2

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Here, we simply multiply Kevin's salary at the time of his death by two, in order to get the maximum lump sum amount payable to Breanna.

$63,784 multiplied by two equals $127,568

Commutation: Step 3

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Step three calculates the reduction to apply to the initial pension by multiplying the lump sum (calculated in step 2) by four percent, so:

$127,568 multiplied by four percent equals $5,102.72

Commutation: Step 4

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Finally, we subtract the cost of commutation (Step three) from the pre-commutation amount (Step one). The resulting figure is Breanna's annual pension, before tax.

$30,496.73 minus $5,102.72 equals $25,394 per year

Commutation Summary

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In summary, Breanna will receive a lump sum payment (tax free) of $127,568, as well as an annual indexed pension of $25,394 before tax.

She would not lose her spouse's pension should she remarry.

As well as receiving a spouse's benefit from the Scheme, Breanna is also entitled to claim a benefit on behalf of her child, commencing at the rate of $523.26 pa plus 7.9688% of Kevin's salary.

Child and Orphan Benefits

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A child's benefit is calculated as a base amount per annum, plus an amount equal to one-sixth of your spouse's entitlement prior to any commutation. The base amount is also adjusted twice yearly in accordance with upward movements in the CPI.

The child can receive a benefit until the age of 16, or the age of 25 if involved in full-time study.

For more detail on spouse and children's benefits please refer to the DFRDB Book available on this web site or contact the Customer Service Centre.

If your child is an orphan

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 adjusted twice yearly in accordance with upward movements in the CPI.

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

More detailed information can be found by contacting the Customer Service Centre.

If You Have No Dependants

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In the event that you have no dependants at the time of your death:

  • a lump sum of 1.5 times your contributions will be paid to your estate.

    Plus
  • your productivity benefit is paid to your estate.

    Less
  • any remaining surcharge debt.

Death While Receiving Benefits

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If you die as a recipient, and your spouse is eligible to receive a benefit, that benefit will be worked out as a percentage of the benefit you are receiving at the time of your death as follows:

If you are receiving retirement pay, and you elected to take up the commutation option when you left the Defence Force, your spouse will get an amount equal to 62.5 per cent of what you would have been getting at the time of your death if you had not commuted. If you did not elect for commutation, your spouse will get 62.5 per cent of what you are getting when you die.

DFRDB Legislation also gives that for the first seven paydays after you die, your spouse's benefit should be on a par with what you had been getting before your death. This extra sum of money will be paid to your spouse in the form of a single one off payment (not fortnightly over seven paydays)

Eligible Children

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Your eligible children will each receive a base amount of money as an annual benefit, plus an amount equal to one-sixth of your spouse's uncommuted benefit.

The base amount is also adjusted twice yearly in accordance with upward movements in the CPI.

Eligible Orphans

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If your children are eligible orphans they will receive a base amount of money as an annual benefit, plus an amount equal to one-eighth of what an eligible spouse's uncommuted benefit would be. The base amount is adjusted twice yearly in accordance with upward movements in the CPI.

Factors Affecting Benefits

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For more detailed information on the factors affecting the benefits of spouses, children and orphans please contact the Customer Service Centre or check out the forms, fact sheets and leaflets regarding Death Benefits that can be found on this web site.

Make Your Dependants Aware

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Remember, it is up to you, as the retired recipient, to ensure that your dependants are aware that a benefit may be payable from the Scheme in the event of your death, and that they will need to contact ComSuper for further details.

No Eligible Dependants

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If you die whilst a recipient of retirement pay, and you are not survived by any eligible dependants, your benefit will stop when you die. If there is any money owing to you at the time of your death, it will be paid to your estate. No other benefits are payable.

Your Family and Making a Claim

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If you die as a contributor, your service office takes on the responsibility of getting in touch with ComSuper and your dependants and helps them to complete the forms required to make a superannuation claim.

Following the death of a retired member, a claimant will need to provide the following information to ComSuper

  • the name of the deceased
  • their reference number
  • their date of birth
  • the date of death
  • the claimant's relationship with the deceased
  • details of any other potential beneficiaries

Surviving spouse or children may be eligible for part of the deceased's pension or any unclaimed part of an accumulated benefit.

D80 Benefit Claim Form

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Completion of the D80 Benefit Claim form is then required and will need to be accompanied by:

  • marriage certificate
  • death certificate
  • tax file number of claimant
  • new bank account details
  • any other details the applicant sees relevant in substantiating their relationship with the deceased

Children of a deceased member should complete and submit the appropriate section of the D80 form package, accompanied with copies of their full Birth Certificates.

DM90 Form

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If you are making a claim on behalf of the deceased Member's Estate you will be required to submit a DM90 form - Application for Estate Benefit. In these instances, ComSuper requires the executor of the estate to complete a Statutory Declaration confirming that the deceased was not survived by an eligible spouse or child/ren under the provisions of the DFRDB Act.

DFRDB Contacts

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The D80 and DM90 forms and related leaflets and fact sheets (including information on tax) are all available on this website or by contacting the Customer Service Centre.

Our helpful staff can also provide benefit estimates, general information, tax information and initial advice.

To speak to an experienced information officer about your superannuation entitlement, the payment of Death Benefits or any other superannuation related matter, please ring 1300 001 677 or 1300 001 877 (for pensioners).

Members overseas, please call the switchboard on 02 6272 9000.

Fax forms and queries to us on (02) 6272 9617 or pop it in the mail.

You can also email your enquiry by following the link on the DFRDB web site under 'Contact Us'.