Compensation for delayed death benefit payment

A Beneficiary (meaning a dependant, legal personal representative or another individual of a deceased Fund member who received part or all of the deceased member’s death benefit) will be eligible for a Remediation Payment if the deceased member is an Impacted Member.

An Impacted Member is a deceased member whose death benefit (including any death insurance benefit):

• first death claim application form was received no later than 25 October 2024, and
• was paid on or after 1 May 2020, and
• was paid to one or more Beneficiaries after the Target Payment Date (refer below).

The Target Payment Date is four months after AustralianSuper received a death claim application form for a death benefit. If multiple death claim application forms are received for a death benefit, the Target Payment Date is the date the first death claim application form is received by the Fund. This date aligns with AustralianSuper’s Applying for payment after a member dies fact sheet, which states that we aim ‘to make payment within four months from when we receive the application forms’.

Example: Suppose the first death claim application form was received on 8 March 2024. The Target Payment date is 8 July 2024, four months later (i.e. when we aim to pay the death benefit by). If we paid the death benefit (including any death insurance benefit) after that date, say on 12 August 2024, the Beneficiary(ies) would be eligible for a Remediation Payment.

You should note that the start date for this remediation is 1 May 2020, which was the point in time that AustralianSuper became explicitly aware that the Fund Administrator was experiencing delays in assessing and distributing death benefit claims.

The following Beneficiaries, however, will not be eligible for a Remediation Payment:

• Reversionary beneficiaries who were paid a death benefit as a reversionary pension. This is because the establishment of reversionary pensions is handled by the Fund Administrator’s pension team and they weren’t impacted by death claims processing delays. Therefore, they aren’t in scope of this remediation.
• Beneficiaries of an Impacted Member who, as a result of the delayed death benefit payment, didn’t suffer a financial loss or who have already received compensation from AustralianSuper equal to, or greater than, any Remediation Payment payable.

This remediation seeks to restore the Impacted Member’s account(s) to the position it would have been in if processing delays hadn’t happened and their death benefit (including any death insurance benefit) was paid on or before the Target Payment Date (i.e. paid within four months of receiving first death claim application form).

The Total Remediation Payment¹ comprises the following components:

Refer to 1. to 4. below for an explanation of the components of the Total Remediation Payment (above), including Foregone Returns. You can also find an example of how the Total Remediation Payment is calculated at the end of this question.

The method for calculating each Beneficiary's share of the Total Remediation Payment when the death benefit is paid to multiple Beneficiaries is detailed in 4.

Components of the Total Remediation Payment (above)

1. Refund of Total Administration Fees

   Means a refund of the Total Administration Fees charged to the Impacted Member’s account for the period the death benefit payment was delayed. As we aim to pay most death benefits within four months (i.e. by the Target Payment Date), this Impact Period starts from the date that is four months and one day from when the first death claim application form was received and ends on the Remediation Calculation Date³. Foregone Returns (explained below at 3.) will also be applied to this refund.

   ³ The Remediation Calculation Date (i.e end of the Impact Period) is 31 July 2025. This represents the date that compensation for any prior delays will be calculated up to. The remediation payment will then be allocated into the Deceased Member’s active account with the Fund and invested to capture any potential ongoing delays. See question 1.3 for further detail.


2. Refund of loss in account balance (if any)

   Means a refund for any loss in the Impacted Member’s account balance for the period the death benefit payment was delayed (we call this the Impact Period, explained above at 1.). Foregone Returns (explained below at 3.) will also be applied to this refund.

   A loss in account balance happens when the Impacted Member’s account balance was lower at the end of the Impact Period than at the start of the Impact Period. We’ll refund this difference (called the Balance Differential). Before we calculate the Balance Differential, we’ll subtract any death insurance benefit allocated to the Impacted Member’s account during this period (to avoid this allocation representing a gain when the account balance may have actually suffered a loss).

   Example: The Impacted Member’s account balance was $300,000 at the start of the Impact Period and $360,000 at the end of this period. Initially, it appears that the Impacted Member’s account balance has not suffered a loss because it is $60,000 higher at the end of the Impact Period. However, a death insurance benefit of $100,000 was also allocated to their account during this period. Once this is subtracted, the account balance is actually $260,000. Therefore, a Balance Differential of $40,000 will be refunded (being the difference between the starting account balance of $300,000 and the ending balance of $260,000 during the Impact Period).

   To avoid double-counting, Total Administration Fees need to be deducted from the Balance Differential before applying Foregone Returns to this amount.

   Example: An Impacted Member has refund amounts of $200 (Total Administration Fees) and $40,000 (Balance Differential). Once the Total Administration Fees have been deducted from the Balance Differential, the refunds are $200 (Total Administration Fees) and $38,800 (the new Balance Differential).



3. Foregone Returns on Total Administration Fees and any Balance Differential

   Means returns applied to the following amounts to compensate for returns that were foregone during the Impact Period (explained above at 1.):

   • refund of Total Administration Fees, and
   • refund of any Balance Differential (i.e. any loss in account balance).

   Actual returns based on the Impacted Member’s investment option(s), with a 0% floor, compounded daily, will be applied to these refund amounts. A 0% floor ensures that no returns are applied if the investment returns are negative during the Impact Period (i.e. to ensure no reduction in the refund amounts).



4. Foregone Returns on the death insurance benefit (if any)

   Means returns applied to any death insurance benefit allocated to the Impacted Member's account during the Impact Period (explained above at 1.) to compensate for returns that were foregone.

   The death insurance benefit will earn returns based on AustralianSuper’s Cash investment option, compounded daily, with a 0% floor. The returns will start from the date that is four months and one day from when the first claim application form is received until the date the death insurance benefit was allocated to the late member’s super account. This matches how AustralianSuper invests the death insurance benefit once received from the Insurer* (i.e. it’s invested in the AustralianSuper Cash option). A 0% floor also ensures that no returns are applied if the investment returns are negative during the period.

   *AustralianSuper insurance is provided by TAL Life Limited (the Insurer) ABN 70 050 109 450, AFSL 237848.

   Illustrative example: How to calculate the Total Remediation Payment

   Note, this example is not based on a particular Impacted Member’s circumstances and is for illustrative purposes only.

   • 2 January 2024: Member A passed away.
   • 8 March 2024: AustralianSuper received the first death claim application form.
   • 8 July 2024: This is the Target Payment Date (i.e. four months after we received the first death claim application form).
   • 9 July 2024: This is one day after the Target Payment Date and the start of the Impact Period.
   • 15 August 2024: Death insurance benefit allocated to Member A’s super account.
   • 31 July 2025: The is the Remediation Calculation Date and represents the end of the Impact Period.

   The Total Remediation Payment in respect of Member A is made up of the following:

   • A refund of Total Administration Fees charged to Member A’s account from 9 July 2024 to 31 July 2025, plus Foregone Returns (refer 3. above) during this period.
   • If Member’s A account was lower on 31 July 2025 than on 9 July 2024, we’ll also refund the loss in account balance (i.e. Balance Differential). However:
     
     
     • before calculating the Balance Differential, the death insurance benefit allocated to Member A’s super account on 15 August 2024, will first be subtracted from the total of their account balance on 31 July 2025, and
     • the refund of Total Administration Fees charged (above) will first be subtracted from the Balance Differential, before Foregone Returns (refer to 3. above) are applied to it from 9 July 2024 to 31 July 2025.
   • Foregone returns on a death insurance benefit allocated to Member A’s super account from 9 July 2024 to 15 August 2024 (refer 4. above).

   Note, additional returns explained at Question 1.3 will also be applied to the Total Remediation Payment (above) for Member A until it is paid to one or more of their Beneficiaries.

AustralianSuper will apply the following additional returns to the Total Remediation Payment calculated for an Impacted Member (explained in Question 1.2) until it is paid:

• Period A: Starting from 31 July 2025 (which is the Remediation Calculation Date ) and ending on the date the Total Remediation Payment is paid into the Deceased Member’s active account in the Fund, the RBA cash rate + 6%, compounded daily, will be applied.


• Period B: Starting from the date the Total Remediation Payment is paid into the Deceased Member’s active account with the Fund and ending the date the death benefit (including the Total Remediation Payment) is paid, the Total Remediation Payment will be invested in the Fund’s Cash investment option and its returns will be applied.

Yes. The Total Remediation Payment will be distributed to the same Beneficiaries, and in the same proportion, as the distribution of the death benefit.

For example, if the spouse received 100% of death benefit, they will also receive 100% of the Total Remediation Payment. If the spouse and the adult child each received 50% of the death benefit, they will also each receive 50% of the Total Remediation Payment.

If Beneficiaries have a question regarding the Remediation Payment, the Remediation Support team will be their point of contact.

This team can be contacted by:

• emailing remsupport@australiansuper.com
• calling them on 03 9117 1205 or on +61 3 9117 1205 (if living overseas), 9am to 5pm AEST/AEDT weekdays, or
• writing to them at:
  
  Remediation Support team
  AustralianSuper
  Level 30
  130 Lonsdale Street
  MELBOURNE VIC 3000
  AUSTRALIA.

The Remediation Payment has already been paid into the Deceased Member’s active account in the Fund. This means Beneficiaries will receive it as part of their death benefit payment. Beneficiaries will receive a letter outlining the details of the Remediation Payment only once the death benefit (inclusive of the Remediation Payment) has been paid.

The Remediation Payment forms part of the death benefit payment. Should a Beneficiary receive the Remediation Payment correspondence prior to receiving their death benefit payment, they should reach out to the AustralianSuper Bereavement Centre, who is responsible for managing the death benefit claim.

AustralianSuper’s Bereavement Centre can be contacted on 1300 667 387 from 8.30am to 5pm AEST/AEDT weekdays.

1. Paying a Remediation Payment
   

   Resident beneficiary

   The Remediation Payment forms part of the death benefit of the Impacted Member (see Question 1.4). When it is paid to a non-dependant Beneficiary (i.e. a Beneficiary who wasn’t a dependant of the Impacted Member for tax purposes), any taxable component of the payment is taxed. This would include an adult child (18 years or over) who was neither financially dependent on, or in an interdependency relationship with, the Impacted Member. See the definition of Dependant at the ATO website for more information.

   Should a Beneficiary’s Remediation Payment be taxed as part of the death benefit paid, they will be sent a PAYG payment summary within 14 days of payment. This summary will show the amount of tax withheld.

   For more information, see the Tax Treatment section on page 4 of the Applying for a payment after a member dies factsheet available at australiansuper.com/factsheet 

   Non-resident Beneficiary

   If a Beneficiary is a foreign resident for Australian tax purposes, their Remediation Payment will receive the same tax treatment as a resident Beneficiary (refer directly above). This is because the Remediation Payment is considered Australian sourced income. However, there are some differences. A non-resident Beneficiary generally doesn’t pay the Medicare levy and might be subject to higher tax withheld on any taxable component of their Remediation Payment.

   If a Beneficiary is a tax resident of a country that has a double tax agreement with Australia, there may be no Australian tax imposed on the payment. They will need to check the taxation laws of their country and whether it has a tax treaty with Australia. This is available at treasury.gov.au/tax-treaties

   Estate

   Where the Remediation Payment is paid to the estate of the Impacted Member as part of the death benefit payment to the estate, the legal personal representative will be responsible for deducting the appropriate tax as part of the overall death benefit to be paid to beneficiaries when the proceeds available is distributed to the beneficiaries of the estate. AustralianSuper won’t withhold any tax on the payment but will provide the estate with a payment summary showing the breakdown of the tax-free and/or taxable components that the death benefit comprises which will include the Remediation Payment amount.

   Whether the Beneficiary(ies) of the estate is taxed on the death benefit which will include the Remediation Payment depends on whether the Beneficiary is a dependant or not for tax purposes (see Resident beneficiary above for details).

   Since the estate isn’t a person, it doesn’t pay the Medicare levy.



2. Non-concessional contributions cap
   

   AustralianSuper has engaged with the Australian Tax Office (ATO) to coordinate a streamlined support process for Beneficiaries who are legal personal representatives of an Impacted Member’s estate. The process is designed to assist where payment of the Remediation Payment may cause the Impacted Member’s non-concessional contributions cap to be exceeded in the income year the Remediation Payment is paid, which could result in the estate paying extra tax.

   Beneficiaries who are legal personal representatives of an Impacted Member’s estate will have ATO Project ID Reference: ID:1-XRUD8RI included in our letter to them about the Remediation Payment. This reference can be used if they wish to seek discretionary relief on behalf of the estate from the ATO.

AustralianSuper will make all reasonable attempts using various communication methods (letter, email and phone) to contact a Beneficiary about their Remediation Payment and make payment.

If multiple attempts (at least three) fail to establish contact with the Beneficiary after exhausting all possible communication avenues, the Beneficiary’s case will be closed. The Remediation Payment amount will then be transferred to the ATO as unclaimed money. We process these transfers to the ATO every six months by 30 April and 31 October. Once transferred, the Beneficiary can claim the unclaimed money from the ATO , by calling them on 13 10 20 or +61 2 6216 1111 (from overseas). For more information, refer to the Unclaimed super money received from super funds section of the ATO website.

If a Beneficiary opened an AustralianSuper Choice Income account with their death benefit payment and that account remains open, the Remediation Payment will also have been allocated to the account.

If a Beneficiary has a complaint, they should raise it with us first by:

• calling 1300 300 273 or +61 3 9067 2108 for overseas callers (8am to 8pm AEST/AEDT weekdays)
• emailing your complaint to complaints@australiansuper.com or via our website at australiansuper.com/email, or
• writing to the: Complaints Officer, AustralianSuper, GPO Box 1901, MELBOURNE VIC 3001, AUSTRALIA.

We’ll acknowledge and investigate their complaint and address their concerns generally within 45 days. Beneficiaries can ask their assigned Complaints Officer for an update at any stage.

If a Beneficiary is not happy with our response, or they haven’t received a reply within the required timeframe, they can contact the external complaints resolution body, the Australian Financial Complaints Authority (AFCA). AFCA provides fair and independent financial services complaint resolution that is free to consumers.

Australian Financial Complaints Authority
GPO BOX 3, MELBOURNE VIC 3001, AUSTRALIA
Telephone: 1800 931 678 or 0061 1800 931 678 (if overseas)
Email: info@afca.org.au
Website: afca.org.au