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):

• 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 2022. The Target Payment date is 8 July 2022, 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 2022, 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 paying 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 the Fund receiving the 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 date we started paying the death benefit to one or more Beneficiaries. Foregone Returns (explained below at 3.) will also be applied to this refund.

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.

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 2022: Member A passed away.
• 8 March 2022: AustralianSuper received the first death claim application form.
• 8 July 2022: This is the Target Payment Date (i.e. four months after we received the first death claim application form).
• 9 July 2022: This is one day after the Target Payment Date and the start of the Impact Period.
• 15 August 2022: Death insurance benefit allocated to Member A’s super account.
• 10 September 2022: The is the date AustralianSuper commenced paying out the entire death benefit (including any death insurance benefit) to one or more Beneficiaries (i.e. the Beneficiary Payment Date). This date is also 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 2022 to 10 September 2022, plus Foregone Returns (refer 3. above) during this period.
• If Member’s A account was lower on 10 September than on 9 July 2022, 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 2022, will first be subtracted from the total of their account balance on 10 September, 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 2022 to 10 September 2022.
• Foregone returns on a death insurance benefit allocated to Member A’s super account from 9 July 2022 to 15 August 2022 (refer 4. above).

Note, additional returns (explained at the next question) 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 How is the Total Remediation Payment calculated? ) until it is paid:

• Period A: Starting from the date AustralianSuper commenced paying out the death benefit to one or more of the Beneficiaries³ and ending on the date the Total Remediation Payment is paid into a notional 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 a notional account in the Fund and ending the date the Total Remediation Payment is paid to a Beneficiary, 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.

Our aim is to ensure Beneficiaries face minimal disruption and need to take little to no action prior to receiving the Remediation Payment. The Remediation Support team is on hand to address queries and solve any issues Beneficiaries may encounter during this process.

The team will decide if they need more information from Beneficiaries to process the Remediation Payment.

Other FAQs provide detailed instructions on how Beneficiaries can update their personal details, the timing and method of payment, and who to contact if they have any questions or require support.

To inform us of a change to their bank account and/or name, Beneficiaries will need to fill out and send back a form that we will provide them.

Beneficiaries will also be required to provide certified proof of their identity (ID) for a change to their bank account and/or name. For a change to a bank account, Beneficiaries (other than those overseas) can do this via electronic verification, which is explained in the form.

If Beneficiaries received the Update my details form with their Remediation Outcome letter, they can inform us of a change to their bank account and/or name by completing and returning this form within 45 days from the letter’s date. Otherwise, their Remediation Payment will be made to the same bank account as their death benefit payment.

If Beneficiaries needs help with completing the form, please contact the Remediation Support team 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.

For details on how Beneficiaries can return forms and documents, see Question How do Beneficiaries return completed forms and documents?.

To inform us of a change to their address, Beneficiaries can contact the Remediation Support team 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.

Beneficiaries will need to answer security questions satisfactorily when calling or emailing, to change their address.

Alternatively, Beneficiaries can notify us of a change to their address by completing the same form used to notify us of a change to their bank account and/or name.

Beneficiaries can return all completed forms and documents to AustralianSuper’s Remediation Support team.

These can be sent via post or email by:

• scanning these documents and emailing: remsupport@australiansuper.com
• posting these documents using the Reply Paid envelope (where provided) or by sending them to:
  Remediation Support team
  AustralianSuper
  Level 30
  130 Lonsdale Street
  MELBOURNE VIC 3000.

If Beneficiaries have a question or need help during this process, 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.

Beneficiaries may have received a letter with the expected Remediation Payment date (about 61 days from the letter date).

Otherwise, their Remediation Payment will be paid once the Remediation Support team has all the required information to proceed with the payment. This may involve the Beneficiary completing a form and providing other information, including verifying their identity (ID). We aim to finalise this as promptly as possible. The Remediation Support team can be contacted for a status update.

Once Beneficiaries have been paid, we will send them a confirmation letter and PAYG summary (if the payment is taxed).

Should a Beneficiary not receive their Remediation Payment within the timeframe specified in Question When will Beneficiaries be paid their Remediation Payment?, they should reach out to the Remediation Support team.

If a Remediation Payment to a Beneficiary’s bank account fails due to rejection or bounce-back, we’ll reach out by letter, email or by calling, to request their current bank account. After several failed contact attempts, we’ll close the case and transfer the Remediation Payment amount to the Australian Taxation Office (ATO) as unclaimed money. Our final follow up communication will advise that this transfer will happen if no reply is received, or we don’t receive the Beneficiary’s correct bank account details, by the due date. We process these transfers to the ATO every six months by 30 April and 31 October. Once transferred, to claim unclaimed money from the ATO, call 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.

No, the Beneficiary is unable to do so. Since the Remediation Payment forms part of the Impacted Member’s death benefit, it must be paid to the same Beneficiaries, and in the same proportions, as the distribution of the death benefit.

Very limited circumstances exist which allow the Remediation Payment to be paid to someone other than the intended Beneficiary (see following Questions).

In the highly unlikely event that a Beneficiary doesn’t want the Remediation Benefit they are entitled to, the Remediation Support team will advise the Beneficiary that:

• they must provide written confirmation of their refusal, and
• since the Remediation Payment is part of the Impacted Member’s death benefit, if they refuse to accept it, it will be paid to another dependant, legal personal representative, or if neither can be found, an individual (as determined by AustralianSuper).

1. Remediation Payment

Resident beneficiary

The Remediation Payment forms part of the death benefit of the Impacted Member (see Question Does the Total Remediation Payment form part of the death benefit? ). 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, 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 pay higher tax 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, the legal personal representative will be responsible for deducting the appropriate tax when the amount 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 Remediation Payment comprises.

Whether the Beneficiary(ies) of the estate is taxed on 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. Concessional/Non-concessional contributions cap

AustralianSuper has engaged with the 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 concessional or 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 upcoming Remediation Payment. The letter also states whether the Remediation Payment counts towards the Impacted Member’s concessional or non-concessional contributions.

Upon receiving proof from the legal personal representative for the Impacted Member’s estate that it has been wound up, the Remediation Payment will not be paid to the estate.

Instead, as the Remediation Payment is part of the Impacted Member’s death benefit, AustralianSuper will pay this amount to one or more dependants of the Impacted Member. In the absence of any dependants, AustralianSuper will pay the Remediation Payment to one or more individuals connected to the Impacted Member.

The Remediation Support team will reach out to any dependants or individuals AustralianSuper determines to pay the Remediation Payment to (in lieu of the estate) to request all necessary information and documentation to make the payment.

To find out more about how a decision is made, refer to the How we decide who gets a payment section in our Applying for a payment after a member dies factsheet available at australiansuper.com/factsheet

Beneficiaries can contact the Remediation Support team for further information. 

Upon receiving proof that a Beneficiary has passed away, AustralianSuper will pay the Remediation Payment (that was otherwise payable to that deceased Beneficiary) to one or more of the Impacted Member’s dependants and/or the legal personal representative. If neither can be found, AustralianSuper will pay the Remediation Payment to one or more individuals who weren’t dependants of the Impacted Member.

The above applies because the Remediation Payment is part of the Impacted Member’s death benefit and doesn’t form part of the deceased Beneficiary’s estate.

To find out more about how a decision is made, refer to the How we decide who gets a payment section in our Applying for a payment after a member dies factsheet available at australiansuper.com/factsheet

The Remediation Support team will reach out to potential beneficiaries (such as any dependants, legal personal representatives or individuals connected to the Impacted Member) to assess eligibility for the Remediation Payment. This team will request all necessary information and documentation from eligible beneficiaries to make payment.

Beneficiaries can contact the Remediation Support team for further information. 

We’ll require evidence that the particular change has happened.

Typically, the Remediation Support team will ask the new legal personal representative, or new legal guardian or trustee of a minor, to complete the Additional payment form and provide other information too.

Beneficiaries can contact the Remediation Support team for further discussion.

In this case, the Remediation Payment can be paid to the Beneficiary directly (as they are now an adult) and not via a Minor Trust.

The Remediation Support team will inform the Beneficiary about any further information required to make payment.

Beneficiaries can contact the Remediation Support team for further information. 

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 Australian Taxation Office (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.

Yes, if a Beneficiary has an AustralianSuper financial adviser⁴ an email will be sent to inform the adviser that they have a client who is a Beneficiary entitled to receive a Remediation Payment from AustralianSuper. The email will also include background information regarding the Remediation Payment.

Initially, we’ll inform the Beneficiary about the upcoming Remediation Payment via a letter, which will be sent by email (if we have their email address).

The Remediation Support team will also be in contact with the Beneficiary to let them know what information is required to process the Remediation Payment or they can contact this team beforehand to discuss. This team can be contacted by:

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

If the Beneficiary requires the Remediation Payment to be paid to a different bank account (either foreign or Australian) to the one they received the death benefit payment and/or their name has since changed, they’ll need to complete and return the Update my details – beneficiary residing overseas form and provide certified proof of their identity (ID).

If the certified ID document isn’t written in English, the Beneficiary must provide a written translation that an authorised translation service has certified it as a true copy. Authorised translation services include:

• an appropriate embassy, or
• a professional translation service accredited by the National Accreditation Authority for Translators and Interpreters Ltd (NAATI) naati.com.au

See also Question What are some tax considerations? for some tax considerations applying to non-resident Beneficiaries.

If a Beneficiary opened an AustralianSuper Choice Income account with their death benefit payment, we’ll send them a letter informing them that the Remediation Payment will be deposited into the bank account linked to their Choice Income account (i.e. the bank account that pension payments are paid into).

If the Beneficiary no longer has an AustralianSuper Choice Income account or they would like the Remediation Payment paid to a different bank account, they’ll need to complete and return the enclosed Additional payment form within 45 days from the letter’s date. They’ll also need to provide certified proof of their identity (ID) or they can do this via electronic verification (GreenID) as set out in the form.

The Beneficiary can notify the Remediation Support team and they’ll put a ‘Do not Contact’ note on their case. 

Depending on the circumstances, if the Remediation Payment hasn’t already been paid to them, the Remediation Payment will be treated in the same manner as a Remediation Payment that a Beneficiary refuses to accept. See Question What happens if a Beneficiary doesn’t want to receive their Remediation Payment? for further information on how this will be dealt with.

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 their 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