From 1 July 2017, any amounts transferred into retirement phase will be measured against a transfer balance cap, which is currently $1.6 million for 2017/2018 financial year. This means any death benefit income stream a member is entitled to, will give rise to a credit in their transfer balance account (TBA).
The total amount and the timing of credit to the member’s transfer balance account will depend on the types of death benefit income streams and their commencement date.
Below is a brief summary based on the Australian Taxation Office’s publication — Law Companion Ruling 2017/3 (LCR 2017/3).
If a superannuation fund member is entitled to the death benefit income streams prior to 1 July 2017:
| Reversionary pension | Death benefit pension | |
|---|---|---|
| Credit amount | Value of the deceased’s income stream on 30 June 2017 | Value of the deceased’s income stream on 30 June 2017 |
| Timing of the credit in TBA | The later of: - 1 July 2017; or - 12 months after the date of the member’s death | 1 July 2017 |
If a superannuation fund member is entitled to the death benefit income streams on or after 1 July 2017:
| Reversionary pension | Death benefit pension | |
|---|---|---|
| Starting day | Date of the member’s death | Commencement of death benefit pension |
| Timing of the credit in TBA | 12 months after the date of the member’s death | No 12-month grace period; the date the death benefit pension is paid to the deceased’s dependent |
| Credit amount | Value on the 'starting day' (value of the income stream as at the date of the member’s death) | Value on the 'starting day' (value of the income stream on the day the death benefit pension is paid) |