Superannuation Terminal Illness Claims

If you are diagnosed with a terminal illness, you may be able to access the accumulated balance of your superannuation and also seek early access to any death benefit insurance cover you hold.

What is a terminal illness?

A terminal illness means you are suffering from a terminal medical condition. For a medical condition to be classed as terminal, all three conditions below must be met:

1. Two registered medical practitioners must have certified, jointly or separately, that you suffer from an illness or an injury that is likely to result in your death within 24 months of the date of the certification;
2. At least one of the registered medical practitioners must be a specialist practising in an area related to the illness or injury you are suffering from; and
3. For each of the certificates, the 24 month certification period has not ended.

How to claim superannuation terminal illness benefits

The first step in the claims process is to contact your superannuation provider to start the claim process for the release your superannuation benefits. Whilst each superannuation provider will have different procedures, your provider will likely require you to complete an eligibility check and prepare claim forms.

Once claim forms are completed and returned to the provider, your claim will be assessed and a decision will be made as to whether you are eligible or not eligible to claim. Most providers will acknowledge receipt of your claim within 5 business days and make an assessment within 6 months.

How is a superannuation terminal illness benefit paid?

Before any payout is made, you will be required to provide certified identification to your superannuation provider. If you are eligible, your terminal illness benefit will be paid as a lump sum benefit.

You should be aware that whilst there is no set limit on the amount you can withdraw from your superannuation, payments are subject to the specific rules of your superannuation provider.

You should consider speaking with a financial adviser about the implications of the lump sum benefit.

Generally, if you have the required medical certification stating that a terminal medical condition existed either at the time of the payment or within 90 days of receiving the payment, the lump sum benefit will be non-assessable non-exempt income (tax-free).

How can IM Lawyers help?

At IM Lawyers, we have the expertise to guide you through what can be a complex claim process during an extremely difficult time in your life.

In addition to guiding you through the claims process with your superannuation provider, we can assist you in completing a Binding Death Benefit Nomination ("BDBN"). A BDBN will ensure that any benefit from a successful claim which has not been processed before your death, can be given to your nominated beneficiaries in a timely manner.