What is it?
An anti-detriment payment forms part of the total lump sum death benefit and is paid to the member's spouse, ex-spouse or child (including adult children). Simply put, the payment is a refund of contributions tax that may have been paid by a member over their lifetime.
How it works
When a death benefit is paid to a member's beneficiaries, it can be made up of a number of parts, including the member's account balance and any insurance benefit that may apply. It may also contain an additional payment called an ‘anti-detriment payment'. Superannuation funds are able to determine their own policy for anti-detriment payments and are not bound by law to pay them.
Tax may be payable on anti-detriment payments to adult children, as it does for death benefits, the amount of which will depend on the individual's circumstances. As with all estate planning and decisions about your super, everyone's situation is different and it is always recommended that you seek advice from a licensed financial adviser that takes into account your personal circumstances, to ensure you can make the most appropriate decisions for you and your family.
How to do it
If a payment is made, then your fund can apply to the Australian Tax Office for a rebate. Some super funds will only pay anti-detriment payments when a claim is made by the members' beneficiaries. As different funds treat these payments differently, it's important to speak to the fund in question for information about their anti-detriment policy if you have any super in a fund other than NGS Super.
NGS Super, however, automatically pays anti-detriment payments where they apply to lump sum death benefit payments to our members' beneficiaries.