Should My Super Pension Be Reversionary to my Spouse?

The simple answer to this is not necessarily! The historical thinking on this was that it was always best to make a pension reversionary to your spouse. This meant that when the pensioner dies, the surviving spouse can continue to receive the tax advantaged (usually tax free) income and the superfund itself remains tax free.

However, depending upon the rules of the superfund, if you simply set up your spouse as your beneficiary via a non-lapsing beneficiary nomination for example then that person will probably be able to leave the monies in super and continue to receive a pension. The major reason for doing the latter way is to do with how Centrelink calculates entitlements.

If your Age Pension is income tested (as opposed to asset tested), it is better for the pension to be based on whoever in the partnership has the lower life expectancy, based on the Australian Bureau of Statistics Life Expectancy Tables. This is because generally at the time of commencing your pension, the older you are the better, as the portion of your superannuation pension that Centrelink doesn’t count is larger, and therefore should result in a higher age pension.

As clients of Customised Financial Planning we check this for you at your annual review and if there is any benefit to adjusting your existing situation we will provide the appropriate advice.

This information is of general nature only and is not intended as a personal advice. It does not take into account your particular investment objectives, financial situation and needs. Before making a financial decision you should assess whether the advice is appropriate to your individual investment objectives, financial situation and particular needs. We recommend you consult a professional financial adviser who will assist you.