Terminal benefit
If the deceased person was getting a benefit when they died and terminal benefit was paid, the continued payment may form part of the deceased person's assessable estate.
Surviving partner
If the benefit is paid to a couple, both the deceased person's and the surviving partner's portion of the benefit is paid as terminal benefit.
The deceased person's portion of terminal benefit is generally paid to their own bank account. However, a surviving partner can apply to have the deceased person's portion of terminal benefit paid to them.
Surviving child
If the deceased person has no surviving partner, but has a surviving child, the payment of terminal benefit can be made to the person caring for the deceased person's child.
When terminal benefit is included in the deceased person's estate
Terminal benefit payments become part of the deceased person's assessable estate when it is paid to the deceased person's nominated bank account.
When terminal benefit is not included in the deceased person's estate
Terminal benefit payments do not become part of the deceased person's estate when it is paid to the surviving partner or to an account that is shared with the surviving partner.
In this case the payment may become a cash asset of the surviving partner.
Note terminal benefit payments do not become part of the deceased person's estate if is paid to a person caring for their surviving child.
For more information see:
- Death of a client in the relevant main benefit
- Asset exemption
Legislation
- After death of beneficiary receiving specified benefit section 326 Social Security Act 2018
- Required manner of payment: payment on death of beneficiary section 346 Social Security Act 2018
