Typically, a TBA credit arises on the commencement of a pension. There are special rules that modify the timing of when a death benefit pension is credited to a recipient’s TBA in respect of a death benefit:
The Reversionary Pension to dependent becomes entitled to it immediately upon person’s death. However, it will not be counted against the dependent’s Transfer Balance Cap until one year after death.
On the other hand, if the pension is non-reversionary and person’s dependent decides to commence a new death benefit pension, the balance used to commence that pension will be counted against the dependent ‘s Transfer Balance Cap at the time it commences
Please note that specific regulations and rules may apply in each jurisdiction, and it is always advisable to consult with a qualified professional or relevant authority for accurate and up-to-date information regarding pension and transfer balance cap calculations.
Source:
Understanding how the Transfer Balance Cap applies to death benefit pensions | AMP Capital
Death benefit pensions and the $1.6 million transfer balance cap | Leading SMSF Law Firm (dbalawyers.com.au)
Credits:
Sundaram Shanmugam
SMSF Team
