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Child Pensions

Under certain circumstances you may wish to nominate a qualifying child of yours to receive your death benefit as a child pension.

What is a child pension?

A child pension is a simple way to provide tax effective income to your minor children (under 18 years of age), or certain other children that have a financial or disability dependency, in the event of your premature death. This means that you can nominate either part or all of your benefit to be paid as a child pension to one or more of your children. With the exception of a child who qualifies on disablement grounds, a child pension cannot continue beyond the child’s 25th birthday (and any remaining balance in the account must be commuted as a lump sum withdrawal at that time).

The benefits of a child pension may include:

  • the payment of a regular income stream that, subject to the prescribed minimum payment, can be structured to suit your child’s needs
  • the flexibility to restrict access to a lump sum until your child reaches a nominated age of up to 25 years (or earlier where required by law)
  • tax effective treatment of income payments and
  • generally tax free treatment of any lump sum that is paid to the child from the pension.

Generally the pension must be paid in trust for the child’s benefit.

If your nomination of a child pension is made in the prescribed manner and is consented to by the trustee then it will be binding on the trustee provided the law permits the child to be paid a pension upon your death. If the law does not permit us to pay a child pension but your nomination is otherwise valid, we will pay the relevant portion of your benefit to the nominated child as a lump sum.

You may also further direct us as to the restrictions, if any, which are to apply. Where we agree to the terms of the child pension as specified by you in your nomination, the terms cannot be changed after you die. As we agree to be bound by your instructions in advance it is very important that your nomination is kept up to date.

At any time by completing a new child pension schedule and, if required, a new non-lapsing death benefit nomination form, you may change:

  • the child you have nominated
  • your request to pay all or part of your benefit as a child pension or
  • the terms of the child pension.

How to apply for a child pension

Complete the Non-lapsing death benefit nomination form and a child pension schedule available from your adviser. On it you can nominate your beneficiaries and give us additional directions relevant for the child pension.

Child pensions are subject to terms and conditions. Further information is available from your adviser.