{"id":108993,"date":"2026-02-04T07:31:00","date_gmt":"2026-02-03T20:31:00","guid":{"rendered":"https:\/\/en.econostrum.info\/au\/?p=108993"},"modified":"2026-02-03T19:48:59","modified_gmt":"2026-02-03T08:48:59","slug":"hidden-superannuation-rule","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/au\/hidden-superannuation-rule\/","title":{"rendered":"The Hidden Superannuation Rule That Could Destroy Your Inheritance Plans"},"content":{"rendered":"\n<p>Many Australians Are Unknowingly Leaving Their Children With a Massive Tax Bill. When superannuation is passed on, a hidden rule can quietly drain up to 32% of it\u2014unless families take steps in advance. Here&#8217;s what you need to know, and how to stop it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Hidden Cost of Dying With Superannuation<\/h2>\n\n\n\n<p>When someone with superannuation dies, the money they leave behind gets split into two components: a tax-free part, and a taxable part. Now here\u2019s the catch: if that taxable part is left to an adult child (or anyone not financially dependent on the deceased), the government takes a big slice\u2014up to 32%.<\/p>\n\n\n\n<p>Let that number sink in. Imagine leaving $1 million behind. Sounds like a secure gift, right? But if most of that balance is considered taxable, then $320,000 could be gone before your children even see it.<\/p>\n\n\n\n<p>And the kicker? Most people don\u2019t find out until it happens. The tax is rarely explained clearly. It\u2019s not on the average person\u2019s radar. It\u2019s buried in the fine print of the super system\u2014and it costs families a fortune every year.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Superannuation inheritance warning as Aussie kids face avoidable $320,000 tax hit: &#39;Completely gone&#39; <a href=\"https:\/\/t.co\/4MaPBx7XGI\">https:\/\/t.co\/4MaPBx7XGI<\/a><\/p>&mdash; Yahoo Finance Australia (@YahooFinanceAU) <a href=\"https:\/\/twitter.com\/YahooFinanceAU\/status\/2018469676297187647?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">February 2, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">A Strategy Few Use, but Many Could<\/h2>\n\n\n\n<p>Financial adviser Ben Nash, from Pivot Wealth, says to <a href=\"https:\/\/au.finance.yahoo.com\/news\/superannuation-inheritance-warning-as-aussie-kids-face-avoidable-320000-tax-hit-completely-gone-232537383.html\" target=\"_blank\" rel=\"noopener\">Yahoo Finance<\/a> that this tax hit can be \u201c<em>completely avoidable.<\/em>\u201d The solution is a relatively straightforward move called the withdrawal and recontribution strategy.<\/p>\n\n\n\n<p>Here\u2019s how it works. If you\u2019re over 60 and retired (which meets what\u2019s called a &#8220;<em>condition of release<\/em>&#8220;), you can withdraw money from your super without paying tax. Then, you can recontribute it as a non-concessional (after-tax) contribution. That money now sits in the tax-free component.<\/p>\n\n\n\n<p>Repeat that process over time, within annual limits, and you\u2019ve just shifted a big chunk of your super into the safe zone. No more 32% death tax hanging over your kids\u2019 heads. Sure, it\u2019s not the kind of task you can just knock out in a weekend.<\/p>\n\n\n\n<p>Contribution caps, eligibility rules, and fund-specific rules all make this a space where financial advice helps. But the principle? It\u2019s clear. Action now equals fewer regrets later.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Trillions in Motion\u2014and a Gaping Knowledge Gap<\/h2>\n\n\n\n<p>Australians over 60 are set to pass on trillions of dollars in the coming decades. The Productivity Commission estimated $3.5 trillion by 2050. Others, like JBWere, go further\u2014predicting $5.4 trillion over just 20 years.<\/p>\n\n\n\n<p>A huge share of that wealth is wrapped up in super funds. Which means millions of dollars are at risk of being involuntarily taxed simply because families weren\u2019t aware of how inheritance works under current super laws.<\/p>\n\n\n\n<p>It\u2019s hard not to see a disconnect here. A massive financial issue, affecting nearly every household, but barely mentioned in mainstream conversations. Even many retirees with substantial super balances have never heard of this tax\u2014let alone how to avoid it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Time, Not Complexity, Is the Real Obstacle<\/h2>\n\n\n\n<p>Most people aren\u2019t avoiding this tax out of laziness\u2014they just don\u2019t know it exists. And when they do hear about it, it can sound confusing or bureaucratic. But in reality, the concept is surprisingly manageable with time, planning, and a bit of professional support.<\/p>\n\n\n\n<p>It\u2019s not about chasing loopholes. It\u2019s about understanding how the system works\u2014and using the rules to protect your legacy. If you\u2019re a parent with<a href=\"https:\/\/en.econostrum.info\/au\/aussies-losing-superannuation-rule\/\" target=\"_blank\" rel=\"noopener\"> super<\/a>, the window to act is while you\u2019re alive and financially independent.<\/p>\n\n\n\n<p>If you&#8217;re an adult child, you might want to gently raise the topic with your parents\u2014awkward or not. Because one quiet conversation today could mean hundreds of thousands saved tomorrow.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Many Australians don\u2019t realise a silent rule in superannuation could shrink their legacy. What you don\u2019t know might cost your family dearly.<\/p>\n","protected":false},"author":14,"featured_media":108140,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-108993","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/108993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/comments?post=108993"}],"version-history":[{"count":1,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/108993\/revisions"}],"predecessor-version":[{"id":108995,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/108993\/revisions\/108995"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media\/108140"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media?parent=108993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/categories?post=108993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/tags?post=108993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}