The forfeiture rule and superannuation death benefits: emerging issues for trustees

This article was first published in the LexisNexis Financial Services Newsletter Issue 25.3 2026.

While the forfeiture rule is a longstanding position in law, its application to superannuation is not always clear. The lack of clarity is reflected in the perceived need for superannuation reforms dealing with the superannuation of victims of domestic violence. The purpose of this article is to consider how it may apply to superannuation death benefits.

The forfeiture rule at common law and under statute

The forfeiture rule is a longstanding common law principle of public policy, providing that a person who has unlawfully killed another should not be permitted to benefit from that wrongdoing eg, a killer cannot inherit any part of the estate of their victim despite being named  in the will. However, the rule is not confined to inheritance under a will and can operate across a range of benefits arising from death. In Helton v Allen,^[1] the High Court adopted the absolute formulation in the case of murder wherein the rule applies regardless of the killer’s motivations, the nature of the killing or any moral justification behind it. However, it is less clear in relation to manslaughter and other types of offences or potentially disentitling con- duct, with the approach depending on the law in the relevant jurisdiction. The legislative position varies across jurisdictions, as summarised in the table below:

The forfeiture rule and superannuation

The application of the forfeiture rule in the superan- nuation context raises distinct challenges because of the strict rules that apply to trustees about who they can pay a death benefit to and by when.

Unlike other assets, superannuation death benefits do not generally form part of a deceased member’s estate. They are distributed by trustees in accordance with the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) and the fund’s governing rules.

Where there is no death benefit nomination and the trustee is required by the governing rules to pay the member’s death benefit to their estate, there is no scope for the forfeiture rule to apply to the trustee. Instead, it is for the estate to determine distribution of assets having regard to the forfeiture rule.

Where the trustee has discretion to determine whether to pay a member’s death benefit to dependants or their estate, a dependant’s role in the member’s death can be an appropriate factor to consider when determining who to pay the death benefit to. However, trustees then need to grapple with various considerations discussed below.

Binding death benefit nominations

Members can make death benefit nominations which bind a trustee as to how they pay a member’s superan- nuation death benefits. The two types of death benefit nominations that bind the trustee are:

• lapsing binding nominations, regulated by reg 17A of the Superannuation Industry (Supervision) Regu- lations 1994 (Cth) (SIS Regulations) and which lapse after 3 years and
• non-lapsing binding nominations, relying on trustee consent and operating in accordance with the fund’s governing rules, and which do not lapse after any set period

Where a deceased member has a valid binding death benefit nomination in favour of a perpetrator, the trustee is normally obliged to pay the member’s death benefit in accordance with the nomination subject to the SIS Regulations and the governing rules. There is nothing in the SIS Regulations which expressly allows a trustee to depart from the member’s direction where the nomi- nated beneficiary has caused the member’s death. While the governing rules may specify circumstances which invalidate a non-lapsing nomination, these circum- stances do not often expressly refer to the nominated beneficiary causing the member’s death.

In the absence of an express rule invalidating a binding death benefit nomination in circumstances where the forfeiture rule would otherwise apply, there is a question about whether it in fact operates to invalidate the nomination. There is no clear position in this regard.

One option is for a trustee to seek court directions or an order applying the forfeiture rule, which can be slow and costly. Families of deceased members may also bring proceedings in their own right, though their standing to do so depends on the jurisdiction and the nature of their interest in the estate or superannuation benefit. In NSW, for example, the Forfeiture Act 1995 (NSW) permits “any interested person” (as defined, including persons with a “special interest” in the out- come) to apply to the Supreme Court for an order modifying the effect of the forfeiture rule.^[2] The costs and complexity of commencing court proceedings also remain a significant barrier.

Where court proceedings are commenced, in cases of murder, the forfeiture rule is generally considered to be of strict application. For manslaughter, however, the common law in most jurisdictions favours a case-by- case approach, introducing uncertainty for trustees and families. The recent Forfeiture SA applies to all forms of homicide recognised under the Criminal Law Consoli- dation Act 1935 (SA) but only operates prospectively in that jurisdiction.

Another option is to introduce additional death ben- efit nomination rules which invalidate a binding death benefit nomination in circumstances where the forfeiture rule applies.

Timely payment and a need to investigate

A fundamental tension arises between the trustee’s obligation to pay death benefits promptly and the need to withhold payment pending resolution of forfeiture rule questions. Under SIS Regulation 6.21(1)(c), a trustee must ensure that death benefits are cashed as soon as practicable after the member’s death.

ASIC Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve, published in March 2025, found that trustees ordinarily close between half and three quarters of death benefit claims within 180 days of being notified of the mem- ber’s death.^[3]

The two practical difficulties in applying the forfei- ture rule in superannuation are:

• the statutory requirement to pay death benefits as soon as practicable and without delay
• trustees are not a court and do not have the resources to undertake criminal investigations or the legal expertise to assess the guilt of an alleged perpetrator

The Australian Financial Complaints Authority (AFCA) does have some helpful comments in this regard:

Where a claimant was convicted of a crime related to the death of the deceased member, in circumstances where there was moral culpability, AFCA would generally con- sider it fair and reasonable for the trustee not to allocate any part of the death benefit to the claimant.

AFCA considers it would generally be reasonable for a trustee to defer making a decision about the distribution of a death benefit where criminal charges have been brought against a potential beneficiary, or it believes such charges may be brought in the foreseeable future, and it believes the outcome of such charges may have a bearing on its decision.^[4]

AFCA’s comments do support the view that the court is best placed to conduct the criminal assessment and that it is generally reasonable and fair for trustees to await the court process before making a payment.

However, issues still remain such as whether the forfeiture rule applies to assisted death cases.

Payment only to dependants or the LPR

Under the SIS Act and SIS Regulations, superannua- tion death benefits may only be paid to the deceased member’s dependants or their legal personal representa- tive (LPR).^[5] Dependants include spouses, children (of any age), financial dependants, and persons in an inter- dependency relationship with the member. The trustee may only pay the benefit to another individual where it has made reasonable enquiries and cannot identify a dependant or LPR.

Where the perpetrator is not a dependant or the LPR, no issue arises as the trustee can distribute the death benefit among the eligible beneficiaries.

Proposed law reforms

In March 2026, the Australian Government released a consultation paper Preventing perpetrators from access- ing victims’ super death benefits seeking submissions on policy options to prevent perpetrators of family and domestic violence from receiving their deceased vic- tim’s superannuation death benefits.^[6] These proposals seek to address the application of the forfeiture rule in the context of family and domestic violence only.

The government’s March 2026 consultation paper explores three reform options, being broad trustee dis- cretion, a prescribed approach based on court findings and referral to the deceased estate or a court. Each option attempts to balance timeliness, procedural fair- ness, and the protection of victim-survivors’ interests.

Forfeiture rule and managed investment schemes

A different position applies to managed investment schemes. Interests in registered schemes, which are regulated under Ch 5C of the Corporations Act 2001 (Cth), are ordinary property of the holder. Unlike super- annuation death benefits, they form part of the deceased’s estate on death. Standard form constitutions for regis- tered schemes typically include transmission clauses recognising the legal personal representative as the only person entitled to claim the deceased unitholder’s units. The LPR may, on production of appropriate evidence, elect to be registered as the holder or direct a transfer.

Because the deceased’s interest in the managed invest- ment scheme passes through to the estate, it remains subject to succession laws, including the court’s juris- diction to consider disentitling conduct in an application for a court order applying the forfeiture rule. The practical difficulties encountered in the superannuation context do not arise.

Implications for trustees

The intersection of the forfeiture rule and superan- nuation death benefits exposes significant gaps in the current legal framework. Trustees face uncertainty and conflicting obligations when it comes time to distribute death benefits where the situation is complex such as where there is evidence of family violence, coercive control and abuse-related death. The government’s March 2026 consultation represents an important step toward reform. Trustees and their advisers should expect changes to the framework governing death benefit administration, claims handling and governing rule design. Any reforms that follow from this process should be closely monitored.