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How to provide for your financial dependants

Nov 11, 2021

How to provide for your financial dependants Providing for your family if something happens to you is a priority for every parent. There are several things a member of the Government Employees Pension Fund (GEPF) needs to do to make sure their financial dependants are taken care of.

Update your nomination forms

One of the most important documents you need to keep up to date is your beneficiary nomination form. This specifies who your legal and financial dependants are, along with their contact details.

It will make it easier for the trustees of the Fund to make the relevant payments, ensuring your family receives the urgent financial support they need.

Your retirement benefits do not fall under your will and are paid out to your financial dependants, including children from another relationship or a former spouse receiving maintenance.

Update your will

Although the GEPF takes note of your will as an indication of your intention, it will be governed by the rules of the Fund, which require that the trustees consider financial dependency.

It is still important to have a will in place for your other assets. You must nominate a guardian if you have young children. This is especially important for single parents.

Review your estate

As a parent you need to make sure you have left sufficient funds to support your minor children. Understand what benefits will be paid by the GEPF and supplement those with life cover if required.

Also make sure you have life cover in place to settle your debts and estate fees. Your life cover will be paid out to whoever you nominated in your policy and not according to your will. You can make your estate the beneficiary.

Who is a financial beneficiary?

It is important to note that while your nomination form can assist the trustees in identifying and contacting beneficiaries, the trustees are still obliged to identify all legal or financial dependants and ensure that the death benefit is distributed equitably amongst the dependants.

Only if there are no financial dependants would the specified beneficiary on the nomination form be considered.

A financial/legal dependant includes:

  • A spouse;in the case of customary marriage, if there are two valid spouses, both of them will get an equal share of the annuity;
  • A child under the age of 22;
  • A parent or anyone who can prove financial dependency.

A financial dependant does not include:

  • An adult child who is not receiving financial support from the member ‒ they can only be considered if there are no other dependants;
  • A former spouse or partner who has not received any financial support and financial support is not stipulated in the divorce agreement.

What benefits will be paid?

Spousal pension

If a member passes away before retirement with ten or more years of service, the spouse receives a monthly pension equal to 50% of the annuity the member would have received had the member retired on their date of death. This is a lifelong pension and does not stop if the spouse remarries.

If the member has less than ten years of service, the value of the pension fund will be paid out to beneficiaries.

If the spouse was a dependant on the medical aid, the spouse may be entitled to a medical benefit.

Child pension

A child is entitled to a child’s pension up to the age of 22, which could be extended if the child is disabled.

Funeral Benefits

Members and spouses have a funeral benefit of R15 000, while children have a funeral benefit of R6 000.

This article is part of a member education series in partnership with the GEPF.

 

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Maya Fisher-French author of Money Questions Answered

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