Private ruling: Superannuation death benefits
Date of advice: 16 January 2017
Published: March 2017
Ruling period: Income year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you a death benefits dependant of a person who has died (the Deceased) under section 302-195 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes

Relevant facts and circumstances: The Deceased died while on holidays overseas. The Deceased was not married, not in a de factor relationship and had no children. You are a parent of the Deceased. The Deceased suffered from a medical illness and had underwent years of counselling and medication. The Deceased lived with you in an overseas country until they moved to Australia. After the Deceased moved to Australia, you visited the Deceased in Australia once a year; and the Deceased visited you several times a year. Several years ago, you moved to Australia and lived with the Deceased until their death. During this time, you also stayed on your boat during weekends and holidays. During the Deceased‘s medical episodes, you provided care to the Deceased by: ● attending medical appointments with the Deceased: ● cooking their meals ● doing their housework ● doing their laundry ● buying their groceries ● paying their bills and household expenses, and ● maintaining their garden. You provided the Deceased with ongoing emotional support during their illness and during the break-up with their partner. You provided ongoing financial support to the Deceased by paying for their groceries and paying their household and other bills.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 302-195 | Income Tax Assessment Act 1997 section 302-200 | Income Tax Assessment Act 1997 subsection 302-200(1) | Income Tax Assessment Act 1997 subsection 302-200(2) | Income Tax Assessment Act 1997 subsection 302-200(3) | Income Tax Assessment Regulations 1997 subregulation 302-200.01 | Income Tax Assessment Regulations 1997 subregulation 302-200.02

Reasons for decision: Summary: You were in an interdependency relationship with the Deceased under section 302-200 of the ITAA 1997 just before the Deceased died. Therefore, you are a death benefits dependant of the Deceased for the purposes of section 302-195 of the ITAA 1997. | Detailed Reasoning - Death benefits dependant: Section 302-195 of the ITAA 1997 defines death benefits dependant , of a person who has died, as: (a) the deceased person’s *spouse or former spouse; or (b) (b) the deceased person’s *child, aged less than 18; or (c) (c) any other person with whom the deceased person had an interdependency relationship under section 302-200 just before he or she died; or (d) (d) any other person who was a dependant of the deceased person just before he or she died. *To find definitions of asterisked terms, see the Dictionary, starting at 995-1. As you are a parent of the Deceased, paragraphs 302-195(1)(a) and (b) of the ITAA 1997 do not apply in this case. Therefore, to conclude that you are a death benefits dependant of the Deceased, it must be established that you had an interdependency relationship with the Deceased just before the Deceased died, or that you were a dependant of the Deceased just before the Deceased died. | Detailed Reasoning - Interdependency relationship: Subsection 302-200(1) of the ITAA 1997 provides that two persons (whether or not related by family) have an interdependency relationship under that section if: (a) they have a close personal relationship; and (b) they live together; and (c) one or each of them provides the other with financial support; and (d) one or each of them provides the other with domestic support and personal care. In accordance with subsection 302-200(2) of the ITAA 1997, two persons may also have an interdependency relationship if they have a close personal relationship but cannot satisfy any of the other requirements of subsection 302-200(1) of the ITAA 1997 because either or both of them suffer from a physical, intellectual or psychiatric disability. Subsection 302-200(3) of the ITAA 1997 provides that matters and circumstances that are, or are not, to be taken into account in determining whether two persons have an interdependency relationship under that section may be specified in the regulations. To that effect, regulation 302-200.01 of the Income Tax Assessment Regulations 1997 (ITAR 1997) provides that the matters to be taken into account for the purposes of paragraph 302-200(3)(a) of the ITAA 1997 (where relevant) are all the circumstances of the relationship between the persons, including (in this case): (i) the duration of the relationship; and … (ii) the degree of mutual commitment to a shared life; and … (iii) the reputation and public aspects of the relationship; and (iv) the degree of emotional support; and (v) the extent to which the relationship is one of mere convenience; and … In accordance with regulation 302-200.02 of the ITAR 1997, two persons have an interdependency relationship if: (a) they have a close personal relationship; and (b) they do not satisfy the other requirements set out in subsection 302-200(1) of the Act; and (c) the reason they do not satisfy the other requirements is that they are temporarily living apart. | Detailed Reasoning - Close personal relationship: Generally, a close personal relationship as specified in subsection 302-200(1) of the ITAA 1997 would not exist between a parent and child. This is because the relationship between a parent and child would be expected to change significantly over time and there would be no mutual commitment to a shared life between the two. However, where, as in this case, unusual and exceptional circumstances exist, a relationship between a parent and child may be treated as an interdependency relationship for the purposes of subsection 302-200(1) of the ITAA 1997. In this case, it is considered that the relationship between you and the Deceased was over and above that of a normal family relationship and that a close personal relationship existed as required by paragraph 302-200(1)(a) of the ITAA 1997. The matters that indicate that you and the Deceased had a close personal relationship prior to the Deceased’s death are: ● The Deceased lived with you for most of their short life. ● A close familial relationship existed between you and the Deceased prior to, and at the time of, the Deceased’s death. ● During the time you lived with the Deceased, you provided the Deceased with emotional support, personal care and domestic support. ● Your and the Deceased’s behaviour indicates a mutual intention that your close familial relationship was permanent: you maintained regular contact once you lived separately after the Deceased moved to Australia; and you eventually moved to Australia to live/be with the Deceased. ● You provided extensive emotional and domestic support and personal care to the Deceased despite living separately at times, which indicates that your relationship was not one of mere convenience. | Detailed Reasoning - Living together: You lived with the Deceased for most of their life. The Deceased moved to Australia but you regularly visited each other until you eventually moved to Australia to live with the Deceased. You lived with the Deceased in Australia until the Deceased’s death apart from weekends and holidays away on your boat. Had the Deceased not been overseas at the time of their death, you would have still been living with the Deceased. Hence, it is considered that you and the Deceased were living together at the time of the Deceased’s death. | Detailed Reasoning - Financial support: Financial support under paragraph 302-200(1)(c) of the ITAA 1997 is satisfied if some level (not necessarily substantial) of financial support is being provided by one person (or each of them) to the other. You provided financial support to the Deceased for most of their life by paying for the household and other expenses incurred by the Deceased. Therefore, it is considered that you provided financial support to the Deceased. | Detailed Reasoning - Domestic support and personal care: Domestic support and personal care will commonly be of a frequent and ongoing nature. For example, domestic support services will consist of attending to the household shopping, cleaning, laundry and like activities. Personal care services may commonly consist of assistance with mobility, personal hygiene and generally ensuring the physical and emotional comfort of a person. You provided the Deceased with domestic support services including household duties, cleaning, laundry and preparation of meals. You also accompanied the Deceased to medical appointments and provided them with physical and emotional support during their illness and during the break-up with their partner. In view of the above it is considered that the requirement in paragraph 302-200(1)(d) of the ITAA 1997 has been met. Therefore, you had an interdependency relationship with the Deceased under section 302-200 of the ITAA 1997 and you are a death benefits dependant of the Deceased for the purposes of section 302-195 of the ITAA 1997.