Private ruling: Death benefit - financial dependency
Date of advice: 1 May 2026
Published: 6 July 2026
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Is the beneficiary a death benefits dependant of the deceased according to section 302-195 of the Income Tax Assessment Act 1997 (ITAA 1997), due to being a person who was a dependent of the deceased just before they died? | A1: No.

Relevant facts and circumstances: The beneficiary is the adult child of the deceased. The deceased died on XX XX 20YY (Date of Death). The beneficiary was born on XX XX 19XX and was therefore older than 18 years at the Date of Death. The deceased's superannuation fund paid a death benefit payment to the deceased's estate on XX XX 20YY. The amount of the payment was $XXX,XXX.XX, including a taxable component of $XXX,XXX. No tax was withheld from this payment. ATO records show the deceased's residential address as XXXXXXXXX from XX XX 20YY to the Date of Death. Bank statements provided with the ruling application also show this as the deceased's address. The following documentation was provided in support of the beneficiary's private ruling application: • Death certificate for the deceased • Certified statutory declaration from XXXXXXXX, executor of the deceased's estate, dated XX XX 20YY • Certified statutory declaration from the beneficiary, dated XX XX 20YY • An excerpt from a XXXXXX account statement, account number XXXX-XXXXX, for the month of XXXXXX 20YY • An excerpt from a XXXXXX account statement, account number XXXX-XXXXX, for the month of XXXXXXXX 20YY • An excerpt from a XXXXXXXX account statement, account number XXXX-XXXXX, for the month of XXXXXXXX 202YY • An excerpt from a XXXXXXXX, account number XXXX-XXXXX, for the period of XX XX 2022 to XX XX 20YY • A letter from the deceased's superannuation fund, dated XX XX 20YY, and an attached Exit Statement, showing the payment of the total account balance of $XXX,XXX.XX (including a taxable component of $XXX,XXX.XX) to the deceased's estate • 'Death Benefit Application for a Nominated Beneficiary', showing XXXXXX, executor of the deceased's estate, as the nominated beneficiary • An excerpt from a bank statement, with the letterhead 'Statutory Trust Account - Solicitors', for the period XX XX 20YY to XX XX 201YY, showing a credit of $XXX,XXX.XX on XX XX 20YY. The excerpt shows no account name or number. No corresponding bank statement was provided for cross-referencing purposes, to show the account the transfer came from. • A copy of Trust Account Receipt #XXXXXX, addressed to the beneficiary, with the following details: - XX XX 20YY File DMS XXXXX, XXXXXXXX - Purchase from XXXXXXXXX as trustee -XX XXXXX XXXXX - Settlement money, costs and outlays - Received from XXXXXXX on XX XX 20YY - Received by Direct Deposit - Trust Account Receipt #XXXXX - Amount Received $XXX,XXX.XX The solicitor advised that this amount represented 'the purchase monies, cost and outlays deposited into our trust account to the account of (the beneficiary) when this office acted for them as the buyer in the conveyancing of that purchase'. The executor's statutory declaration provided the following: • There was a considerable amount of money that was transferred out of the deceased's bank accounts to the beneficiary over a considerable period of time, which reflected the beneficiary's financial dependence on the deceased. • The provided account statement(s) show transfers from the deceased's bank accounts to the beneficiary. The beneficiary's statutory declaration provided the following: • In 20YY, the deceased contributed $XXX,XXX for the purchase of the beneficiary's home, as well as additional costs associated with the purchase. The beneficiary stated that they were under no obligation to repay the money, and it was given to them as a gift. • The deceased purchased two cars for the beneficiary. • The deceased assisted the beneficiary on a regular basis over the course of at least four years, purchasing groceries which cost up to $XXX per week. • Though they worked part-time for approximately two years, the beneficiary was dependent upon the contributions of the deceased. In response to requests for further information, the following documents were provided: • Account statements, account number XXXX-XXXXX, account names XXXXX and XXXXX for the period XX XX 20YY to XX XX 20YY. These statements showed the following, up to the Date of Death: - Transfers to the beneficiary - $XX,XXX - Cash withdrawals - $X,XXX - Grocery purchases - $XX,XXX • Account statements, account number XXXX-XXXXX, account name XXXXX, for the period XX XX 20YY to XX XX 20YY. These statements showed the following, up to the Date of Death: - Transfers to the beneficiary - $X,XXX - Cash withdrawals - $X,XXX - Grocery purchases - $X,XXX.XX In response to requests for further information, the following statements were provided: • No documentary evidence can be provided regarding the purchase of the motor vehicles. It is understood the deceased paid cash. • Regarding the money ($XXX,XXX.XX) paid by the deceased in 20YY, to assist the beneficiary with the purchase of a house, no further documentation can be provided, nor can any information be provided regarding how the balance of the purchase (if any) was funded. • Provided bank statements show transfers from the account of the deceased directly to the beneficiary. • Provided bank statements evidence purchases of groceries for the beneficiary by the deceased. • Provided bank statements show ATM withdrawals which further evidence financial support provided by the beneficiary to the deceased.

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 995-1(1) | Income Tax Assessment (1997 Act) Regulations 2021 Section 302-200.01 | Income Tax Assessment (1997 Act) Regulations 2021 Section 302-200.02 Detailed reasoning | Meaning of death benefits dependant | Subsection 995-1(1) of the ITAA 1997 states that the term 'death benefits dependant' has the meaning given by section 302-195 of the ITAA 1997. Subsection 302-195(1) of the ITAA 1997 defines a death benefits dependant as follows: | A death benefits dependant, of a person who has died, is | a. the deceased person's spouse or former spouse; or | b. the deceased person's child, aged less than 18; or | 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. any other person who was a dependant of the deceased person just before he or she died. | As the beneficiary is the adult child of the deceased, paragraphs 302-195(1)(a) and (b) of the ITAA 1997 are not applicable. | As the beneficiary and the deceased did not live together, as is required by paragraph 302-200(1)(b) of the ITAA 1997 (and there is no information to suggest that the reason they did not live together is that either or both of them suffered from a physical, intellectual or psychiatric disability, as required by paragraph 302-200(2)(c) of the ITAA 1997), the requirements of paragraph 302-195(c) of the ITAA 1997 (interdependency relationship) cannot be satisfied. Therefore, it is necessary to consider paragraph 302-195(1)(d) of the ITAA 1997 - whether the beneficiary 'was a dependant of the deceased person just before he or she died.' | The definition of death benefits dependant does not stipulate the nature or degree of dependency required to be a dependant of the deceased person in paragraph 302-195(1)(d) of the ITAA 1997. However, it is generally accepted that this paragraph refers to financial dependence. | There are a number of case law decisions that specify what is required to establish financial dependency. Specifically, the definition of dependency was addressed and interpreted in the High Court case of Kauri Timber Co (Tasmania) Pty Ltd v. Reeman (1973) 47 ALIR 184. Gibbs J, in speaking to previous cases on the issue of dependency, stated that: | The principle underlying these authorities is that it is the actual fact of dependence or reliance on the earnings of another for support that is the test. | This was also reflected in Edwards v Postsuper Pty Ltd [2007] FCAFC 83 where the Full Court of the Federal Court agreed with the Tribunal that while the deceased provided many gifts to their family, it did not consider that would make the appellants and their family financially dependent on the deceased. | Senior Member Pascoe in Re Malek v Federal Commissioner of Taxation [1999] AATA 678 (Malek) in providing his view on the meaning of dependence stated: | In my view, the relevant financial support is that required to maintain the person's normal standard of living and the question of fact to be answered is whether the alleged dependant was reliant on the regular continuous contribution of the other person to maintain that standard. | Assistance with house purchase | The beneficiary stated, via the provided statutory declaration, that in 20YY, the deceased contributed $XXX,XXX for the purchase of the beneficiary's home, as well as additional costs associated with the purchase. It was stated that there was no obligation on the beneficiary to repay this money, as it was a gift. | Two pieces of evidence were provided in support of this statement; with confirmation that no further evidence or information could be provided. | That evidence consisted of: | • An excerpt from a bank statement, with the letterhead 'Statutory Trust Account - Solicitors', for the period XX XX 20YY to XX XX 20YY, showing a credit of $XXX,XXX.XX on XX XX 20YY. The excerpt shows no account name or number. No corresponding bank statement was provided for cross-referencing purposes, to show the account the transfer came from. | • A copy of Trust Account Receipt #XXXXXX, addressed to the Beneficiary, showing an amount of $XXX,XXX.XX received from the Beneficiary on XX XX 20YY | It is not considered that the above evidence is sufficient to confirm the amount was provided to the Beneficiary by the Deceased, for the following reasons: | • The bank statement excerpt contains no account number, or other identifying information | • No corresponding bank statement has been provided, to show the source of the transfer to the account | The documentation provided does not provide definitive evidence that the amount of $XXX,XXX.XX was provided by the deceased to the beneficiary. | In any event, were the documentation provided sufficient to verify the money was provided by the deceased to the beneficiary, the date of XX XX 20YY is more than three years prior to the Date of Death. | Paragraph 302-195(1)(d) refers to the person being a dependant of the deceased person just before he or she died (emphasis added). | It is considered that the period of time which had elapsed between the purported financial support, and the Date of Death, is too great for the above amount to be considered when establishing whether financial dependence existed in this case. | Further, the amount does not represent either a regular or continuous contribution, as per Malek . | Purchase of motor vehicles | No evidence has been provided in support of the statement that the deceased purchased two cars for the beneficiary. | Other financial assistance | Transfers to beneficiary | The provided bank statements show transfers directly to the beneficiary, over the period XX XX 20YY to the Date of Death, totalling $XX,XXX. | It is noted that provided bank statements showed further transfers after the Date of Death. These transfers cannot be considered for the purposes of determining whether the beneficiary was financially dependent on the deceased, as paragraph 302-195(1)(d) of ITAA 1997 refers to 'any other person who was a dependant of the deceased person just before he or she died ' (emphasis added). | Cash withdrawals | Bank statements provided for the deceased, for the period XX XX 20YY to the Date of Death (XX XX 20YY), show total withdrawals of $X,XXX, being $X,XXX from account number XXXX-XXXXX, and $X,XXX from account number XXXX-XXXXX. | It is not possible to confirm these withdrawals were for the benefit of the beneficiary. | Grocery purchases | The beneficiary stated that the deceased purchased groceries for them over an extended period of time, at a cost of up to $XXX per week. | The deceased's provided bank statements (account numbers XXXX-XXXXX and XXXX-XXXXX) show transactions which appear to relate to the purchase of groceries (being transactions at a local supermarket), totalling $XX,XXX,XX over the period XX XX 20YY to the Date of Death. | Again, it is not possible to confirm how much of this amount, if any, was for the benefit of the beneficiary. | Insufficient documentation has been provided to verify the claimed level of support provided to the beneficiary by the deceased. | While it is accepted that the deceased provided some level of financial support to the beneficiary, the verified amount of that support is not of a level of support which would constitute financial dependency. | The evidence provided does not show that the beneficiary was dependant on the deceased for the payment of their ordinary living expenses. | Conclusion | Based on the evidence provided, the Commissioner is not satisfied that the beneficiary was a person who was substantially reliant on regular and continuous financial support from the deceased for their ordinary living expenses. | As a result, paragraph 302-195(1)(d) of the ITAA 1997 is not satisfied, and the beneficiary is not a death benefits dependant of the deceased.