Private ruling: Superannuation death benefits
Date of advice: 3 June 2019
Published: August 2019
Ruling period: Income year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Was the payment made by the deceased taxpayer's pension provider a superannuation a superannuation benefit defined in subsection 307-5(1) Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes

Relevant facts and circumstances: The Deceased was a member of a complying superannuation fund (the Fund). The trustee of the Fund was an entity (the Trustee). The Deceased has been in receipt of an account-based pension from the Fund (i.e. a pension complying with regulation 1.06(9A)(a) of the Superannuation Industry (Supervision) Regulations 1994 (SISR). The Deceased granted an Enduring Power of Attorney to an individual (the Attorney). In 20XX-XX income year, the Attorney requested an amount be withdrawn from the Deceased's account-based pension account. The Trustee resolved agreed to make the payment as requested by the Deceased In the 20XX-XX income year, the Trustee commenced liquidating listed securities with the intention of depositing the requested amount into the Deceased's bank account. The Trustee notified the Deceased that they would deposit the nominated amount into the Deceased's bank account. The Deceased passed away a few days before the payments from the Fund appeared their bank account.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 302-A | Income Tax Assessment Act 1997 Section 307-5. | Income Tax Assessment Act 1997 Subsection 307-5(1) | Income Tax Assessment Act 1997 Section 307-15.

Reasons for decision: Summary: Subsection 995-1(1) of the ITAA 1997 states that a 'superannuation death benefit' has the meaning given by section 307-5 of the ITAA 1997. Superannuation benefits are defined in section 307-5 of the ITAA 1997. In accordance with Item 1 of the table in subsection 307-5(1) of the ITAA 1997 a superannuation member benefit is a payment to you from a superannuation fund because you are a fund member; Superannuation death benefit is defined in subsection 307-5(4) of the ITAA 1997 as being a payment described in Column 3 of the table in subsection 307-5(1). A superannuation death benefit is described in Column 3 of Item 1 of the table in subsection 307-5(1) as: ... A payment to you from a superannuation fund, after another person's death, because the other person was a fund member. Section 307-15 of the ITAA 1997 applies for the purposes of determining whether a payment is made to you, or received by you, and states: A payment is treated as being made to you, or received by you, if it is made: a) for your benefit; or b) to another person or to an entity at your direction or request. In this case, the payments were made by the Fund to the Deceased's nominated savings account as requested by the Attorney. As such, they are superannuation member benefits paid by the Fund to the Deceased. Upon receipt by the Deceased, these payments lose their character of superannuation member benefits and simply become money which is part of the Deceased's estate to be distributed to the Deceased's beneficiaries in accordance with their wishes. Therefore, the payments made by the Fund to the Deceased's nominated savings account are not superannuation death benefits for the purposes of subdivision 302-A of the ITAA 1997.