Private ruling: Superannuation death benefits
Date of advice: 21 May 2019
Published: July 2019
Ruling period: Income year ending 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Are two beneficiaries each considered a death benefits dependant of the deceased in accordance with section 302-195 of the Income Tax Assessment Act 1997 (ITAA 1997 by virtue of being in an interdependency relationship with the deceased under section 302-200 of the ITAA 1997 just before they died? | A1: Yes

Relevant facts and circumstances: The Deceased passed away in 2017 after suffering from an illness. The Deceased resided with their parents who were the two beneficiaries. The residence was owned by the Deceased and the parents as joint tenants. There are no other jointly held assets. In 2011 the Deceased took a sabbatical and moved into the residence for one year where the parents were already residing. Both parents were suffering from illnesses. In 2013 the Deceased terminated their employment and moved into the residence with the parents again. The Deceased resided there until death. During this time the Deceased and the parents supported each other emotionally and financially as all three were suffering from various illnesses. There was no intention for the Deceased to move out of the residence prior to death. The parents supported the Deceased in day to day living due to the Deceased’s illness. The Deceased provided support for the parents on a day to day basis. Household expenses were shared between the Deceased and the parents. Rates, home insurance, bills, maintenance expenses and groceries were equally split between the three joint tenants. A PAYG payment summary – superannuation lump sum a payment was made to the Estate of the Deceased in the 2017-18 financial year.

Relevant legislative provisions: Income Tax Asessment Act 1997 Section 302-195 | Income Tax Assessment Act 1997 Section 302-200

Reasons for decision: Summary: The two beneficiaries are each a death benefits dependant of the Deceased for the purposes of section 302-195 of the ITAA 1997. | Detailed Reasoning - Detailed reasoning: 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) 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. *To find definitions of asterisked terms, see the Dictionary, starting at 995-1. In this case, paragraphs 302-195(1)(a), (b) and (d) do not apply because the beneficiaries are the parents of the Deceased and the facts do not indicate that they were a dependant of the Deceased. Therefore, to be a death benefits dependant of the Deceased, each parent must have an interdependency relationship with the Deceased just before the Deceased died. Under subsection 302-200(1), two persons (whether or not related by family) have an ‘ interdependency relationship’ 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. Based on the evidence provided, it is considered that both parents were each in an interdependency relationship with the Deceased just before the Deceased died because: ● they had a close personal relationship; ● they lived together; and ● each parent provided the Deceased with financial and domestic support and personal care as required by subsection 302-200(1). Consequently, the two beneficiaries are each a death benefits dependant for the purposes of section 302-195.