Private ruling: Death benefits - meaning of death benefits dependant
Date of advice: 1 June 2021
Published: August 2021
Ruling period: Year ended 30 June 2020
Date scheme commenced: 1 July 2020

Ruling: Q1: Did the Deceased die in line of duty for the purposes of section 302-195 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No

Relevant facts and circumstances: The Deceased was a member with the Australian Department of Defence. The Deceased entered the Australian Defence Force early 201X. The Deceased was engaging in a routine training excise while off duty for the purpose of maintaining peak physical fitness. The Deceased collapsed while exercising and was taken to hospital. The Deceased was found to have suffered from an injury and passed away from the injuries, days later. The date of death is listed on the death certificate. Under the employment specifications of the relevant (part One) employment category, set outs the physical standards of employment. This first extract is from the relevant (Part One) Employment Category Capability Requirements 21. Physical Employment Standards. The Physical Employment Standards Assessment (PESA) has been developed for all XXX and Employment Categories to assess the minimum level of physical capacity required by XXX members to perform their duties. The PESA elements are based on the essential tasks required to be performed by all members of the XXX. Being task based, the PESA is gender and age neutral. All officers are to meet the requirements of their CORPs and EC listed in Reference H. (This reference {H} will be detailed in extract three- Instruction (Personnel), Part 8, Chapter 4, Physical Training A lump sum death benefit was paid from the Fund to the Estate and then distributed to the beneficiaries of the Estate.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 302-60 | Income Tax Assessment Act 1997 Section 302-195 | Income Tax Assessment Act 1997 Subsection 302-195(1) | Income Tax Assessment Act 1997 Subsection 302-195(2) | Income Tax Assessment Act 1997 Subsection 302-195(3) | Income Tax Assessment Regulations 1997 Regulation 302-195 | Income Tax Assessment Regulations 1997 Subregulation 302-195(2) | Income Tax Assessment Regulations 1997 Subregulation 302-195(3) | Income Tax Assessment Regulations 1997 Subregulation 302-195(6) | Income Tax Assessment Regulations 1997 Subregulation 302-195(7) | Income Tax Assessment Regulations 1997 Subregulation 302-195(8) | Income Tax Assessment Regulations 1997 Subregulation 302-195(9) | Income Tax Assessment Regulations 1997 Section 302-195A | Income Tax Assessment Regulations 1997 Subsection 302-195A(2) | Income Tax Assessment Regulations 1997 Subsection 302-195A(8)

Reasons for decision: Summary: The Deceased did not die in line of duty for the purposes of section 302-195 of the ITAA 1997 because the Deceased died was off-duty at the time of passing. | Detailed Reasoning - Detailed reasoning: Section 302-60 of the ITAA 1997 provides that a superannuation death benefit paid as a lump sum to a person who is a death benefit dependant is not assessable income and is not exempt income of the person. By virtue of subsection 995-1(1) of the ITAA 1997, a death benefit dependant is defined in subsection 302-195(1) of the ITAA 1997 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. In addition, subsection 302-195(2) of the ITAA 1997 treats an individual who receives a superannuation lump sum because of the death of another person as a death benefits dependant of the deceased person in relation to the lump sum if the deceased person 'died in the line of duty' as: (a) a member of the Defence Force; or (b) a member of the Australian Federal Police or the police force of a State or Territory; or (c) a protective service officer (within the meaning of the Australian Federal Police Act 1979). Section 302-195A of the ITAR 1997 sets out the circumstances in which a person is taken not to have died in the line of duty. Paragraph 302-195A(2)(a) provides that where a military person or police person is off duty, the person is not taken to have died in line of duty. For interpretation purposes of 'off duty' subsection 302-195A(8) of the ITAR 1997 for this regulation, the time when a military or police person is off duty includes a time when he or she is: (a) travelling to or from his or her place of work; or (b) on a rostered day off work; or (c) on leave from work. In this case, the Deceased was on a rostered day off and therefore meets the interpretation of 'off-duty. Furthermore, for subsection 302-195A(2) to apply, none of the circumstances in subsections 302-195(3),(6),(7),(8) and (9) can apply. These subsections state: 302-195(3) A circumstance is that: (a) the military or police person was off duty at the time of his or her death; and (b) his or her death occurred: (i) in the course of an attempt to arrest a suspected offender; or (ii) in the course of an attempt to prevent an offence; or (iii) in the course of an attempt to rescue a person; or (iv) while he or she was travelling to a place of work as a result of being recalled to duty. 302-195(6) A circumstance is that the military or police person: (a) was a member of the Defence Force; and (b) died while serving overseas, if the service was: (i) warlike service mentioned in paragraph 6(1)(a) of the Military Rehabilitation and Compensation Act 2004; or (ii) non-warlike service mentioned in paragraph 6(1)(b) of the Military Rehabilitation and Compensation Act 2004. 302-195(7) A circumstance is that the military or police person: (a) was a member of the Australian Federal Police or a protective service officer within the meaning of the Australian Federal Police Act 1979 ; and (b) died while serving overseas, if the service was: (i) at a place specified in a determination under subsection 40H(1) of the Australian Federal Police Act 1979 ; and (ii) on a peace-keeping or capacity-building mission. 302-195(8) A circumstance is that the military or police person: (a) was a member of a State or Territory police force; and (b) died while serving overseas, if the service was: (i) undertaken as a special member of the Australian Federal Police under section 40E of the Australian Federal Police Act 1979 ; and (ii) on a peace-keeping or capacity-building mission. 302-195(9) A circumstance is that, as a result of action taken because the person was a military or police person, the military or police person sustained an injury from which he or she died: (a) immediately; or (b) within 12 months after sustaining the injury. In this case, the none of the circumstances outlined in subsections 302-195(3),(6),(7),(8) and (9) of the ITAR 1997 apply to the Deceased's situation. Therefore, the Deceased did not die in line of duty for the purposes of subsection 302-195(2) of the ITAA 1997 and the beneficiaries to his estate will not be treated as dependants.

This ruling applies for the following period periods :