Private ruling: Death benefits
Date of advice: 3 February 2026
Published: 23 March 2026
Ruling period: Income year ended 30 June 20XX | Income year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Was 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 in an interdependency relationship with the Deceased under section 302-200 of the ITAA 1997? | A1: No. | Q2: Are the superannuation lump sum death benefits received by the Beneficiary during the 20XX income year and 20XX income year excluded from their assessable income under section 302-60 of the ITAA 1997? | A2: No.

Relevant facts and circumstances: The Beneficiary is the adult child of the deceased person. The Beneficiary was born on Date A and was therefore older than 18 years when the Deceased died. The Deceased died Date B. The Beneficiaries lawyers applied for a private ruling. Along with the application, the following documentation was provided: a) A copy of the death certificate for the Deceased, showing date of death as Date B and place of residence. b) Grant of probate of the Will to the Beneficiary. c) Last Will and Testament of the Deceased, appointing the Beneficiary as executor and trustee of the Will. d) A member statement for all three members. With the Deceased closing balance. e) Title search for Property that was purchased in 19XX, that shows the Beneficiary and the spouse as joint tenants with 2/3 ownership and the Deceased as tenant in common with 1/3 in ownership. f) A statutory declaration provided from the Beneficiary declaring, among other statements, the following: i) The Beneficiary, the spouse and the Deceased brought a property that they lived in together until the purchase of the Property. ii) The Beneficiary recalls cooking every night as the Deceased was working shift work. iii) The Beneficiary has stated that upon moving into the Property, they would sometimes provide financial support to the Deceased including, telephone bills, food, electricity and rates, so the Deceased could pay for the granny flat being established. iv) From the Deceased's retirement, the Beneficiary assisted the Deceased as required with the cooking of meals and other domestic and personal duties, such as cleaning and washing. A detached granny flat was built on the Property, and the Deceased moved into the detached granny flat in 20XX with their parent. It has been provided that the detached granny flat is 20 metres from the Existing Dwelling; it is a 3-bedroom house along with lounge room, dining room, kitchen, toilet, bathroom, laundry, carport and veranda. The Deceased resided continuously in the detached granny flat from 20XX until the Deceased's death; the Beneficiary and the spouse along with their child from 20XX, remained residing in the Existing Dwelling. The Deceased's parent lived with the Deceased in the Granny flat from 20XX up until 20XX, when the Deceased's parent passed. The Beneficiary helped the Deceased care for their parent in the form of domestic duties, as required. The Deceased was diagnosed with a terminal illness from around 20XX. The Deceased was able to drive short distances and would often visit friends and would drive to appointments. Meanwhile, the Beneficiary also assisted with transport when the Deceased was unwell, such as when the Deceased was in pain. The Beneficiary also assisted the Deceased with grocery shopping, when required. On Date C, the Deceased was seriously injured and fractured their pelvis (the Injury Incident). The Deceased was admitted to the hospital as a result of the Injury Incident. After discharging from the hospital, the Deceased required the assistance of a walker and was no longer able to drive. From the point of the Injury Incident, until the Deceased died, the Beneficiary was the sole carer for the Deceased. The Beneficiary declared in a further statuary declaration that the Beneficiary provided the Deceased with: • financial support, including paying for telephone bills, internet and rates to the Property; • domestic support, including making breakfast, lunch and dinner every day and washing the dishes; • personal care and assistance, including ensuring the Deceased drinks sufficient fluid during the day, assisting with toileting throughout the day including nighttime on a regular basis, ensuring medication was taken at correct time, organising and taking them to various appointments, grocery shopping, out to lunch and visiting friends, cleaning for the house on weekends and laundry every second day. • emotional support, including looking after the pets/animals and pot plants. Bank statements were also provided from the Beneficiaries Bank and joint account held with the spouse that shows payments of the rates. No statements were provided for the Deceased. A reference letter from the Deceased's regular medical practitioner, provided: Between the Injury incident and the death, the Deceased required significant care from family, largely from the Beneficiary. This initially involved arranging and taking the Deceased to appointments and investigations, collecting medications and domestic assistance but, progressed to the Deceased needing the Beneficiary for help for all activities of daily living. Further documentation received included statutory declarations from family and friends of the Beneficiary and Deceased.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 302-60 | Income Tax Assessment Act 1997 section 302-145 | Income Tax Assessment Act 1997 section 302-195 | Income Tax Assessment Act 1997 subsection 302-195(1) | Income Tax Assessment Act 1997 paragraph 302-195(1)(a) | Income Tax Assessment Act 1997 paragraph 302-195(1)(b) | Income Tax Assessment Act 1997 paragraph 302-195(1)(d) | Income Tax Assessment Act 1997 section 995-1 | Income Tax Assessment Act 1997 subsection 995-1(1)

Reasons for decision: Summary: 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. 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 is no information that suggests the Beneficiary was financially dependent on the Deceased and therefore, paragraph 302-195(1)(d) of the ITAA 1997 is not applicable. To meet the definition of a death benefits dependant, the Beneficiary must have been in an interdependency relationship with the Deceased, in accordance with paragraph 302-195(1)(c) of the ITAA 1997. | Detailed Reasoning - Interdependency relationship: Under subsection 302-200(1) of the ITAA 1997, an interdependency relationship is defined as: Two persons (whether or not related by family) have an interdependency relationship under this 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. Subsection 302-200(2) of the ITAA 1997 states: In addition, 2 persons (whether or not related by family) also have an interdependency relationship under this section if: a) they have a close personal relationship; and b) they do not satisfy one or more of the requirements of an interdependency relationship mentioned in paragraphs (1)(b), (c) and (d); and c) the reason they do not satisfy those requirements is that either or both of them suffer from a physical, intellectual or psychiatric disability. To assist in determining whether two people have an interdependency relationship, paragraph 302-200(3)(a) of the ITAA 1997 provides that the regulations may specify the matters that are or are not to be taken into account. Subsection 302-200.01(2) of the Income Tax Assessment (1997 Act) Regulations 2021 (ITAR 2021) states the matters to be taken into account. These matters are all of the circumstances of the relationship between the persons, including (where relevant): a) the duration of the relationship b) the ownership, use and acquisition of property c) the degree of mutual commitment to a shared life d) the reputation and public aspects of the relationship e) the degree of emotional support f) the extent to which the relationship is one of mere convenience g) any evidence that the parties intend the relationship to be permanent; and h) the existence of a statutory declaration signed by one of the persons to the effect that the person is, or (in the case of a statutory declaration made after the end of the relationship) was in an interdependency relationship with the other person. Paragraph 302-200(3)(b) of the ITAA 1997 states that the regulations may specify the circumstances in which two people have, or do not have an interdependency relationship. Section 302-200.02 of the ITAR 2021 sets out the circumstances in which two people have an interdependency relationship. Subsection 302-200.02(2) of the ITAR 2021 provides that an interdependency relationship exists between two people where: a) they satisfy the requirements of paragraphs 302-200(1)(a) to (c) of the ITAA 1997; and b) one or both of them provides the other with support and care of a type and quality normally provided in a close personal relationship rather than by a mere friend or flatmate, for example one person provides significant care for the other person when they are unwell or suffering emotionally. Subsections 302-200.02(3) and (4) of the ITAR 2021 provide that an interdependency relationship also exists between two people where: a) they have a close personal relationship; and b) they do not satisfy one or more of the other requirements set out in subsection 302-200(1) of the ITAA 1997 because: i) they are temporarily living apart, for example because one of them is temporarily working overseas or in jail; or ii) one (or both) of them suffers from a disability. Subsection 302-200.02(5) of the ITAR 2021 states that two persons do not have an interdependency relationship if one of them provides domestic support and personal care to the other: a) under an employment contract or a contract for services; or b) on behalf of another person or organisation such as a government agency, a body corporate or a benevolent or charitable organisation. All of the conditions in subsection 302-200(1) of the ITAA 1997, or alternatively, subsection 302-200(2) of the ITAA 1997, or one of the tests in section 302-200.02 of the ITAR 2021 must be satisfied for a person to be in an interdependency relationship with another person. We deal with each condition in turn, to establish if an interdependency relationship existed. | Detailed Reasoning - Close personal relationship: The first requirement to be met is specified in paragraph 302-200(1)(a) of the ITAA 1997, which states that the two persons (whether or not related by family) must have a close personal relationship. This requirement is common to all of the tests specified in section 302-200 of the ITAA 1997 and section 302-200.02 of the ITAR 2021. A detailed explanation of subsection 302-200(1) of the ITAA 1997 is set out in the Supplementary Explanatory Memorandum (SEM) to the Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004 , which states: a) A close personal relationship will be one that involves a demonstrated and ongoing commitment to the emotional support and well-being of the two parties. b) Indicators of a close personal relationship may include: i) the duration of the relationship; ii) the degree of mutual commitment to a shared life; iii) the reputation and public aspects of the relationship (such as whether the relationship is publicly acknowledged). The above indicators are not an exclusive list and none of them are required for a close personal relationship to exist. People who share accommodation for convenience (such as flatmates) or people who provide care as part of an employment relationship or on behalf of a charity are not intended to fall within the definition of a close personal relationship The Explanatory Statement to the Income Tax Amendment Regulations 2005 (No. 7) stated that: Generally speaking, it is not expected that children will be in an interdependency relationship with their parents. While this statement does not preclude a child from being in an interdependency relationship with a parent, it suggests that interdependency only exists where the relationship goes beyond the usual relationship between an adult child and a parent. A close personal relationship as specified in subsection 302-200(1) of the ITAA 1997 would not normally exist between a parent and an adult child because there would not be a mutual commitment to a shared life between the two. In addition, the relationship between parents and their adult children would be expected to change significantly over time. It would be expected that the adult child would eventually move out and secure independence from their parents. However, where unusual and exceptional circumstances exist, a relationship between a parent and an adult child may be treated as an interdependency relationship for the purposes of subsection 302-200(1) of the ITAA 1997. The relationship between the Beneficiary and the Deceased was not over and above a normal family relationship between a parent and an adult child. The matters that indicate the Beneficiary and the Deceased did not have a close personal relationship before the Deceased's death are: a) The Beneficiary provided significant care and support to the Deceased throughout their illness, but there was an understanding that the Deceased wanted to remain in the granny flat. b) The Beneficiary and the Deceased held a close parent/child relationship and often helped each out, as would be reasonably expected in a family dynamic. c) Further details of their care arrangements are provided below, under Financial Support and Domestic Support and Care. The Beneficiary and the Deceased have not lived together since the year 20XX, as the Deceased remained independent enough to stay within their granny flat located on the Property that was purchased as tenants in common. The Deceased became significantly dependent on the Beneficiary for ongoing care and support, after the injury incident, for the remaining months of the Deceased's life. They did not have a strong mutual commitment to having a shared life above and beyond that of parent/child relationship, as the Deceased maintained their independence living separate from the Beneficiary, as not for the Injury Incident and cancer would have continued to visit friends, do domestic duties and cooking within their control. Therefore, a close personal relationship did not exist between the Beneficiary and the Deceased and the first requirement specified in paragraph 302-200(1)(a) of the ITAA 1997 has not been satisfied in this case. | Detailed Reasoning - Living together: The second requirement to be met is specified in paragraph 302-200(1)(b) of the ITAA 1997 and states that two interdependent persons (whether or not related by family) live together. The term 'live' is not defined in the ITAA 1997 or accompanying regulations. According to the Macquarie Dictionary, the term 'live' means to dwell or reside. The term 'reside' is defined as the action of dwelling in a particular place permanently or for a considerable time. In the context of paragraph 302-200(1)(b) of the ITAA 1997, the living arrangements must have some degree of permanency that is only disturbed by the death of one of the persons. Prior to the Deceased's death, the Beneficiary and the Deceased did not live together. The Deceased and Beneficiary resided on the Property that was purchased as tenants in common, and the Deceased resided in an independent granny flat, while the Beneficiary and partner resided within the main house. The granny flat was built to be independent from the main residence, with its own kitchen, bathroom, living quarters and bedrooms. At no time during this arrangement did the Deceased move into the main house. Consequently, the requirement specified in paragraph 302-200(1)(b) of the ITAA 1997 has not been satisfied in this case. | Detailed Reasoning - Financial support: The third requirement to be met is specified in paragraph 302-200(1)(c) of the ITAA 1997, which states that one or each of these two persons provides the other with financial support. Financial support under paragraph 302-200(1)(c) of the ITAA 1997 is satisfied if some level of financial support (not necessarily substantial) is being provided by one person (or each of them) to the other. It has been stated in the statutory declarations provided that the Beneficiary provided financial support in the form of paying for the Deceased phone and internet bills. Bank statements received show payment of rates to the Property were paid by the Beneficiary and the spouse. Therefore, the Beneficiary provided the Deceased with financial support during the final months of the Deceased's life. Consequently, paragraph 302-200(1)(c) of the ITAA 1997 has been satisfied. | Detailed Reasoning - Domestic support and personal care: The fourth requirement to be met is specified in paragraph 302-200(1)(d) of the ITAA 1997, which states that one or each of these two persons provides the other with domestic support and personal care. In discussing the meaning of domestic support and personal care, paragraph 2.16 of the SEM states: 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 services. Personal care services may commonly consist of assistance with mobility, personal hygiene and generally ensuring the physical and emotional comfort of a person. From the facts presented, the Beneficiary provided the Deceased with significant assistance with domestic duties, including cooking meals and washing. After the Injury Incident, the Beneficiary also helped with taking them to medical appointments, preparing meals, shopping and personal care, such as medication depensation, showering and dressing. In addition, the Beneficiary provided the Deceased with significant emotional support and comfort. Therefore, the requirement in paragraph 302-200(1)(d) of the ITAA 1997 has been satisfied. | Detailed Reasoning - Conclusion: As all of the requirements in section 302-200 of the ITAA 1997 have not been satisfied, the Deceased and Beneficiary were not in an interdependency relationship in the period just before the Deceased's death. As the Beneficiary was not in an interdependency relationship with the Deceased, the Beneficiary is not a death benefits dependant as defined under section 302-195 of the ITAA 1997 | Detailed Reasoning - Question 2: Are the superannuation lump sum death benefits received by the Beneficiary during the 20XX income year and 20XX income year excluded from their assessable income under section 302-60 of the ITAA 1997? | Detailed Reasoning - Reasons for decision: Division 302 of the ITAA 1997 sets out the taxation arrangements that apply to the payment of superannuation death benefits. Where a person receives a lump sum superannuation death benefit and that person was a dependant of the deceased, it is not assessable income and is not exempt income under section 302-60 of the ITAA 1997. Where a person receives a lump sum superannuation death benefit and that person was a non-dependant of the deceased, then the taxable component of the lump sum is assessable income under section 302-145 of the ITAA 1997. Accordingly, as the Beneficiary is not considered to be a death benefits dependant of the deceased, the superannuation death benefits are assessable and subject to taxation under section 302-145 of the ITAA 1997.