Private ruling: Superannuation death benefits
Date of advice: 1 November 2016
Published: February 2017
Ruling period: Income year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Was a person (the Beneficiary) in an interdependency relationship as defined in section 302-200 of the Income Tax Assessment Act 1997 (ITAA 1997) with a person who has died (the Deceased) at the time of the Deceased's death? | A1: No

Relevant facts and circumstances: At the time of their death, the Deceased was in receipt of the age pension from Centrelink and a monthly income from a retirement income plan. The Beneficiary is a child of the Deceased aged over 18 years. As a result of the Deceased's death, Fund A paid to the Beneficiary a superannuation lump sum benefit. Fund B paid to the Deceased's estate a superannuation lump sum benefit. Prior to their death, the Deceased suffered from numerous medical conditions as a result of which they required ongoing care. The Beneficiary cared for the Deceased for several years. The Beneficiary ceased paid employment to care for the Deceased. The Beneficiary did not live with the Deceased full-time however; they were at the Deceased's home all day and parts of most nights for the X years prior to the Deceased's death. The Beneficiary received a Centrelink carer's allowance for caring for the Deceased. The Deceased paid for their own household bills.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 302-200 | Income Tax Assessment Act 1997 Subsection 302-200(1). | Income Tax Assessment Act 1997 Subsection 302-200(2).

Reasons for decision: Summary: The Beneficiary and the Deceased did not have an interdependency relationship as defined in section 302-200 of the ITAA 1997 at the time of the Deceased's death. | Detailed Reasoning - Detailed reasoning: Section 302-200 of the ITAA 1997 defines 'interdependency relationships' for taxation purposes. Relevantly, subsection 302-200(1) of the ITAA 1997 provides that 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. On the facts, the Beneficiary's relationship with the Deceased does not satisfy the requirements of subsection 302-200(1) of the ITAA 1997. The Beneficiary and the Deceased did not live together, and neither party provided the other with financial support. However, in accordance with subsection 302-200(2) of the ITAA 1997, two persons may also have an interdependency relationship if they have a close personal relationship but cannot satisfy any of the other requirements of subsection 302-200(1) of the ITAA 1997 because either or both of them suffer from a physical, intellectual or psychiatric disability. In this case, it cannot be established that it is because of a physical, intellectual or psychiatric disability of the Beneficiary or the Deceased that the Beneficiary and the Deceased did not live together; or did not provide each other with financial support just before the Deceased died. As all the conditions in section 302-200 of the ITAA 1997 have not been satisfied, the Beneficiary and the Deceased did not have an interdependency relationship at the time of the Deceased's death.