Hi @Horatio3000,
Superannuation of a temporary resident who dies before being granted permanent residency is not paid as a departing Australia superannuation payment (DASP). A DASP can only be claimed by the temporary resident themselves after they've left Australia and their visa has ceased to be in effect. Death benefits follow different rules to DASP.
When a super death benefit is paid, the tax treatment depends on who receives the benefit and their relationship to the deceased. The taxable component of a death benefit paid to a non-dependant for tax purposes is subject to tax. If the benefit is paid to the deceased estate and all beneficiaries are non-dependants, the estate is taxed on the benefit.
The tax rates for death benefits differ from the 35% DASP withholding rate. For death benefits, the taxed element is shown differently on trust tax returns, and if the estate is less than 3 years old, it benefits from concessional tax rates that are the same as individual tax rates rather than higher trust tax rates.
You'll need to contact the superannuation fund that holds the deceased's account to understand how the death benefit will be processed and what tax will apply based on the specific beneficiaries. The fund trustee is responsible for determining eligible beneficiaries and the appropriate tax treatment for the death benefit payment.
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