taxation on superannuation death benefits

 Author: DamienATO(Community Support)Community Support

18 Nov 2025

Hi @Paul1961,

Very sorry for your loss.

The tax you pay on the super death benefit depends on your relationship to your son under tax law. As his parent, you're likely considered a non-dependant since he was 31 and presumably financially independent.

For non-dependants receiving lump sum super death benefits:

• the tax-free component ($0 in your case) isn't taxed
• the taxed element of the taxable component is taxed at a maximum rate of 15%
• the untaxed element is taxed at a maximum rate of 30%.

Based on your payment summary showing $62,500 taxed element and $174,500 untaxed element, you'll need to include this $241,000 in your tax return. You can claim tax offsets to ensure you don't pay more than the maximum rates mentioned above.

Regarding the HECS debt, when someone dies and a final tax return shows they earned over the compulsory repayment threshold, a compulsory repayment must be made. After this, the remaining debt is cancelled.

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