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Amending a superannuation death benefit payment

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Newbie

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I received a superannuation death benefit a couple of years ago. However after receiving advice I understand that this death benefit should have been concessionally taxed as I was financially dependent of the deceased.
The superannuation fund who made this Payment re saying that I need to take this up with the ATO. However I believe this should be fixed by them.

Could you please give me some guidance and possibly outline briefly as to how this should be solved by the superannuation fund?
Can this be amended by them or do I need to take this up with the ATO direct?


Thank you
1 ACCEPTED SOLUTION

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Best answer

Devotee Registered Tax Practitioner

Replies 0

I agree with the super fund. 

 

They have paid the benefit on their understanding at the time, so they responsibility is finished  -  unless you want to dispute the amount of the benefit paid.

 

You need to lodge an objection against the assessment of the income tax return that included the death benefit.

You would need to provide evidence that you were a financial dependent.

There are a number of precedent court cases about what constituses financial dependecy, so you should get proper advice first.

You may be outside the objection period, but you can apply for commissioner's discretion to treat the objection as witn time.

 

 

From ATO:

Dependants

The definition of a dependant is slightly different for:

  • who you can pay a death benefit to (superannuation law)
  • how the death benefit will be taxed (taxation law).

Under superannuation law, a death benefit dependant includes:

  • the deceased's spouse or de facto spouse
  • a child of the deceased (any age)
  • a person in an interdependency relationship with the deceased  
    • this is a close personal relationship between two people who live together, where one or both provides for the financial, domestic and personal support of the other.

Under taxation law, a death benefit dependant includes:

  • the deceased's spouse or de facto spouse
  • the deceased's former spouse or de facto spouse
  • a child of the deceased under 18 years old
  • a person financially dependent on the deceased
  • a person in an interdependency relationship with the deceased.

Under taxation law, a person is included in the definition of a death benefit dependant if they receive a super lump sum because the deceased died in the line of duty. This will be as a member of the defence force, the Australian Federal Police or the police force of a state or territory, or as a protective service officer.

1 REPLY 1
Highlighted

Best answer

Devotee Registered Tax Practitioner

Replies 0

I agree with the super fund. 

 

They have paid the benefit on their understanding at the time, so they responsibility is finished  -  unless you want to dispute the amount of the benefit paid.

 

You need to lodge an objection against the assessment of the income tax return that included the death benefit.

You would need to provide evidence that you were a financial dependent.

There are a number of precedent court cases about what constituses financial dependecy, so you should get proper advice first.

You may be outside the objection period, but you can apply for commissioner's discretion to treat the objection as witn time.

 

 

From ATO:

Dependants

The definition of a dependant is slightly different for:

  • who you can pay a death benefit to (superannuation law)
  • how the death benefit will be taxed (taxation law).

Under superannuation law, a death benefit dependant includes:

  • the deceased's spouse or de facto spouse
  • a child of the deceased (any age)
  • a person in an interdependency relationship with the deceased  
    • this is a close personal relationship between two people who live together, where one or both provides for the financial, domestic and personal support of the other.

Under taxation law, a death benefit dependant includes:

  • the deceased's spouse or de facto spouse
  • the deceased's former spouse or de facto spouse
  • a child of the deceased under 18 years old
  • a person financially dependent on the deceased
  • a person in an interdependency relationship with the deceased.

Under taxation law, a person is included in the definition of a death benefit dependant if they receive a super lump sum because the deceased died in the line of duty. This will be as a member of the defence force, the Australian Federal Police or the police force of a state or territory, or as a protective service officer.