Understanding a death benefit paid from a super fund

A death benefit from a super fund is a payment you receive because of the death of another person who was a member of that fund.

A death benefit is typically paid from a: super fund retirement savings account provider approved deposit fund, or super annuity provider.

How is a death benefit payment taxed?

The tax on a death benefit depends on whether:

• you were a dependant of the deceased
• the amount is paid as a lump sum or super income stream, or
• if it was paid from an untaxed fund.

The death benefit may be made up of a:

• taxable component, and
• tax-free component.

Part of the taxable component will be made up of amounts that have been taxed in the super fund, known as the taxed element. The other part of the taxable component are amounts that have not been taxed in the fund, known as the untaxed element.

You may have an untaxed element if the:

• benefit comes from an untaxed super fund, or
• fund pays the proceeds of a life insurance policy.

The super fund will advise you if the death benefit has an untaxed element.

Sections within How is a death benefit payment taxed?

• Are you a dependant of the deceased?
• What is an interdependency relationship?
• How will the death benefit payment be taxed if you are a dependant of the deceased?
• How will the death benefit payment be taxed if you are not a dependant of the deceased?