G Death benefit increase



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Show at G the amount the fund is entitled to deduct (under section 295-485 of the ITAA 1997) because the fund increased (or did not reduce) amounts paid as superannuation lump sum death benefits.

The fund can deduct an amount if the fund:

  • has been complying since 1 July 1988 or, if established at a later date, since that later date
  • paid a superannuation lump sum death benefit in 2014–15 to the trustee of the deceased’s estate or to the deceased’s dependants (that is, an individual who was a spouse, former spouse or child of the deceased) at the time of death or payment, and
  • increased (or did not reduce) a superannuation lump sum death benefit by an amount (the tax saving amount) so that the superannuation lump sum death benefit amount is the amount the fund could have paid if no tax were payable on contributions.

The amount of the deduction is calculated by dividing the tax saving amount by the low tax component rate (which is generally 15%). If the payment is made to the trustee of the deceased’s estate, the deduction is only available to the extent that the spouse, former spouse or child of the deceased can reasonably be expected to benefit from the estate. For more information see ATO Interpretive Decision ATO ID 2012/10External Link Income Tax: anti detriment payments paid by a complying superannuation fund to a trustee of a deceased estate.

The following definitions of ‘spouse’ and ‘child’ apply for the purpose of determining the deduction for the increased amount of superannuation lump sum death benefits.

Spouse of the deceased includes a person (of any sex) who:

  • the deceased was in a relationship with, that was registered under a prescribed state or territory law, or
  • although not legally married to the deceased, lived with the deceased on a genuine domestic basis in a relationship as a couple.

Child of the deceased includes:

  • an adopted child, a stepchild or an ex-nuptial child of the deceased
  • a child of the deceased’s spouse
  • someone who is a child of the deceased within the meaning of the Family Law Act 1975 (for example, a child who is considered to be a child of the person under a state or territory court order giving effect to a surrogacy arrangement).
Last modified: 21 Aug 2015QC 44343