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  • Glossary

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    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    Death benefits dependant

    You are a death benefits dependant of the deceased if, at the time they died, you were:

    • the surviving spouse
    • a former spouse
    • a child of the deceased and you were under 18 years old
    • any other person who was financially dependent on the deceased, or
    • any other person in an interdependency relationship with the deceased.

    For this section, you are also a death benefits dependant when you receive a superannuation lump sum payment because a member of the Australian Defence Force or of an Australian police force, including the Australian Protective Service, died in the line of duty.

    If you disagree with the dependency status shown on your payment summary, you should discuss it with the payer.

    For the purposes of the definition of death benefits dependant the following apply:

    Spouse of the deceased includes another person (of any sex):

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

    Child of the deceased includes:

    • an adopted child, stepchild or 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 a person under a state or territory court order giving effect to a surrogacy agreement).

    Interdependency relationship

    An interdependency relationship exists if there is a close personal relationship between two persons and both the following conditions are met:

    • they live together
    • one or each of them provides the other with financial support, domestic support and personal care.

    An interdependency relationship can also exist if there is a close personal relationship between two persons but one or more of the conditions stated above are not satisfied because of the physical, intellectual or psychiatric disability of one of the people.

    However, two persons do not have an interdependency relationship if one of them provides domestic support and personal care to the other:

    • under an employment contract or a contract for service, or
    • on behalf of another person or organisation such as a government agency, a body corporate or a benevolent or charitable organisation.

    Low-rate cap amount for taxable components of superannuation lump sum payments

    This concession applies only to superannuation lump sums paid to you when you have reached your preservation age but before you turn 60 years old.

    The low-rate cap amount is the maximum amount of taxable components (taxed and untaxed elements) that can be taxed at a concessional lower rate.

    For 2018–19, the low-rate cap amount is a maximum of $205,000, but it could be less for you if before July 2018 you received any superannuation lump sums that counted towards your entitlement to a superannuation lump sum tax offset. The amount is indexed to average weekly ordinary time earnings and rounded down to the nearest multiple of $5,000. See Key superannuation rates and thresholds.

    The low-rate cap amount is a 'lifetime' limit. This means that the taxed element and untaxed elements of all superannuation lump sum payments that you receive (as well as the amount of any eligible termination payments for which you became entitled to a rebate before 1 July 2007) when you have reached your preservation age but before you turn 60 years old will be taxed at a concessional rate until your total reaches the low-rate cap amount ($205,000 plus future indexed increases). Payments you receive in excess of the low-rate cap amount will be taxed at the tax rate shown in Table 2.

    Consequently, for 2018–19 the maximum amount for which you can be taxed at a concessional rate is $205,000 less any amounts to which the concessional tax rate has previously been applied.

    For more information on how we work out your low-rate cap amount, see How tax applies to your super.

    Terminal medical condition

    For income tax purposes, you have a terminal medical condition if both the following circumstances are met:

    • two registered medical practitioners (with at least one being a specialist practising in the area related to the illness or injury) have certified that you suffer an illness or have incurred an injury that is likely to result in your death within a 24 month period, starting from the date of certification
    • each of the certificates is less than 24 months old.

    Superannuation lump sum payments paid to you are tax free if you have a terminal medical condition at the time you received the payment or within 90 days of receiving payment. You should not have received a PAYG payment summary for these payments.

    If you received such a payment and tax was withheld, you can get a refund of the tax.

    For information about how to get the refund and for further information about these payments, see Early access to your super.

    Transfer balance cap

    There is a cap on the total amount of superannuation that can be transferred into a superannuation income stream (such as a pension or annuity).

    The transfer balance cap for 2018–19 is $1.6 million (this may be reduced in certain circumstances).

    Untaxed-plan cap amount for untaxed elements

    The untaxed-plan cap amount is the maximum amount of the untaxed elements of your superannuation lump sum payments which will be subject to concessional tax rates.

    For 2018–19, the untaxed-plan cap amount is a maximum of $1.480 million, but it could be less for you if you have previously received another superannuation lump sum with an untaxed element from the same superannuation fund. The amount is indexed to average weekly ordinary time earnings and rounded down to the nearest multiple of $5,000. See Key superannuation rates and thresholds.

    There is a separate untaxed-plan cap amount for each superannuation fund you have. This means that, for each fund, the untaxed elements which make up your superannuation payments will be taxed at a concessional rate until these untaxed elements reach the untaxed-plan cap amount ($1.480 million plus future indexed increases). Amounts above this limit are taxed at the top marginal rate.

    If you roll over an amount from one superannuation fund to another, any untaxed element that is part of that amount will count towards the untaxed-plan cap amount for the fund from which the amount was rolled over.

      Last modified: 26 Jun 2019QC 59114