Edited Version of Private Advice

Authorisation Number:1052400113188

Date of Advice: 14 July 2025

Ruling

Subject: Superannuation death benefit - interdependency

Question 1:

Was the Beneficiary a death benefits dependant of the deceased person according to section 302-195 of the Income Tax Assessment Act 1997 (ITAA 1997), due to being in an interdependency relationship with the deceased under section 302-200 of the ITAA 1997?

Answer:

No.

This ruling applies for the followingperiods

30 June 20YY

30 June 20YY

The scheme commences on:

1 July 20YY

Relevant facts and circumstances:

1.  The Beneficiary is not the biological adult child of the Deceased person.

2.  The Deceased A was born on the X July 19XX and died on the XX May 20XX.

3.  The Deceased B was born on the XX July 19XX and died on the XX May 20XX.

4.  The Deceased A and B were married on the X July 19XX and died on the XX May 20XX.

5.  The Beneficiary was born on XXXX and was therefore older than 18 years when the Deceased died.

6.  You applied for a private ruling on XX March 20XX.

7. The Beneficiary provided the following documents in support of their application:

a)            Will of the Deceased A dated, XXXX, appointing the Beneficiary as the Executor and trustee of the will.

b)            Will of the Deceased B dated, XXXX, appointing the Beneficiary as the Executor and trustee of the will.

c)            Death Certificate for the Deceased A showing the date of death as XX May 20XX.

d)            Death Certificate for the Deceased B showing the date of death as XX May 20XX.

e)            Executed power of Attorney for Deceased A, dated XXXX, appointing the Beneficiary as the power of attorney for the Deceased A in the event of Deceased B's death.

f)            Executed power of Attorney for Deceased B, dated XXXX, appointing the Beneficiary as the power of attorney for the Deceased B in the event of Deceased A's death.

g)            Advanced care Directive for Deceased A appointing the Beneficiary as the caretaker in the event of Deceased B's death.

h)            Advanced care Directive for Deceased B appointing the Beneficiary as the caretaker in the event of Deceased A's death.

i)            A copy of the certificate of tile for the residence shared by the Beneficiary's family and the Deceased A and B. The title shows that the property was sold by the Deceased A and B to the Beneficiary and their spouse. Last sale date: XXXX.

j)            Certified copies of bank statements of the Beneficiary and their spouses joint account (20XX-20XX).

k)            Marriage certificate for Deceased A and B, dated the X July 19XX.

l)            Xxx exit statement for the Deceased B to the Beneficiary and their spouse paying each an amount of $000.00 dated: 20XX.

m)            Electricity bill in the name of the Deceased A, issue date: XXXX for an amount of $000.00 paid from the joint account of the Beneficiary in full on the XXXX.

n)            Electricity bill in the name of the Deceased A, issue date: XXXX for an amount of $000.00 paid from the joint account of the Beneficiary in full on the XXXX.

o)            Electricity bill in the name of the Deceased A, issue date: XXXX for an amount of $000.00 paid from the joint account of the Beneficiary in full on the XXXX.

p)            Electricity bill in the name of the Deceased A, issue date: XXXX for an amount of $000.00, paid from the joint account of the Beneficiary in full on the XXXX.

q)            Electricity bill in the name of the Deceased A, issue date XXXX, for an amount of $000.00, paid from the joint account of the Beneficiary in full on the XXXX.

r)            Xx water bill in the name of the Deceased A and B, paid from the joint account of the Beneficiary on the XXXX for an amount of $000.00.

s)            Xx water bill in the name of the Deceased A and B, paid from the joint account of the Beneficiary on the XXXX for an amount of $000.00.

t)            Invoice in the name of the Deceased B for an amount of $0000.00 for a purchase of a mattress on XXXX, paid from the joint account of the Beneficiary in full on the XXXX.

u)            Broadband internet bill dated from October XXXX to May XXXX, in the name of the Deceased B for an amount of $00.00, paid from the joint account of the Beneficiary each month respectively.

v)            Invoices has been provided in Deceased B's name with a total amount of $0000.00 paid on the XXXX and $0000.00 paid on the XXXX from the Beneficiary's joint account to xxx dealer for purchase of the Deceased B's car.

w)           Xxx regional council rate notice dated XXXX in the name of the Deceased A and B, paid from the joint account of the Beneficiary on the XXXX for an amount of $0000.00 of the property shared by both parties.

x)            Electricity bill in the name of the Deceased A, issue date: XXXX for an amount of $0000.00 paid from the joint account of the Beneficiary in full on the XXXX.

y)            Transfer of Xxxx payment to the estate of the Deceased A and B for an amount of $ 0000.00. Date of payment: XXXX, taxed $000,000.00 untaxed $00,000.00 tax free component: $00,000.00.

z)            Benefit from Xxx pension account paid to Estate of the Deceased A and B on the 20/09/20YY for an amount of $000,000.00. taxed element: $000,000.00 and tax-free component: $00,000.00.

aa)         Statement of asset and liabilities from the Xxx Court of XXX, Dated: XXXX.

bb)         Deposit paid for an amount of $000.00 on the XXXX from the joint account of the Beneficiary, for a quote in the name of the Deceased B for a new triple lock and blind for alfresco in the property shared by both the parties.

8.  Additional supporting documentation received via email on the XXXX in support of the statements made by the Beneficiary regarding their family moving in permanently with the Deceased A and B at their property, XXXX.

cc)         Home and contents insurance policy in the name of the Beneficiary dating from XXXX to XXXX for the property at the address: XXXX.

dd)         Tax invoice in the name of the Beneficiary for new security doors in the property XXXX, dated XXXX.

ee)         Tax Invoice in the name of the Beneficiary, dated: XXXX for the installation of TV wall bracket and new TV points in the property, XXXX.

ff)         Tax invoice in the name of the Beneficiary, dated XXXX for the purchase of new lounge furniture delivered to the property at XXXX.

gg)         Tax invoice in the name of the Beneficiary dated XXXX for the installation of a new barbeque in the property at XXXX.

hh)         Email from Xxx Australian government confirming the change of address to XXXX, dated XXXX for the xxx Licence in the name of the Beneficiary.

9.  Additional supporting documentation received via email on the XXXX in support of the statements made by the Beneficiary regarding the relationship between the Beneficiary and the Deceased A and B.

ii)             Photos of shared residence depicting their living arrangements.

jj)             Photographs from social media showing the relationship duration and shared family events over time.

kk)          An email from the Beneficiary's children's school confirming the Deceased was listed as an emergency contact in the application form.

10.  The following statements have been made by the Beneficiary in their application:

a)            The Beneficiary stated that they and the Deceased A first met in 19XX at workplace while working full time where they became close friends.

b)            The Beneficiary stated that in XXXX, the Deceased A and B met the Beneficiary and their spouse at a workplace party.

c)            The Beneficiary stated that they and their spouse lived approximately 5km away from deceased A and B and spent and increasing amount of time socialising weekly with friends and family.

d)            The Beneficiary stated that between XXXX and XXXX, the Beneficiary's spouse and the Deceased B bought a farm together with 160 acres as business partners. No evidence has been provided to support this statement.

e)            The Beneficiary stated that in XXXX, when the Beneficiary got married to their spouse, the Deceased A and B were viewed by locals as parental figures to the Beneficiary and their spouse.

f)            The Beneficiary stated that in XXXX, when the Beneficiary's child named xxx was born, the Deceased A and B announced their birth as that of their own grandchild.

g)            The Beneficiary stated that between XXXX and XXXX, the Deceased A and B bought a farm in xxx, xx. The couple helped each other settle in while working part time. Also, when the Beneficiary built a house in XXXX, the Deceased A and B helped them with the house build and farm work. The Beneficiary stated that the families maintained close weekly contact.

h)            The Beneficiary stated that in XXXX, the Beneficiary's family moved to xxx, XXXX, away from the Deceased's farm. They advised that their bond strengthened with Deceased A and B during this time.

i)            The Beneficiary stated that in XXXX, when the Beneficiary's child xxx was born, the Deceased A and B were included in all social events, helped take care of the 2 children and organised play dates.

j)            The Beneficiary stated that the Deceased A gave xxx lessons to their elder child and spent time with their younger child teaching them skills like xxx and xxx.

k)            The Beneficiary stated that in XXXX, the Deceased A's health declined, and this limited their social contact outside of the Beneficiary's family. The Beneficiary said they accompanied the Deceased A along with Deceased B to their medical appointments and became their main support during this time.

l)            The Beneficiary stated that in XXXX, the Beneficiary and their spouse were appointed as the enduring powers of attorney for both the Deceased A and B. Executed copies of power of attorney were provided for both Deceased A and B to this effect.

m)            The Beneficiary stated that they began planning to move in with the Deceased A and B at the farm at. They upgraded the facility and established shared living arrangements with a granny flat connected to the main house by the means of a shared, covered porch.

n)            The Beneficiary stated that in March XXXX, the Beneficiary's family sold their XXXX home and moved into the house at the farm and lived together with the Deceased A and B making a commitment to shared life and intended to live together permanently. No evidence was provided regarding the sale of this property as mentioned.

o)            The Beneficiary stated that the Beneficiary and their spouse along with Deceased A and B shared all the domestic tasks of running the combined households, including caring for the Beneficiary's children and running the farm.

p)            The Beneficiary stated that in February XXXX, the Beneficiary took overpaying several of the Deceased's bills. Copies of bank statements from the Beneficiary's joint account have been provided which show payments were made from this account which can be matched to invoices provided which were in the name of the deceased, such as council rates, broadband, electricity and water.

Relevant legislative provisions:

Income Tax Assessment Act 1997 Section 302-60

Income Tax Assessment Act 1997 Section 302-195

Income Tax Assessment Act 1997 Section 302-200

Income Tax Assessment (1997 Act) Regulations 2021 Section 302-200.01

Income Tax Assessment (1997 Act) Regulations 2021 Section 302-200.02

Reasons for decision: Meaning of death benefits dependant

11.  Subsection 995-1(1) of the ITAA 1997 states that the term 'death benefits dependant' has the meaning given by section 302-195 of the ITAA 1997. Subsection 302-195(1) of the ITAA 1997 defines a death benefits dependant as follows:

A death benefits dependant, of a person who has died, is

a.            the Deceased person's spouse or former spouse; or

b.            the Deceased person's child, aged less than 18; or

c.            any other person with whom the Deceased person had an interdependency relationship under section 302-200 just before he or she died; or

d.            any other person who was a dependant of the Deceased person just before he or she died.

12.  As the Beneficiary is not a biological adult child of the Deceased A and B, paragraphs 302-195(1)(a) and (b) of the ITAA 1997 are not applicable.

13.  The definition of death benefits dependant does not stipulate the nature or degree of dependency required to be a dependant of the Deceased person in paragraph 302-195(1)(d) of the ITAA 1997. However, it is generally accepted that this paragraph refers to financial dependence.

14.  The Beneficiary was not financially dependent on the Deceased person and therefore, paragraph 302-195(1)(d) of the ITAA 1997 is not applicable.

11.  To meet the definition of a death benefits dependant, the Beneficiary must have been in an interdependency relationship with the Deceased A and B, in accordance with paragraph 302-195(1)(c) of the ITAA 1997.

Interdependency relationship

15.  Under subsection 302-200(1) of the ITAA 1997, an interdependency relationship is defined as:

Two persons (whether or not related by family) have an interdependency relationship under this section if:

a.            they have a close personal relationship; and

b.            they live together; and

c.            one or each of them provides the other with financial support; and

d.            one or each of them provides the other with domestic support and personal care.

16.  Subsection 302-200(2) of the ITAA 1997 states:

In addition, 2 persons (whether or not related by family) also have an interdependency relationship under this section if:

a.            they have a close personal relationship; and

b.            they do not satisfy one or more of the requirements of an interdependency relationship mentioned in paragraphs (1)(b), (c) and (d); and

c.            the reason they do not satisfy those requirements is that either or both of them suffer from a physical, intellectual or psychiatric disability.

17.  To assist in determining whether two people have an interdependency relationship, paragraph 302-200(3)(a) of the ITAA 1997 provides that the regulations may specify the matters that are or are not to be taken into account.

18.  Subsection 302-200.01(2) of the Income Tax Assessment (1997 Act) Regulations 2021 (ITAR 2021) states the matters to be taken into account. These matters are all of the circumstances of the relationship between the persons, including (where relevant):

a.            the duration of the relationship

b.            the ownership, use and acquisition of property

c.            the degree of mutual commitment to a shared life

d.            the care and support of children

e.            the reputation and public aspects of the relationship

f.            the degree of emotional support

g.            any evidence that the parties intend the relationship to be permanent

19.  Subsection 302-200.02(2) of the ITAR 2021 provides that an interdependency relationship exists between two people where:

a.            they satisfy the requirements of paragraphs 302-200(1)(a) to (c) of the ITAA 1997; and

b.            one or both of them provides the other with support and care of a type and quality normally provided in a close personal relationship rather than by a mere friend or flatmate, for example one person provides significant care for the other person when they are unwell or suffering emotionally.

20.  All of the conditions in subsection 302-200(1) of the ITAA 1997, or alternatively, subsection 302-200(2) of the ITAA 1997, or one of the tests in section 302-200.02 of the ITAR 2021 must be satisfied for a person to be in an interdependency relationship with another person. We deal with each condition in turn, to establish if an interdependency relationship existed.

Close personal relationship

21.  The first requirement to be met is specified in paragraph 302-200(1)(a) of the ITAA 1997, which states that the two persons (whether or not related by family) must have a close personal relationship.

22.  This requirement is common to all of the tests specified in section 302-200 of the ITAA 1997 and section 302-200.02 of the ITAR 2021.

23.  A detailed explanation of subsection 302-200(1) of the ITAA 1997 is set out in the Supplementary Explanatory Memorandum (SEM) to the Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004, which states:

a.            A close personal relationship will be one that involves a demonstrated and ongoing commitment to the emotional support and well-being of the two parties.

b.            Indicators of a close personal relationship may include:

i)          the duration of the relationship.

ii)          the degree of mutual commitment to a shared life.

iii)          the reputation and public aspects of the relationship (such as whether the relationship is publicly acknowledged).

24.  The above indicators are not an exclusive list and none of them are required for a close personal relationship to exist.

25.  People who share accommodation for convenience (such as flatmates) or people who provide care as part of an employment relationship or on behalf of a charity are not intended to fall within the definition of a close personal relationship

26.  There was no evidence provided to substantiate a close personal relationship existed between the Beneficiary and Deceased A and B prior to their death. All information provided in the application suggesting a close personal relationship were only statements without support evidence therefore, the facts cannot be established based on statements.

27.  Therefore, a close personal relationship did not exist between the Beneficiary and the Deceased A and B and the first requirement specified in paragraph 302-200(1)(a) of the ITAA 1997 has not been satisfied in this case.

Living together

28.  The second requirement to be met is specified in paragraph 302-200(1)(b) of the ITAA 1997 and states that two interdependent persons (whether or not related by family) live together.

29.  The term 'live' is not defined in the ITAA 1997 or accompanying regulations. According to the Macquarie Dictionary, the term 'live' means to dwell or reside. The term 'reside' is defined as the action of dwelling in a particular place permanently or for a considerable time. In the context of paragraph 302-200(1)(b) of the ITAA 1997, the living arrangements must have some degree of permanency that is only disturbed by the death of one of the persons.

30.  Prior to the Deceased A and B's death, the Beneficiary and their family lived together with Deceased A and B at the address: xxxx, from February 20XX to XX May 20XX (up until the death of death).

31.  The Deceased A and B upgraded the facility and established shared living arrangements with a granny flat connected to the main house by the means of shared, covered porch for establishing a permanent living arrangement for the Beneficiary's family from February 20XX to XX May 20XX (up until the death of death).

32.  Consequently, the requirement specified in paragraph 302-200(1)(b) of the ITAA 1997 has been satisfied in this case.

Financial support

33.  The third requirement to be met is specified in paragraph 302-200(1)(c) of the ITAA 1997, which states that one or each of these two persons provides the other with financial support.

34.  Financial support under paragraph 302-200(1)(c) of the ITAA 1997 is satisfied if some level of financial support (not necessarily substantial) is being provided by one person (or each of them) to the other.

35.  The provided evidence supports that the Beneficiary and Deceased A and B provided each other with financial support as the Beneficiary was paying various household costs, including electricity, gas, insurances, expenses, council rates from their joint account with their spouse wherein, the Deceased A and B shared their accommodation rent free with the Beneficiary and their family.

36.  In 20xx, The Deceased A and B updated their power of attorney, land title, care directives, naming the Beneficiary and their spouse (and their children) as their chosen family

37.  Therefore, the Beneficiary and Deceased A and B provided each other with financial support during their shared lives.

38.  Consequently, paragraph 302-200(1)(c) of the ITAA 1997 has been satisfied.

Domestic support and personal care

39.  The fourth requirement to be met is specified in paragraph 302-200(1)(d) of the ITAA 1997, which states that one or each of these two persons provides the other with domestic support and personal care. In discussing the meaning of domestic support and personal care, paragraph 2.16 of the SEM states:

a.            Domestic support and personal care will commonly be of a frequent and ongoing nature. For example, domestic support services will consist of attending to the household shopping, cleaning, laundry, and like services. Personal care services may commonly consist of assistance with mobility, personal hygiene and generally ensuring the physical and emotional comfort of a person.

40.  Even though you state, the Deceased treated the Beneficiary's children as if they were their natural grandparents and helped take care of the 2 children and organise play dates. The Deceased A gave xx lessons to elder child and spent significant time with the younger child teaching them skills like xx and xx. There is no evidence to support these statements.

41.  Additionally, you have stated that the Beneficiary and Deceased A and B shared all the domestic tasks of running the combined households, and in 20YY, the Deceased A's health declined and limited their social contact except for the Beneficiary's family. These statements are not supported by evidence.

42.  However, the above are all statements and no evidence has been provided to support this therefore, the requirement in paragraph 302-200(1)(d) of the ITAA 1997 has not been satisfied

Conclusion

43.  As all of the requirements in section 302-200 of the ITAA 1997 have not been satisfied, the Deceased A and B and Beneficiary were not in an interdependency relationship in the period just before the Deceased A and B's death.

44.  As the Beneficiary was not in an interdependency relationship with the Deceased A and B, the Beneficiary is not a death benefits dependant as defined under section 302-195 of the ITAA 1997.