A married couple will remain spouses of each other until death or until they are divorced. A couple who are separated, but not yet divorced, will remain “spouses” of one another. Clearly under this definition a person could have more than one spouse at the time of death.
A child includes a biological child, an adopted child or stepchild and, since July 2008, has also included children of the deceased’s spouse as well as children born through artificial conception and surrogacy arrangements.
An interdependency relationship exists when two people have a close personal relationship, live together, one or each of them provides the other with financial support, and one or each of them provides the other with domestic support and personal care. A concession is available for any or all of these requirements if a couple are separated due to physical, intellectual or psychiatric disability.
Parents often argue that they qualify under the interdependency rule immediately after their adult child dies. The super laws demand that some other matters be taken into account before an interdependency relationship is said to exist, including the existence of a sexual relationship and the degree of mutual commitment to a shared life.
However, the Superannuation Complaints Tribunal has ruled in a number of cases involving parents and their deceased children that an interdependency relationship was deemed to exist.
In 1999 the Administrative Appeals Tribunal found that a widowed mother was dependent on her deceased son because he contributed to her living expenses. This case involved the ability to get tax concessions on super death benefits.
Just because someone is a dependant of a deceased does not mean they are eligible to receive tax concessions on those payments. Such concessions are only available to spouses and minor children. If an adult child has certain disabilities, then they may also be permitted to take a death benefit as a pension. All other death benefit recipients, including adult children, cannot take a death benefit as a pension.
A recent draft Tax Ruling issued by the Australian Tax Office has raised the potential for some lump sum death benefits paid out of a deceased member’s pension to face additional tax. The Tax Office argues that their view applies from July 2007. This controversial ruling is already creating waves.
Tony Negline is general manager, corporate strategy, at SUPERCentral – www. supercentral.com.au.
