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The PBR (1052509195315) highlighted the stringent conditions that are placed on the definition of a close personal relationship.
The ruling involved the beneficiary who was a parent of the deceased. Upon their death, the trustee of the deceased estate received a death benefit payment from the deceased’s superannuation fund, and no tax was withheld from this payment.
The beneficiary applied for a private ruling on whether they were a death benefits dependant of the deceased, due to being in an interdependency relationship with him prior to his death.
The facts presented to the hearing showed that the deceased was in receipt of Centrelink Carer Payment and/or Carer Allowance Medical Report (SA332a), after the deceased was diagnosed with an illness which immobilised him and made him dependent on daily physical care for all personal needs before he died.
The beneficiary had moved into the deceased’s home to care for him and lived at the deceased’s home until his passing and continued to live there until it was sold.
Prior to his passing the deceased had received an income protection insurance payout and a TPD insurance payout. The beneficiary paid for food and some household bills prior to the deceased’s insurance payments and continued to pay for all food while the deceased paid all household bills.
The deceased provided free accommodation to the beneficiary who did all of the housework, provided most of the daily physical care required by the deceased as well as the two providing emotional support to each other.
The ruling stated that 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.
It stated that the beneficiary was not financially dependent on the deceased person and therefore, paragraph 302-195(1)(d) of the ITAA 1997 is not applicable and to meet the definition of a death benefits dependant, the beneficiary must have been in an interdependency relationship with the deceased, in accordance with paragraph 302-195(1)(c) of the ITAA 1997.
The first test of interdependency to be met is a close personal relationship and the ruling stated that where unusual and exceptional circumstances exist, a relationship between a parent and an adult child may be treated as an interdependency relationship for the purposes of subsection 302-200(1) of the ITAA 1997.
However, it continued that while it is accepted that the beneficiary had a close relationship with the deceased, the relationship was not over and above a normal family relationship between a parent and an adult child.
“The fact the beneficiary and the deceased lived together for a period of time and were living together at the time of the deceased’s passing, and that the beneficiary provided daily personal care to the deceased does not mean that they had a mutual commitment to a shared life,” the ruling stated.
“In this case, the beneficiary moved into the deceased’s home in order to provide personal care for him. The evidence does not show that the beneficiary and the deceased shared a ‘close personal relationship’.
“As a close personal relationship did not exist between the beneficiary and the deceased, the first requirement specified in paragraph 302-200(1)(a) of the ITAA 1997 has not been satisfied in this case.”
In regard to the condition of financial support, the ruling stated that bank statements provided for the deceased show he made mortgage payments, and paid household expenses such as rates, power, internet and utilities (water) as well as several cash transfers to the beneficiary.
However, it stated that it is not considered that the deceased or the beneficiary were financially dependent on the other as they both had sufficient income from pensions to support themselves.
“However, the test here is one of financial support, not dependency. It is considered that the beneficiary and the deceased provided each other with a level of financial support during the period in which they lived together: the deceased paid for the majority of household expenses, and the beneficiary contributed towards expenses by paying for groceries. Consequently, paragraph 302-200(1)(c) of the ITAA 1997 has been satisfied,” it added.
“As all of the requirements in section 302-200 of the ITAA 1997 have not been satisfied, the deceased and beneficiary were not in an interdependency relationship in the period just before the deceased’s death. As the beneficiary was not in an interdependency relationship with the deceased, the beneficiary is not a death benefits dependant as defined under section 302-195 of the ITAA 1997.”
Keeli Cambourne
April 23, 2026
smsfadviser.com
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