Death Benefits from super

Tax treatment of a Beneficiary

If the beneficiary is a dependant for tax purposes the benefit received from the deceased super account is entirely tax free. A dependant for tax purposes is defined in the Income Tax Assessment Act 1997 (ITAA 97) to include:

  • Your spouse, including de-facto of the same or opposite sex or former spouse;
  • Your children (including step children), if under age 18 or age 18-25 and in full-time study;
  • A person in an interdependency relationship with you; or
  • A financial dependant 

If the beneficiary is a non-dependant for tax purposes (for example an adult child over age 18) then any tax free component is tax free, but the taxable component on any super death benefit received is taxed at 15% plus Medicare Levy, and any untaxed element is taxed at 30% plus Medicare Levy.