The private binding ruling (1052401820160) dealt with the parent beneficiary of an adult child who moved into a retirement village with the beneficiary in the last years of their life due to illness.
The facts presented to the tribunal state that in 2021, the deceased moved into the beneficiary’s unit located in a retirement village, and both then cared for and supported the deceased’s sibling.
The deceased also assisted their sibling to find a place to live as they were no longer able to care for themself. The deceased lived rent-free with the beneficiary and was not required to contribute financially to the living costs.
The tribunal was provided with documentation, by way of bank statements, showing the deceased made frequent purchases of groceries and at pharmacies in the months prior to their death.
From the facts presented, the deceased had sufficient income from external sources to support themselves financially and was not financially dependent on the beneficiary to pay for their expenses and provide them with accommodation, meals and cash for living expenses.
It was also stated that in terms of domestic support, the deceased took the beneficiary to medical appointments. Furthermore, the deceased carried out all domestic duties for the home and spent approximately 10 hours per week assisting the beneficiary.
The tribunal ruled that the beneficiary was not a death benefits dependant on the deceased because all requirements necessary to prove that relationship were not met.
Although the tribunal stated that the deceased provided the beneficiary with financial support during the final months of the deceased’s life, and the condition of living together had also been satisfied, no evidence was provided to support a commitment to a shared life.
“We note the beneficiary’s advanced age when the deceased moved in with them. This, combined with the beneficiary’s health conditions, would suggest that the arrangement was out of necessity rather than a want to share a future together,” the ruling stated.
Additionally, there was not adequate documentation to support the statements in relation to domestic support and personal care.
“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,” the ruling concluded.
“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. The taxable component of the superannuation lump sum death benefits to be paid to the beneficiaries is assessable income, taxed under section 302-145 of the ITAA 1997.”
If this is the law, it is a misguided one which needs to be amended. But, upon examination s302-200 makes absolutely no mention whatsoever of “sharing a future together”. Where does the ATO get this stuff? It is just made up jibble jabble attempting to justify their position that no-one falls within this provision. Let’s be frank, such a position is simply ludicrous – the legislation is clear on its face – when someone is facing death, there is no more compelling argument that an “interdependency relationship exists.