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Key tax and superannuation thresholds

Taxation of super death benefits

Section: 3.5

Super death benefits paid to a death benefits dependant* - 2016/17

The tax-free component is non-assessable non-exempt income and is not subject to tax.


Age of deceased at
time of death

Type of death
benefit

Age of recipient
Taxation of taxable component
Taxed element Untaxed element
Any age Lump sum
 
Any age
 
0% NANE
 
0% NANE
 
Age 60 and above
 
Income stream
 
Any age
 
0% NANE
 
MTR less 10%
tax offset
Below age 60 Income stream Age 60 and above 0% NANE MTR less 10%
tax offset
Below age 60 Income stream Below age 60 MTR less 15% tax offset MTR (no tax offset)

Super death benefits paid to a death benefits non-dependant

Age of
deceased
Type of death
benefit
Age of recipient Taxation of taxable component
Taxed element Untaxed element
Any age
 
Lump sum
 
Any age
 
Max 15%
 
Max 30%
 
Any age Income stream Any age Not permitted after 1 July 2007. Death benefit income streams commenced prior to 1 July 2007 will be taxed in the same manner as if paid to a dependant.

NANE: Non-assessable non-exempt income (not subject to tax). It is ignored when working out your client's taxable income and their tax losses.
MTR: Marginal tax rate.
For all non-zero tax rates, Medicare levy may also apply. For all payments, the tax-free component is NANE. These payments are not subject to tax.
Please refer to Chapter 13 for information on the tax treatment of TPD and SCI.

* a current (or former) legal or de facto spouse, or same sex spouse; a child under age 18, a financial dependant, or a person in an interdependency relationship.

Last modified: Tuesday, May 2, 2017