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WHAT ARE THE DEATH BENEFITS FOR THE DEPENDENTS OF THE DECEASED?

24
May

After a person passes away, his dependent beneficiary or trustee of the deceased estate will receive a payment for the deceased’s death benefit. This payment should be made soon after his/her death. This payment is regulated by Superannuation Industry (Supervision) Regulations 1994 (SISR).
This type of payment has two forms:

• A lump sum payment: You will get tax exemption for the whole amount if you pay lump sum benefit to a dependant. In these instances, it is required to consider that, whether these lump sums contain taxable or non-taxable elements. For providing such benefits to a non-dependant, you must assess the tax exempted and taxable elements for each benefit disbursed. A lump sum benefit can be a payment of up to $340,100.
•  A super income stream: If the death benefits are made as an income stream, the taxable and tax exempted elements are assessed by means of the proportioning rule. The result from the calculation will pertain to all benefits disbursed from the income stream. The exchange of the income stream is also contained within such benefits. While paying a death benefit income stream to the deceased person’s dependent child, unless the child suffers a permanent handicap, you must:

1. Stop paying the income stream on or before the date the child turns 25 years’ old; \
2. Pay the remaining benefit as a tax exempted lump sum.