Tax Dependant

A tax dependant is someone defined under the tax law as able to receive your superannuation death benefit free of death benefits tax. This group is narrower than a death benefit dependant: it includes your spouse or de-facto partner, a child under 18, a financial dependant, and someone in an interdependency relationship — but generally not a financially independent adult child. The distinction drives how much tax, if any, a beneficiary pays.

Whether a beneficiary is a tax dependant decides if the benefit is received tax-free or taxed on its taxable component. Example: Glen's super passed to his wife (a tax dependant) entirely tax-free, but the same super left to his 35-year-old daughter would have been taxed because an independent adult child is not a tax dependant. This is why many estate plans steer super towards a spouse and other assets towards independent adult children.