Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1993 No. 7 of 1993 - SECT 13

13. After section 27A of the Principal Act the following section is inserted:
Special rules for death benefits (Outline of section)

"27AAA.(1) This section:

   (a)  defines the types of payments that are treated as death benefits for
        the purpose of the rules providing for taxing of ETPs; and

   (b)  provides concessional treatment for death benefits that are paid in
        relation to dependants. (Table of death benefits)

"(2) Table 1 sets out the payments that are death benefits for the purposes of
this section. In applying the table, the dependant's concessions provided by
this section are ignored in deciding whether a payment is covered by a
particular ETP paragraph.
TABLE 1-DEATH BENEFITS
    Item    ETP            When payment is a death benefit    Dependant's

            paragraph                                         concession (if

any)
    1      (a), (b),       if the payment is made after the   calculated

           (c), (d),       death of the taxpayer to the       under

           (e), (g) or     trustee of the taxpayer's estate   subsection (3)


   (h) 
    2      (aa), (ba),     always                             calculated

           (ca), (db),                                        under

           (f), (gb) or                                       subsection (4)


   (j) 
    3      (da) or         always                             calculated

           (ga)                                               under

subsection (3)
    4      (d) or (g)      if the payment is connected        calculated

                           with a deceased person as          under

                           described in subsection (6)        subsection (4)

and is made within the period
specified in subsection (7) (Dependant's concession for Items 1 and 3)

"(3) In the case of a death benefit covered by Item 1 or 3 in Table 1, the
amount that would otherwise be an ETP in relation to the deceased taxpayer is
to be reduced by such amount (if any) as the Commissioner considers
appropriate having regard to the extent to which dependants of the deceased
taxpayer may reasonably be expected to benefit from the estate. However, the
ETP is not to be reduced to an amount less than the notional excessive
component (if any) that applies to the death benefit under subsection (5).
(Dependant's concession for Items 2 and 4)

"(4) This subsection applies if a death benefit covered by Item 2 or 4 in
Table 1 is paid to a taxpayer who was a dependant of the deceased person
referred to in the relevant ETP paragraph, either at the time of the deceased
person's death or at the time of payment of the death benefit. The amount that
would otherwise be an ETP in relation to the taxpayer is not to exceed the
notional excessive component (if any) that applies to the death benefit under
subsection (5). (Notional excessive component of a death benefit)

"(5) The notional excessive component of a death benefit is the amount that
would be worked out under Division 14 as the excessive component of the death
benefit if the whole of the death benefit were treated as an ETP for the
purposes of that Division. (Required link with deceased person for Item 4
death benefit)

"(6) In order to be covered by Item 4 in Table 1, the pension or annuity that
was commuted as mentioned in ETP paragraph (d) or (g) must be a pension or
annuity that:

   (a)  before it became payable to the taxpayer, was payable to another
        person who has died; or

   (b)  became payable to the taxpayer because of the death of another person.
        (Period for paying Item 4 death benefit)

"(7) In order to be covered by Item 4 in Table 1, the payment must be made:

   (a)  within 6 months after the death of the deceased person mentioned in
        subsection (6); or

   (b)  within 3 months after the grant of probate of that deceased person's
        will or letters of administration of that deceased person's estate;
        whichever is the longer period. (Definitions)

"(8) In this section:
'ETP paragraph' means any of the paragraphs of the definition of 'eligible
termination payment' in subsection 27A(1).".