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4 Jul 2024

Superannuation: Boomerang Children

A question that we often get asked is in relation to adult child and whether an interdependency exists if they are living at home.

That is a difficult question and we recommend you seek legal advice because the Australian Tax Office view is that an arrangement of commercial convenience does not prove a mutual commitment to a shared life which is needed to evidence an interdependency relationship.

The benefit of an interdependency is that there is no 15% lump sum tax plus 2% Medicare to be paid on the taxable component of the superannuation death benefit.

For example, on a $500,000 superannuation death benefit that could be the difference between paying $85,000 in lump sum tax versus NIL if there is an interdependency relationship.

We have a attached a quick reference guide to who qualifies as a dependent under the Superannuation Industry (supervision) Act 1993.

Click for table.

This is also a timely reminder to keep your superannuation death benefit nominations up to date so that the individuals that you have chosen get the money rather than leaving this to the superannuation trustee to decide.

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.


At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.

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