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Can a taxpayer who is a child beneficiary over 18 years of age be a 'death benefits dependant' of the deceased for the purposes of section 302-195 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Yes, in this case the taxpayer was considered to be a death benefits dependant for the purposes of section 302-195 of the ITAA 1997.

In this case the taxpayer (a child of the deceased) was paid a death benefit on the death of the parent. The taxpayer was over 18 years of age at the time of death. The taxpayer had given up work to care for the terminally ill parent and received no financial support from anyone, other than the parent, during that time.

Under subsection 302-195(1) of the ITAA 1997, a 'death benefits dependant' as defined includes: (a) the spouse or former spouse of a person, (b) any child of the person under the age of 18 years, (c) any other person with whom the deceased person had an interdependency relationship under section 302-200 of the ITAA 1997 just before he or she died, and (d) any other person who was dependant of the deceased person just before he or she died.

The definition of death benefits dependant in paragraph 302-195(1)(d) does not stipulate the nature or degree of dependency, but it is generally accepted that this refers to financial dependence and it is a condition that must exist in relation to the taxpayer at the time of the deceased's death.

The taxpayer was financially dependent on the deceased at the time of death.

Note: The taxpayer and parent also satisfied the interdependency relationship requirement under paragraph 302-195(1)(c) and as described in paragraphs 302-200(1)(a),(b),(c) and (d) of the ITAA 1997: that is, the taxpayer and parent had a close relationship; they lived together; the parent provided financial support for the taxpayer; and the taxpayer was providing significant care for the parent.