Anti Detriment Payments: new ID released

The ATO has released a new ID dealing with anti-detriment top ups of superannuation lump sums.  The ID deals with the situation where the member’s entire death benefit is to be paid to the Estate of the Member and the Trustee of the Super Fund has been advised by the Executor of the Estate that only 50% of the lump sum to be paid by the Fund will be a tax act dependant of the deceased member.

The ID provides that the Trustee of the Super Fund can increase the lump sum payment to the Estate by 50% of the tax saving amount.
 
Caution should be applied to this ID.  The ID is dealing with the meaning of a particular subsection of the anti-detriment provision (s 295-485) which deals with payment of superannuation lump sums to the executor of the estate of the deceased member and expressly incorporates a pro-rata concession.  There is no corresponding subsection for superannuation payments made directly to a beneficiary who is, or was, a Tax Act dependant of the member.

Caution and prudence suggests that if a SMSF Trustee intends to top up a death benefit payment directly to a Tax Act dependant of the deceased member but is only able to pay a portion of the tax saving amount, the trustee should ensure that there is a discrete payment the amount which has been calculated by reference to the portion of the tax saving amount which can be paid.