We all know the power of anti-oxidants in our foods that provide our bodies with goodness. Another ‘anti’ I want to introduce you to is the ‘anti-detriment’.

Anti who? or Aunty who? As the advert asks that brought anti oxidants to our attention.

Well unlike a distant relative that may out stay their welcome this piece of taxation legislation is linked to your superannuation account and can provide some goodness to your family estate planning and superannuation position.

The anti-detriment deduction and payment can be significant to a superannuation fund that is going to continue after the death of a member.

The idea behind the anti detriment deduction is to ensure that the spouse and children of a deceased member do not suffer detriment because of the contributions tax that was levied on the deceased member’s benefits during their lifetime.

Last month I met with a client whose husband had passed away recently at age 51. They have a disabled son who is on a Centrelink Disability Support Pension and thankfully they had life insurances in place held by their self-managed super fund.

As she will remain a member of the fund the payment of an anti-detriment amount from the superannuation fund resulted in a deduction within the fund.  This deduction can be used to offset future contribution tax and even capital gains tax within the fund on her death.

In simple terms if the trustee pays a death benefit lump sum to a financial dependant spouse or child of the deceased and the trustee increases the lump sum amount by an amount known as the ‘anti detriment amount’, so that the total lump sum reflects what could have been paid if there had been no contributions tax levied during the deceased’s lifetime, then the trustee is entitled to a deduction equal to the ‘anti detriment amount’ divided by 15%.

Over his lifetime her husband had paid $80,000 in contributions tax, so the fund with the insurance proceeds structured correctly could receive a $533,333 deduction.

Now that is a lifetime of contributions tax and this is where good advice comes into play. In order to access the goodness of the anti-detriment deduction you need a plan in place.

This also highlights the importance of your professional advisers working collaboratively, as your accountant, financial planner, Self Managed Super Fund Specialist and Estate Planning Specialist all play an important role in setting the plan in action.

If you are looking to review your current superannuation plan or have been thinking about creating your own Self Managed Superannuation Fund contact Money Mechanics today to review your current arrangements and get the right structures in place.

Scott Malcolm (scott@money-mechanics.com.au) is Director of Money Mechanics (ph: 6257 5557) a fee for service advice firm who are authorised to provide financial advice through PATRON Financial Advice AFSL 307379.


The information provided on this article is of a general nature only. It has been prepared without taking into account your objectives, financial situation or needs.  Before acting on this information you should consider its appropriateness having regard to your own objectives, financial situation and needs.