Show at F the deduction for insurance premiums paid by a complying superannuation fund to provide superannuation benefits upon the death, existence of a terminal medical condition or temporary or permanent disability of the member.
A fund may use a variety of life insurance policies to provide these benefits. The fund can deduct the following:
- 30% of the premium for a whole-of-life policy if all the individuals whose lives are insured are members of the fund (for more information on what a 'whole-of-life policy' is for these purposes see ATO ID 2009/100Complying superannuation fund: deductibility of premiums on 'whole-of-life policy' - subsection 295-465(1) of the ITAA 1997.
- 10% of the premium for an endowment policy if all the individuals whose lives are insured are members of the fund
- for a policy that is not a whole-of-life or endowment policy
- 30% of the part of a premium that is specified in the insurance policy as being for a distinct part of the policy that would have been a whole-of-life policy if it had been a separate policy
- 10% of the part of a premium that is specified in the insurance policy as being for a distinct part of the policy that would have been an endowment policy if it had been a separate policy
- the part of a premium that is specified in an insurance policy as being wholly for the liability to provide certain death, terminal medical condition or disability benefits, as described in section 295-460 of the ITAA 1997, for fund members
- if the fund so chooses, the proportion of the premium that is specified in the regulations as being attributable to the liability to provide death or disability superannuation benefits for fund members, as described in section 295-460 of the ITAA 1997. These deductible proportions are:
For an insurance policy that provides… |
You can deduct… |
TPD any occupation cover |
100% |
TPD any occupation cover with one or more of the following inclusions:
|
100% |
TPD own occupation cover |
67% |
TPD own occupation cover with one of more of the following inclusions:
|
67% |
TPD own occupation cover bundled with death (life) cover |
80% |
TPD own occupation cover bundled with death (life) cover with one or more of the following inclusions:
|
80% |
- An actuarial certificate is not required in order for the premium, or part of the premium, to be deductible in any of the above circumstances.
For any other insurance policy premium that is not deductible in accordance with the above circumstances, or where the fund chooses to deduct a proportion of the premium other than that specified under the regulations, an actuarial certificate is required in order to obtain a deduction for all or part of the premium that is to provide superannuation benefits upon the death, existence of a terminal medical condition or disability of the member.
For more information, see Draft Taxation Ruling TR 2011/D6 Income tax: deductibility under subsection 295-465(1) of the Income Tax Assessment Act 1997 of premiums paid by a complying superannuation fund for an insurance policy providing Total and Permanent Disability cover in respect of its members.
End of further informationA complying fund may also deduct premiums on insurance policies to replace income during periods of temporary disability.
For more information, see TD 2007/3Income tax: is a deduction allowable to complying superannuation funds, under section 279 of the Income Tax Assessment Act 1936, for insurance premiums attributable to the provision of benefits for members in the event of temporary disability longer than two year?
End of further informationIn the case of funds that self-insure, a deduction is allowable for an amount equal to a reasonable arm's length premium for the cost of death, terminal medical condition and disability cover provided. An actuarial certificate is also required in order for the premium to be deductible.
Where a fund self insures, it may deduct an amount equal to the proportion of a reasonable arm's length premium where the proportion is specified in the regulations as being attributable to the liability to provide death or disability superannuation benefits for fund members, as described in section 295-460 of the ITAA 1997. These deductible proportions are the same proportions as for funds that pay an actual insurance premium, as set out in the table above. An actuarial certificate is not required in order for the amount to be deducted in this circumstance.
Rather than claiming a deduction for insurance premiums paid, a complying fund may choose to deduct (under section 295-470 of the ITAA 1997) an amount based on a formula for payments for the income year for death, terminal medical condition or disability superannuation benefits. Deductions for this amount should be included at F.