diff --git a/src/interpreter.rs b/src/interpreter.rs
index 31d477d..a259bee 100644
--- a/src/interpreter.rs
+++ b/src/interpreter.rs
@@ -474,6 +474,7 @@ impl<'source> Interpreter<'source> {
                     panic!();
                 }
             }
+            Literal::NotExpr { expr, .. } => matches!(self.eval_expr(expr)?, Value::Bool(false)),
             _ => unimplemented!(),
         });
 
@@ -1347,6 +1348,108 @@ impl<'source> Interpreter<'source> {
         }
     }
 
+    fn check_default_value(&self, expr: &'source Expr<'source>) -> Result<()> {
+        use Expr::*;
+        let (kind, span) = match expr {
+            // Scalars are supported
+            String(_) | RawString(_) | Number(_) | True(_) | False(_) | Null(_) => return Ok(()),
+
+            // Uminus of number is treated as a single expression,
+            UnaryExpr { expr, .. } if matches!(expr.as_ref(), Number(_)) => return Ok(()),
+
+            Var(span) => ("var", span),
+
+            // Check each item in array/set.
+            Array { items, .. } | Set { items, .. } => {
+                for item in items {
+                    self.check_default_value(item)?;
+                }
+                return Ok(());
+            }
+
+            // Check each field in object
+            Object { fields, .. } => {
+                for (_, key, value) in fields {
+                    self.check_default_value(key)?;
+                    self.check_default_value(value)?;
+                }
+                return Ok(());
+            }
+
+            // Check each statement in comprehensions
+            ArrayCompr { term, query, .. } | SetCompr { term, query, .. } => {
+                self.check_default_value(term)?;
+                for stmt in &query.stmts {
+                    self.check_default_value_in_stmt(stmt)?;
+                }
+                return Ok(());
+            }
+
+            ObjectCompr {
+                key, value, query, ..
+            } => {
+                self.check_default_value(key)?;
+                self.check_default_value(value)?;
+                for stmt in &query.stmts {
+                    self.check_default_value_in_stmt(stmt)?;
+                }
+                return Ok(());
+            }
+
+            Call { span, .. } => ("call", span),
+            UnaryExpr { span, .. } => ("unaryexpr", span),
+            RefDot { span, .. } => ("ref", span),
+            RefBrack { span, .. } => ("ref", span),
+            BinExpr { span, .. } => ("binexpr", span),
+            BoolExpr { span, .. } => ("boolexpr", span),
+            ArithExpr { span, .. } => ("arithexpr", span),
+            AssignExpr { span, .. } => ("assignexpr", span),
+            Membership { span, .. } => ("membership", span),
+        };
+
+        Err(span.error(format!("invalid `{kind}` in default value").as_str()))
+    }
+
+    fn check_default_value_in_stmt(&self, stmt: &'source LiteralStmt<'source>) -> Result<()> {
+        for m in &stmt.with_mods {
+            self.check_default_value(&m.refr)?;
+            self.check_default_value(&m.r#as)?;
+        }
+
+        match &stmt.literal {
+            Literal::SomeVars { span, .. } => {
+                Err(span.error("invalid `some vars` in default value"))
+            }
+            Literal::SomeIn {
+                key,
+                value,
+                collection,
+                ..
+            } => {
+                self.check_default_value(key)?;
+                if let Some(value) = &value {
+                    self.check_default_value(value)?;
+                }
+                self.check_default_value(collection)
+            }
+            Literal::Expr { expr, .. } | Literal::NotExpr { expr, .. } => {
+                self.check_default_value(expr)
+            }
+            Literal::Every { span, .. } => Err(span.error("invalid `every` in default value")),
+        }
+    }
+
+    fn check_default_rules(&self) -> Result<()> {
+        for module in &self.modules {
+            for rule in &module.policy {
+                if let Rule::Default { value, .. } = rule {
+                    self.check_default_value(value)?;
+                }
+            }
+        }
+        Ok(())
+    }
+
     fn eval_default_rule(&mut self, rule: &'source Rule<'source>) -> Result<()> {
         // Skip reprocessing rule.
         if self.processed.contains(rule) {
@@ -1368,12 +1471,7 @@ impl<'source> Interpreter<'source> {
                 Parser::get_path_ref_components_into(refr, &mut path)?;
                 let paths: Vec<&str> = path.iter().map(|s| s.text()).collect();
 
-                if matches!(
-                    value,
-                    Expr::Var(_) | Expr::RefBrack { .. } | Expr::RefDot { .. }
-                ) {
-                    bail!("illegal default rule (value contains a variable or reference)");
-                }
+                self.check_default_value(value)?;
                 let value = self.eval_expr(value)?;
 
                 // Assume at this point that all the non-default rules have been evaluated.
@@ -1495,6 +1593,7 @@ impl<'source> Interpreter<'source> {
             self.data = data.clone();
         }
 
+        self.check_default_rules()?;
         self.update_function_table()?;
         self.gather_rules()?;
 
diff --git a/src/lexer.rs b/src/lexer.rs
index cfa479f..a646485 100644
--- a/src/lexer.rs
+++ b/src/lexer.rs
@@ -61,6 +61,14 @@ impl<'source> Span<'source> {
     pub fn text(&self) -> &'source str {
         &self.source.contents[self.start as usize..self.end as usize]
     }
+
+    pub fn message(&self, kind: &str, msg: &str) -> String {
+        self.source.message(self.line, self.col, kind, msg)
+    }
+
+    pub fn error(&self, msg: &str) -> anyhow::Error {
+        self.source.error(self.line, self.col, msg)
+    }
 }
 
 impl<'source> Debug for Span<'source> {
diff --git a/src/parser.rs b/src/parser.rs
index db7449d..b7f1668 100644
--- a/src/parser.rs
+++ b/src/parser.rs
@@ -15,7 +15,6 @@ pub struct Parser<'source> {
     line: u16,
     end: u16,
     future_keywords: BTreeMap<&'source str, Span<'source>>,
-    in_default_value: bool,
 }
 
 const FUTURE_KEYWORDS: [&str; 4] = ["contains", "every", "if", "in"];
@@ -31,7 +30,6 @@ impl<'source> Parser<'source> {
             line: 0,
             end: 0,
             future_keywords: BTreeMap::new(),
-            in_default_value: false,
         })
     }
 
@@ -550,22 +548,6 @@ impl<'source> Parser<'source> {
             }
         }
 
-        if self.in_default_value {
-            if let Some((kind, span)) = match &term {
-                Expr::Var(v) => Some(("var", v)),
-                Expr::RefDot { span, .. } => Some(("ref", span)),
-                Expr::Call { span, .. } => Some(("call", span)),
-                Expr::RefBrack { span, .. } => Some(("ref", span)),
-                _ => None,
-            } {
-                return Err(self.source.error(
-                    span.line,
-                    span.col,
-                    format!("invalid {kind} in default value").as_str(),
-                ));
-            }
-        }
-
         Ok(term)
     }
 
@@ -1418,9 +1400,7 @@ impl<'source> Parser<'source> {
 
         // todo: Rego errors for binary expressions here, but they are
         // somehow valid in a comprehension
-        self.in_default_value = true;
         let value = self.parse_term()?;
-        self.in_default_value = false;
         span.end = self.end;
         Ok(Rule::Default {
             span,
diff --git a/tests/interpreter/cases/default/basic.yaml b/tests/interpreter/cases/default/basic.yaml
index b3a9c5a..fb1ab57 100644
--- a/tests/interpreter/cases/default/basic.yaml
+++ b/tests/interpreter/cases/default/basic.yaml
@@ -12,7 +12,7 @@ cases:
 
         a = b
 
-        default b = 6
+        default b = -6
 
         c = d
 
@@ -34,11 +34,23 @@ cases:
 
         complex["hello"] = "world"
 
+        default empty_array = []
+        default empty_set = set()
+        default empty_object = {}
+        default null_value = null
+        default true_value = true
+        default false_value = false
+        default string_value = "abc"
+        default composite_value = [ 1, {2}, {"a": 5}]
+        default array_compr = [5 | true]
+        default set_compr = {5 | true}
+        default object_compr = {"a":5 | true}
+        default empty_array_1 = [1 | not 1]
     query: data.test
     want_result:
       x: 5
-      a: 6
-      b: 6
+      a: -6
+      b: -6
       c: "has_default"
       d: "has_default"
       object:
@@ -53,4 +65,284 @@ cases:
           value: "bool_false"
         - key: "hello"
           value: "world"
-      
+      empty_array: []
+      empty_set:
+        set!: []
+      empty_object:
+        object!: []
+      null_value: null
+      true_value: true
+      false_value: false
+      string_value: "abc"
+      composite_value:
+        - 1
+        - set!: [2]
+        - a: 5
+      array_compr: [5]
+      set_compr:
+        set!: [5]
+      object_compr:
+        a: 5
+      empty_array_1: []
+
+  - note: invalid-var
+    data: {}
+    modules:
+      - |
+        package t
+        default a = x
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-set-aray
+    data: {}
+    modules:
+      - |
+        package t
+        default a = [ {x} ]
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-object-key
+    data: {}
+    modules:
+      - |
+        package t
+        default a = { x : 5 }
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-object-value
+    data: {}
+    modules:
+      - |
+        package t
+        default a = { "x" : x }
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-array-compr-output
+    data: {}
+    modules:
+      - |
+        package t
+        default a = [ x | 1 ]
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-array-compr-query
+    data: {}
+    modules:
+      - |
+        package t
+        default a = [ 1 | true; x ]
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-set-compr-output
+    data: {}
+    modules:
+      - |
+        package t
+        default a = { x | 1 }
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-array-compr-query
+    data: {}
+    modules:
+      - |
+        package t
+        default a = { 1 | true; x }
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-object-compr-key
+    data: {}
+    modules:
+      - |
+        package t
+        default a = { x : 5 | true }
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-object-compr-value
+    data: {}
+    modules:
+      - |
+        package t
+        default a = { "x" : x | true }
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-object-compr-query
+    data: {}
+    modules:
+      - |
+        package t
+        default a = { "a" : 5 | x }
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-call
+    data: {}
+    modules:
+      - |
+        package t
+        default a = incr(5)
+    query: data
+    error: invalid `call` in default value
+
+  - note: invalid-unaryexpr
+    data: {}
+    modules:
+      - |
+        package t
+        default a = -b
+    query: data
+    error: invalid `unaryexpr` in default value
+
+  - note: invalid-refdot
+    data: {}
+    modules:
+      - |
+        package t
+        default a = {"b" : 5}.b
+    query: data
+    error: invalid `ref` in default value
+
+  - note: invalid-refbrack
+    data: {}
+    modules:
+      - |
+        package t
+        default a = ["abc"][0]
+    query: data
+    error: invalid `ref` in default value
+
+  - note: invalid-binexpr
+    data: {}
+    modules:
+      - |
+        package t
+        default a = ({5} | {6})
+    query: data
+    error: invalid `binexpr` in default value
+
+  - note: invalid-boolexpr
+    data: {}
+    modules:
+      - |
+        package t
+        default a = (5 > 6)
+    query: data
+    error: invalid `boolexpr` in default value
+
+  - note: invalid-arithexpr
+    data: {}
+    modules:
+      - |
+        package t
+        default a = (5 + 6)
+    query: data
+    error: invalid `arithexpr` in default value
+
+  - note: invalid-assignexpr
+    data: {}
+    modules:
+      - |
+        package t
+        # This is rejected by parser.
+        default a = (x = 5)
+    query: data
+    error: expecting `)`
+
+  - note: invalid-membership
+    data: {}
+    modules:
+      - |
+        package t
+        import future.keywords
+        # Following is rejected by parser
+        default a = 5 in {5}
+    query: data
+    error: unexpected keyword `in`
+
+  - note: invalid-some-vars
+    data: {}
+    modules:
+      - |
+        package t
+        default a = [5 | some a]
+    query: data
+    error: invalid `some vars` in default value
+
+  - note: invalid-some-vars
+    data: {}
+    modules:
+      - |
+        package t
+        default a = [5 | some a]
+    query: data
+    error: invalid `some vars` in default value
+    
+  - note: invalid-every
+    data: {}
+    modules:
+      - |
+        package t
+        import future.keywords
+        default a = [5 | every x in [1,2,3] { true }]
+    query: data
+    error: invalid `every` in default value
+
+  - note: invalid-var-in-some-in-key
+    data: {}
+    modules:
+      - |
+        package t
+        import future.keywords
+        default a = [5 | some x in {5}]
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-some-in-value
+    data: {}
+    modules:
+      - |
+        package t
+        import future.keywords
+        default a = [5 | some 5, x in {5}]
+    query: data
+    error: invalid `var` in default value
+    
+  - note: invalid-var-in-some-in-collection
+    data: {}
+    modules:
+      - |
+        package t
+        import future.keywords
+        default a = [5 | some 5, 5 in x]
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-not-expr
+    data: {}
+    modules:
+      - |
+        package t
+        import future.keywords
+        default a = [5 | not x]
+    query: data
+    error: invalid `var` in default value
+
+  - note: invalid-var-in-expr
+    data: {}
+    modules:
+      - |
+        package t
+        import future.keywords
+        default a = [5 | x]
+    query: data
+    error: invalid `var` in default value
+