What are special circumstances?
By definition, most circumstances are not 'special circumstances'. Australia's courts have made it clear that 'special circumstances' are limited to circumstances that make your case different from the ordinary or usual case. Circumstances are special only if, in addition to being different from the usual case, the ordinary application of the law would provide a result that is unjust, unfair or otherwise inappropriate.
We must follow this approach when we make our decisions - that is, unless there are special circumstances, we can't exercise the discretion, even if we are satisfied that you genuinely didn't mean to exceed a contributions cap.
Our courts have also warned that it isn't possible to give precise rules about what constitutes special circumstances, so each case must be considered on its facts. It isn't enough that circumstances were unusual for you.
We will look at all of your circumstances to determine if they are out of the ordinary or unusual. Sometimes a particular factor won't amount to special circumstances but, when combined with others, it may take a case out of the ordinary and make applying the law unjust, unfair or inappropriate. When we consider whether you being liable for the tax is unfair or unjust, we will take into account how the law is meant to apply in the ordinary case.
Simply having to pay ECT isn't unjust, unfair or otherwise inappropriate. Paying ECT is an intended outcome of the law if your contributions to super exceed a contributions cap.
Nor do unintentionally exceeding a contributions cap, misunderstanding the law or facts, or being given incorrect or incomplete advice amount to special circumstances on their own. Usually these will simply be the circumstances in which you placed yourself rather than special circumstances.
We can only disregard or reallocate excess contributions if it's consistent with the object of the ECT legislation to do so. It would give an advantage to those who didn't make sufficient effort to understand the law, or who chose advisers who didn't understand the law, over those who understood the law and worked within its limits if we exercised the discretion just because someone made an error.
Sections within Disregarding or reallocating your contributions
Last Modified: Tuesday, 14 August 2012