Linda Cheesman provided a brief update on the following product processing issues:
Superannuation Holding Account special account (SHAsa)
After cancellation of the December 2011 and January 2012 payment processes, the ATO resumed regular monthly process in February 2012.
No issues were reported by funds in relation to the Remittance advices released; tax free payments were correctly reported to funds in an ORM file.
Note - Aged ATO held individuals' co-contribution remittance entitlements without a valid payment destination are being transferred to SHA. Where the ATO identifies a valid destination, or the individual (or their fund) makes a claim, the money is released.
SHAsa monthly payment process will be suspended for the month of June 2012 as a part of our end of year payment processing strategy.
The ATO has a pool of approx 20,000 co-contribution entitlements that are to be transferred to SHA; we are working through our strategy to move them across over the coming months.
It is not expected that this additional and ongoing workflow will greatly impact funds, until peak lodgment periods (LMS, USM and MCS) result in an update some of the individual's account destination details, allowing the payments to be released.
Co-contributions Recovery Notices
After long delays in running a recovery process, and several small trial runs in 2011/12, the ATO implemented a full monthly recovery notice process late in January 2012
As advised by CRT Alert 007/2012 issued 10 February 2012, the February Recovery process was cancelled: This decision was taken to
- allow funds sufficient time to process the larger than normal file;
- free up ATO systems to generate the TFN notification process
- ensure any unexpected issues can be resolved.
In relation to the January process, Funds were asked to provide feedback on their experience to ensure the ATO understands from an end to end perspective, whether there are any issues to address. Funds reported:
- Files could be loaded without issue and processing presented no real current day problems, payment variation advices (PVA) could be processed to the ATO without issue.
- The absolute length of delay meant that records of co-contributions received were stored on a legacy system, slowing down fund processes to validate and recover amounts or reject.
- A number of recoveries have been previously rejected by payment variation advice for an earlier recovery notice and others had already been recovered. Funds have provided examples to Supercrt@ato.gov.au
- A number of funds indicated no outcome of lodgment report has been received in relation to their PVA.
- ATO needs to be aware of the confusion and frustration that builds with the monthly process continuously being on/off and on/off again. The ATO needs to ensure appropriate communications are issued so funds understand which process is running or has been cancelled.
Action item:
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14032012/10
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Responsibility:
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ATO to review example cases provided by funds where an outcome of lodgment report has not been received in relation to a Co-contribution recovery Notice payment variation advice lodgment.
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Phil McDonald
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Funds also reported numerous enquiries have been received from members about the deduction from their account. Funds sought clarity from the ATO regarding communication with members when there is an overpayment recovered.
The ATO reported that no correspondence is issued to the member at the time of the recovery process, which is a transaction between the ATO and funds.
The ATO has no legislative requirement to notify the member at the time of recovery.
Any obligation of communication rests with the transaction undertaken when we amend the member's co-contribution entitlement.
Ordinarily this would have occurred no more than 3 months prior.
Recovery of overpayments occurs when there is an amendment to the members entitlement through one of the following events:
- An amendment to the member's assessable income that impacts their eligibility to a co-contribution entitlement (i.e. assessable income now exceeds the
co-contributions eligibility threshold). or
- A Fund amends the member's MCS resulting in a reduction to the value of personal contributions during the period; or
- ATO resolves any systems defect impacting the correct calculation of an individual's eligibility, or co-contribution entitlement amount payable
While there has been a significant delay to the ATO running monthly recovery processes, amendments to member entitlements have continued on regardless.
Given the elapsed time, there may be a disconnect for the member between:
- Any interactions with the fund or the ATO (that impacted the member's entitlement), and
- The January 2012 recovery process.
The ATO will monitor this issue and determine the way forward with this concern
The ATO reminded members that the Individuals portal with the enhanced display of their superannuation account information will provide one solution to the communications issue.
Sections within Agenda items
Last Modified: Friday, 3 August 2012