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  • Additional tax on concessional contributions (Division 293 tax) – deferred debt obligations for funds

    When Division 293 tax is assessed on a super fund member's defined benefit contributions, the debt is deferred.

    We send the super fund a 'Notice of debt account creation', advising of fund members who have a deferred debt account created based on the member's defined benefit contributions that have been reported to us.

    The 'Notice of debt account creation' is a paper correspondence.

    Funds are expected to keep this notice until a member's end benefit becomes payable.

    End benefit becomes payable

    Super funds with defined benefit members are required, by law, to advise us when a member’s end benefit becomes payable. This allows us to finalise the deferred debt account and provide the member with a Debt account discharge liability notice.

    Super funds must contact us within 14 days from the earlier of either when the fund receives a request to pay the end benefit, or when the super benefit becomes payable. The following information is to be provided in the approved form:

    • the date the member made the request
    • the date on which the benefit became payable
    • the date on which the benefit will be paid
    • the end benefit cap amount, which only needs to be provided if a deferred debt account still exists.

    Next step:

    Division 293 deferred debt account status requests

    Super funds can contact the Commissioner to ask if a member's Division 293 deferred debt account is in debt by:

    • using the Provision of Details (POD) service, an optional component that super funds may have chosen to build into their Member Account Attribute Service (MAAS)
    • sending an email requesting the account status to our Super CRT mailbox: SuperCRT@ato.gov.au including reference number MBR-293 in the subject line
    • contacting Super CRT by email and arranging to submit the request with the required information using our secure Data Transfer Facility (DTF).

    For email account status requests, the following information must be provided:

    • fund name
    • fund ABN
    • first and last name of the person making the request (must be an authorised contact for the fund)
    • position held by the person making the request
    • business hours phone number
    • member account number
    • first and last name of the member
    • member's date of birth
    • member's address
    • one of the following declarations:
      • if the request is sent via unencrypted email – 'I declare that the information in this email is true and correct. I understand that the ATO does not control the path of inbound emails, so the privacy of information sent by unencrypted email cannot be guaranteed. I am aware of this risk if I choose to communicate with the ATO via email.'
      • if the request is sent via Data Transfer Facility – 'I declare that the information given in this request is true and correct.'

    Once the request has been received, we will aim to respond within five business days to advise if the member’s Division 293 deferred debt account is in debt or not in debt.

    End benefit cap

    A member's end benefit cap amount needs to be calculated by the super fund if:

    • the fund is advised by the Commissioner that the member's deferred debt account is in debt, or
    • the fund did not contact the Commissioner to ask if the member's Division 293 deferred debt account is in debt.

    The end benefit cap is 15% of the employer-financed component of any part of the value of the super interest that accrued after 1 July 2012. The value of the super interest is to be worked out at the end of the financial year before the financial year in which the end benefit becomes payable. A fund may need actuarial guidance on how to calculate the end benefit cap.

    If a member's Division 293 deferred debt account is not in debt, the fund will not be required to calculate an end benefit cap for that member. The fund is still required to send an End benefit notice to the Commissioner and select ‘Not Applicable’ at Question 15, next to 'What is the end benefit cap amount?'

    If a fund discovers a material change or omission in the information provided to us as part of the end benefit process, the fund must advise us within seven days of discovery of the change/omission. To do this, re-lodge the End benefit notice – superannuation provider Division 293 tax form (NAT 74728).

    Next step:

    • End benefit notice – superannuation provider Division 293 tax
      Last modified: 15 Apr 2019QC 36567