Commissioners discretion

The Commissioner can make a written determination to exercise discretion and allocate all or part of a person's concessional or non-concessional contribution to a different financial year or disregard all or part of a contribution for the purposes of ECT under subsection 292-465(1)External Link.

Criteria for exercising discretion

In accordance with subsection 292-465(3),External Link discretion can only be exercised if we recognise there are special circumstances, and making the determination will be consistent with the objective of the ECT rules.

Special circumstances are legally defined as unusual, exceptional, abnormal or uncommon if applying the law would result in an unjust, unfair or otherwise inappropriate outcome.

Section 292-5External Link states that the object of the ECT is to ensure that the amount of concessionally taxed super benefits received by a person results from super contributions that have been made gradually over the course of the person's life.

The Commissioner's discretion can only be used in limited circumstances. Whether a person's circumstances will be considered special will depend on the individual facts of their case. The following are generally not considered to be special circumstances:

  • financial hardship from having to pay the tax
  • not knowing the law
  • incorrect professional advice
  • making a mistake.

Simply being liable to pay ECT is not a special circumstance. It is the intent of the legislation that a person is liable to pay ECT if they make contributions to their super fund that exceeds the person's contribution cap.

In accordance with subsections 292-465(5) and (6),External Link we, in making the determination, may consider whether:

  • a contribution made in the relevant income year would be more appropriately be allocated towards another income year instead
  • it was reasonably foreseeable, when the contribution was made, that the person would have excess concessional contributions or excess non-concessional contributions for the relevant income year, and in particular
    • if the relevant contribution is made by another person - the terms of any agreement or arrangement between the person and the other person as to the amount and timing of the contribution
    • the extent to which the person had control over the making of the contribution
    • any other relevant matters.
    Last modified: 22 Nov 2013QC 34181