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  • Release authorities

    A release authority is a document we give to a super fund to authorise release of a member's superannuation.

    When the fund receives a valid release authority, it is authorised to release an amount from the member’s super account according to the instructions outlined in the release authority.

    The release authority will include a 'release authority statement' and instructions for completing it. This is the information you must provide to us to confirm that you have released the member's money in accordance with the release authority.

    There are several types of release authorities. Super changes from 1 July 2018 affect certain release authorities.

    Find out about:

    See also:

    Super changes affecting release authorities

    From 1 July 2018, there are new streamlined processes to release amounts from superannuation. These changes will simplify the process for individuals and super funds by aligning the various administrative processes for different super products.

    The changes affect:

    • excess contributions for the 2013–14 financial year onwards, and
    • Division 293 tax (due & payable and deferred debt accounts) for the 2012–13 financial year onwards.

    Individuals will now have 60 days in which to make an election from the issue date of the assessment or determination. The super fund will release the money directly to us, where it will be offset against any outstanding tax or other Australian Government debts before any remaining balance is refunded to the individual.

    Release authorities issued prior to 1 July 2018 will remain valid until the period for the super fund to make the payment to us has elapsed. Funds may receive both the existing release authorities and the streamlined release authorities for a period of time. Super funds must comply with a valid release authority.

    Types of release authorities and how they work

    There are several types of release authorities.

    Find out about:

    Excess concessional contributions release authority

    The Excess concessional contributions release authority applies to 2013–14 and later financial years.

    A super fund will receive an excess concessional contributions release authority when one of its members has exceeded their concessional contributions cap in 2013–14 and later financial years and elects to release up to 85% of the excess concessional contributions.

    The full amount of excess contributions will be included in the member's taxable income, assessed at the individual's marginal rate of tax, and a 15% tax offset will be applied.

    Amounts of excess concessional contributions that are not released will be treated as non-concessional contributions.

    The released amount must be paid directly to us and is to be treated as a non-assessable, non-exempt benefit payment to the member.

    How to action the release authority

    Within 20 business days from the issue date of the Excess concessional contributions release authority, the super fund must:

    • pay to the ATO the lesser of  
      • the amount stated in the release authority
      • the total amount of the super interest that could be paid at the time from the member's super interests
       
    • send to the ATO a release authority statement which advises
      • the amount that was released to us
      • any amount that could not be released and the reason why it could not be released.
       

    What happens next

    When a fund releases an amount to the ATO, we will:

    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    Refund of excess concessional contributions release authority

    The Refund of excess concessional contributions release authority applies to 2011–12 and 2012–13.

    A super fund will receive a refund release authority when one of its members has:

    • exceeded their concessional contributions cap for the first time by up to $10,000, and
    • accepted a once-only offer from us to have benefits released from their super fund account.

    The excess contributions will be assessed at the individual's marginal rate of tax in the income year that they exceeded the cap. The released amount is to be treated as a non-assessable, non-exempt benefit payment to the member. The fund must pay the money directly to us.

    The refund of excess concessional contributions law has been repealed. It applies only to 2011–12 and 2012–13.

    How to action the release authority

    To action a Refund of excess concessional contributions release authority, the super fund must:

    • pay us the full amount requested on the release authority, using the payment reference number (PRN) on the refund release authority payment slip
    • treat the released amount as a benefit payment to the member
    • complete sections C and E, or D and E of the refund release authority statement and return it to us by the earlier of    
      • 30 days from the issue date on the release authority
      • 7 days of releasing the money.
       

    If you can’t pay the full amount requested, don’t make any payment. Fill in the refund release authority statement:

    • Section D: Reason for not releasing excess concessional contributions
    • Section E: Declaration.

    Do not amend the contributions report provided for the member. Releasing the member benefit does not change the contributions made that led to their excess payments.

    When making a payment, it is important to use the PRN on the refund release authority payment slip because it is different to your general PRN.

    A penalty may be imposed if you do not comply within the applicable timeframes or if you provide false or misleading information.

    What happens next

    When a fund releases an amount to the ATO, we will:

    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    Excess non-concessional contributions release authority

    The Excess non-concessional contributions release authority – issued from 1 July 2018 – applies to 2013–14 and later financial years.

    When a member exceeds their non-concessional contributions cap for the 2013–14 financial year onwards, they have 60 days to elect how the excess amount is to be treated. They can:

    • elect to release their excess non-concessional contributions and 85% of the associated earnings from their nominated super fund, or
    • elect not to release and be assessed for excess non-concessional contributions tax. The member can advise us which super fund they want amounts released from to pay the tax liability.

    A super fund will receive an excess non-concessional contributions release authority when one of its members has exceeded their non-concessional contributions cap and the member has:

    • elected to release the excess non-concessional contributions and 85% of associated earnings from that fund, or
    • the member has not made such an election after 60 days.

    When a fund releases the amount to the ATO, the released amount:

    • is to be treated as a non-assessable, non-exempt benefit payment to the member.
    • must be paid directly to us
    • will be offset against any outstanding tax or other Australian Government debts before any remaining balance is refunded to the member.

    You don’t need to amend the contributions report you provided for this member in your SMSF annual return or via the Member Account Transaction Service (or member contributions statement for 2017–18 and earlier financial years). Releasing this benefit doesn’t change the contributions that led to the excess.

    How to action the release authority

    Within 20 business days from the issue date of the Excess non-concessional contributions release authority, the super fund must:

    • pay to the ATO the lesser of  
      • the amount stated in the release authority
      • the total amount of the super interests that could be paid at the time from the member's super interests
       
    • send to the ATO a release authority statement which advises
      • the amount that was released to us
      • any amount that could not be released and the reason why it could not be released.
       

    What happens next

    When a fund releases an amount to the ATO, we will:

    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    Excess non-concessional contributions tax release authority

    The Excess non-concessional contributions tax release authority – issued from 1 July 2018 – applies to 2013–14 and later financial years.

    When an individual elects to have their excess non-concessional contributions assessed as excess non-concessional contributions tax, they will be able to advise us which fund(s) they would like a release authority issued to, in order to pay their tax liability.

    How to action the release authority

    Within 20 business days from the issue date of the Excess non-concessional contribution release authority, the super fund must:

    • pay to the ATO the lesser of  
      • the amount stated in the release authority
      • the total amount of the super lump sums that could be paid at the time from the member's super interests
       
    • send to the ATO a release authority statement which advises
      • the amount that was released to us
      • any amount that could not be released and the reason why it could not be released.
       

    What happens next

    When a fund releases an amount to the ATO, we will:

    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    Voluntary release authority for excess concessional contributions tax

    The Voluntary release authority for excess concessional contributions applies to 2012–13 and prior financial years.

    We will send an individual a voluntary release authority because we have issued them with an excess concessional contributions tax assessment. They may use the voluntary release authority to withdraw the excess contributions from one or more of their funds up to the amount of their excess concessional contributions tax.

    For 2013–14 and later financial years, any excess concessional contributions will be included in an individual's assessable income. An excess concessional contributions tax assessment and an associated voluntary release authority will only be issued for years up to 2012–13.

    How to action the release authority

    To action a Voluntary release authority:

    • check that the authority is still valid – it must be given to you within 90 days of the date printed on it (Note: Where the 90 day period has elapsed, you are not required to release money unless a condition of release has been met.)
    • work out what amount you must release – you must pay the lesser of 
      • the amount of the excess contributions tax
      • the amount nominated by the member
      • the total value of the member’s super interests in your fund (other than a defined benefit interest)
       
    • check who you must pay the money to – it may be to the member or to us
    • pay the amount within 30 days of receiving the valid release authority
    • complete the release authority statement and send it to us within 30 days of paying the amount
    • send a copy of the release authority statement to the member within 30 days of paying the amount.

    What happens next

    When a fund releases an amount to the ATO, we will:

    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    See also:

    Compulsory release authority

    The Compulsory release authority for excess non-concessional contributions applies to 2012–13 and prior financial years.

    We will send an individual a compulsory release authority because we have issued them with an excess non-concessional contributions tax assessment. They must use the compulsory release authority to withdraw an amount from one or more of their funds equal to the amount of their excess non-concessional contributions tax. The individual may ask their super fund to pay the money to them or to us directly.

    How to action the release authority

    To action a Compulsory release authority:

    • check that it is still valid – the release authority is valid for 90 days, however a member must give it to you within 21 days of the date printed on it to avoid being subject to an administrative penalty (Note: You are still required to release money where the release authority is given after 21 days, but within 90 days of the date of the release authority.)
    • work out what amount you must release – you must pay the lesser of 
      • the amount of the excess contributions tax
      • the amount nominated by the member
      • the total value of the member’s super interests in your fund (other than a defined benefit interest)
       
    • check who you must pay the money to – it may be to the member or to us
    • pay the amount within 30 days of receiving the valid release authority
    • complete the release authority statement and send it to us within 30 days of paying the amount
    • send a copy of the release authority statement to the member within 30 days of paying the amount.

    What happens next

    When a fund releases an amount to the ATO, we will:

    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    See also:

    Division 293 tax – Due and payable release authority

    The Division 293 tax due and payable release authority – issued from 1 July 2018 – applies to 2012–13 and later financial years.

    When an individual has been assessed as having a Division 293 tax due and payable debt associated with contributions made to accumulation super accounts, this tax debt must be paid within 21 days after the individual receives the notice of assessment.

    The individual can elect to release an amount from their fund within 60 days of the issue date to pay the tax debt. We will issue a release authority to their nominated fund(s). The super fund must pay the monies directly to the ATO.

    How to action the release authority

    Within 20 business days from the issue date of the Division 293 tax due and payable release authority, you must:

    • pay the ATO the lesser of    
      • the amount stated on release authority
      • the total amount of the super lump sums that could be paid from the members super interests
       
    • send to the ATO a release authority statement which advises
      • the amount that was released to us
      • any amount that could not be released and the reason why it could not be released.
       

    What happens next

    When a fund releases an amount to the ATO, we will:

    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    Division 293 tax – Deferred debt account release authority

    The Division 293 tax deferred debt account release authority – issued from 1 July 2018 – applies to 2012–13 and later financial years.

    When an individual has been assessed as having a Division 293 tax debt associated with contributions made to a defined benefit account, the tax debt is deferred until the individual takes their end benefit from their defined benefit account, but can be pre-paid before that time.

    The individual can elect to release an amount from their fund within 60 days of the issue date to pay the tax debt. We will issue a release authority to their nominated fund(s). (A defined benefit fund may voluntarily comply with this version of the release authority). The super fund must pay the monies directly to the ATO.

    How to action the release authority

    Within 20 business days from the issue date of the Division 293 deferred debt account release authority, you must:

    • pay the ATO the lesser of   
      • the amount stated on release authority
      • the total amount of the super interests that could be paid from the member's super interests
       
    • send to the ATO a release authority statement which advises
      • the amount that was released to us
      • any amount that could not be released and the reason why it could not be released.
       

    What happens next

    When a fund releases an amount to the ATO, we will allocate the amount to the member's deferred debt account held by us.

    Division 293 tax – Debt account discharge liability release authority

    The Division 293 tax debt discharge liability release authority applies to 2012–13 and later financial years.

    When an individual is issued with a notice of debt account discharge liability, it shows the amount the ATO determines as the final amount owing on a deferred Division 293 debt account.  

    The individual can only present this release authority to the super fund that holds the defined benefit account to which the deferred debt is attributed. The super fund can only release the monies to the ATO if they are in a position to comply with the notice.

    How to action the release authority

    To action a Division 293 tax debt account discharge liability release authority:

    • check that the authority is still valid – it must be given to you within 120 days of the date printed on it
    • work out what amount you must release – you must pay the lesser of   
      • the amount of the Division 293 tax
      • the amount nominated by the member
      • the total value of the member's super interests in your fund (other than a defined benefit interest)
       
    • complete the release authority statement and send both the statement and payment to us within 30 days of receiving the valid release authority or a further period allowed by the Commissioner.

    What happens next

    When a fund releases an amount to the ATO, we will:

    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    First home super saver (FHSS) scheme release authority

    The FHSS release authority applies to 2018–19 and later financial years.

    A super fund will receive a FHSS release authority when one of its members successfully requests the ATO to issue a release authority under the scheme.

    The amount released by the fund must be paid to the ATO.

    How to action the release authority

    Within 10 business days from the issue date of the FHSS release authority, you must

    • pay to the ATO the lesser of   
      • the amount stated on release authority
      • the total amount of the super interests that could be paid from the member's super interests
       
    • send to the ATO a release authority statement which advises
      • the amount that was released to us
      • any amount that could not be released and the reason why it could not be released.
       

    Super funds must return the release authority statement in all cases, including for partial or nil payments.

    What happens next

    When a fund releases an amount to the ATO, we will:

    • withhold the appropriate amount of tax
    • offset the balance against any outstanding tax or other Australian Government debts
    • pay the remaining amount to the member.

    Tax treatment of release authorities

    The payment of a release authority is a super benefit – however, a super fund is not required to calculate either the tax-free component or the taxable component of the super benefit when the amount is released.

    A super fund is also not required to reduce either the tax-free component or the taxable component of the super interest at that time.

    The cashing order for benefits paid to satisfy a release authority is:

    1. unrestricted non-preserved benefits
    2. restricted non-preserved benefits
    3. preserved benefits.

    The amount paid is to be treated as a non-assessable, non-exempt benefit payment to the member.

    Last modified: 27 Feb 2019QC 20076