• Release authorities

    A release authority is a document we give to an individual or their super fund. When your fund receives a valid release authority it is authorised to release an amount from the member’s super account according to the instructions in the release authority.

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

    You can complete the release authority statement that is included with the release authority or create a statement of your own, as long as it contains all the required information.

    There are seven types of release authority:

    See also:

    Refund of excess concessional contributions release authority

    For the 2011–12 and 2012–13 financial years, 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 the member 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    The refund of excess concessional contributions law has been repealed.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 the 2011–12 and 2012–13 financial years.

    To action the release authority:

    • 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 your 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.

    It is important when making a payment that you 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 provide false or misleading information.

    Voluntary release authority

    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. The individual may ask their super fund to pay the excess contributions to them or to us directly.

    From 1 July 2013, 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.

    To action the release authority:

    • check that the authority is still valid – it must be given to you within 90 days of the date printed on it
    • work out what amount you must release – you must pay the lesser of the:
      • amount of the excess contributions tax
      • amount nominated by the member
      • 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.

    See also:

    Compulsory release authority

    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.

    Compulsory release authorities may also be applicable to the 2013-14 financial years onwards if your member chooses to receive an excess non-concessional contributions tax assessment as part of the refund of excess non-concessional contributions measure.

    To action the release authority:

    • check that the authority is still valid – it must be given to you within 21 days of the date printed on it
    • work out what amount you must release – you must pay the lesser of the:
      • amount of the excess contributions tax
      • amount nominated by the member
      • 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.

    See also:

    Excess concessional contributions release authority

    From the 2013–14 financial year, a super fund will receive an excess concessional contributions release authority when one of its members has exceeded their concessional contributions cap and the member has elected to release the excess concessional contributions. The excess contributions will be assessed at the individual's marginal rate of tax.

    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.

    To action the release authority

    Within 7 days of the release authority being issued you must (unless you are a defined benefit fund or a non-complying super fund, or the member's super interest supports an income stream, in which case you may):

    • pay to the Commissioner 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
    • notify the Commissioner of either the payment or that you are not required to comply with the release authority.

    Excess non-concessional contributions release authority

    From the 2013–14 financial year, when a member exceeds their non-concessional contributions cap they will be given the option to elect to release their excess non-concessional contributions from their nominated super fund.

    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 from that fund.

    The released amount is to be treated as a benefit payment to the member and should be paid directly to the member.

    You don’t need to amend the contributions report you provided for this member in your SMSF annual return or member contributions statement. Releasing this benefit doesn’t change the contributions that led to the excess.

    To action the release authority

    Within 21 days of the release authority being issued you must (unless you are a defined benefit fund or a non-complying super fund, or the member's super interest supports an income stream, in which case you may):

    • pay to the member 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
    • notify the member of the amount paid
    • notify the Commissioner of the amount paid, or that you are not required to comply with the release authority.

    Commissioner's compulsory authority to release excess contributions tax and statement

    If we send an individual a compulsory release authority and they do not withdraw money equal to the amount of their excess non-concessional contributions tax from their fund, we may send their super fund a Commissioner's compulsory authority to release excess contributions tax and statement.

    The fund must pay the amount equal to their excess non-concessional contributions tax to us directly.

    A Commissioner’s compulsory authority to release excess contributions tax and statement may also be applicable to the 2013-14 financial years onwards if your member chooses to receive an excess non-concessional contributions tax assessment as part of the refund of excess non-concessional contributions measure and they do not withdraw money equal to the amount of their excess non-concessional contributions tax from their fund.

    To action the release authority:

    • work out what amount you must release – you must pay the lesser of:  
      • the amount of the excess contributions tax
      • the total value of the member’s super interests in your fund (other than a defined benefit interest)
    • pay the amount to us 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.

    See also:

    Release authority for Division 293 tax

    The release authority for Division 293 tax can be used to pay a Division 293 tax debt if the individual chooses to use it. There are three instances when an individual will receive one of these release authorities:

    • When an individual has been assessed as having a Division 293 tax debt associated with contributions made to accumulation super accounts.
      • These tax debts are due and payable debts and need to be paid within 21 days after the individual receives the notice of assessment. The individual can use the release authority and have the amount paid to either themselves or directly to the ATO.
    • When an individual has been assessed as having a Division 293 tax debt associated with contributions made to a defined benefit account.  
      • These tax debts are deferred until the individual takes their end benefit from the defined benefit account, but can be pre-paid before that time. The individual can use this release authority, presenting it to a super fund that can comply with the authority (a defined benefit fund cannot comply with this version of the release authority). If used, the super fund must pay the monies directly to the ATO.
    • When an individual is issued with a notice of debt account discharge liability, which is the amount the Commissioner determines as being 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.

    To action the 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)
    • check who you must pay the money to – it may be the member or 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.

    Commissioner’s release authority for Division 293 tax

    If an individual has a Division 293 due and payable debt that has not been paid for more than 120 days, we may issue this release authority to a super fund which we know holds an account for the individual. The release authority will ask the fund to release the amount to pay the debt on behalf of the individual.

    To action the release authority:

    • work out what amount you must release – you must pay the lesser of:
      • the amount of the Division 293 tax
      • the total value of the member's super interests in your fund (other than a defined benefit interest)
    • pay the amount to us 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.

    Taxation 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. to unrestricted non-preserved benefits
    2. to restricted non-preserved benefits
    3. to preserved benefits.
    Last modified: 10 Nov 2015QC 20076