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  • Reporting and administrative obligations for the transfer balance cap

    APRA-regulated super funds and life insurance companies have new reporting obligations from 1 July 2017. This is due to the new transfer balance cap measure and events-based reporting framework.

    The transfer balance account report (TBAR) is used to capture information about super amounts moving into and out of retirement phase accounts for both transfer balance cap and total super balance purposes.

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    APRA-regulated fund and life insurance company reporting

    APRA-regulated super funds need to capture data for the TBAR from 1 July 2017. The first TBAR for each member was due for lodgment by 14 December 2017.

    Once you start reporting, you need to lodge a TBAR within 10 business days after the end of the month in which a transfer balance account event occurred.

    For example, if you need to report an income stream that started on 2 January 2018, you must lodge this report to us by 14 February 2018.

    We may issue a commutation authority to super providers where a member has exceeded their transfer balance cap.

    Providers must action the commutation authority and report to us using the TBAR within 60 days of the notice issue date.

    Consequences of late reporting

    Once you start reporting, lodge the TBAR with us as soon as practicable after the event has occurred to ensure your member’s transfer balance account is updated.

    If you do not lodge the report by the required date, your member’s transfer balance account will be adversely affected and they may be penalised. You may also be subject to compliance action and penalties.

    Some exclusions from TBAR reporting

    Only certain events that affect a member's transfer balance account or total super balance need to be reported in a TBAR.

    Events that do not need to be reported include:

    • pension payments
    • investment earnings and losses
    • when an income stream is closed because the interest has been exhausted
    • information that individuals report to us directly using a Transfer balance event notification form (NAT 74919). Typically, this is when the following events occur  
      • family law payment split
      • debit event from fraud, dishonesty, or bankruptcy
      • structured settlement contributions made before 1 July 2007.

    Reporting channels and lodgment

    You can report information to us by:

    1. submitting a data file through the Business Portal or Tax Agent Portal. This is known as bulk data exchange. Refer to the electronic reporting specificationsExternal Link for information on developing software for electronic TBAR lodgment
    2. mailing a paper report. Go to this page to download and print the TBAR form
    3. lodging electronically through ATO online services.

    You can report multiple events in a TBAR when lodging a paper form or via ATO online services.

    If you are lodging a data file using the Business Portal or Tax Agent Portal, multiple member data records can be lodged in each file (data set).

    A super provider must have a current ABN to use an electronic reporting channel. Our electronic reporting channels are the most efficient method of TBAR lodgment, and they will automatically route reports to the correct processing area.

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    Amending an incorrect report

    Where information submitted on the original report needs to be amended or the information supplied is incorrect, the original event will need to be cancelled before a new TBAR is lodged with the correct information.

    All the information previously supplied for that event will need to be resubmitted on a new TBAR with a cancellation indicator selected. This is required so we can identify the event that has been lodged in error.

    If required, you can lodge a new TBAR with the correct information once the report to cancel the incorrect information has been submitted.

    The instructions specific to the lodgment channel used by the provider contain further information on how to amend an incorrect TBAR.

    Commutation authorities

    We may issue a commutation authority to super providers where a member has exceeded their transfer balance cap. The commutation authority will detail the amount that must be commuted from a specified income stream for that member. Providers must action the commutation authority and report to us using the TBAR within 60 days that they have:

    • complied with the commutation authority by commuting the full amount stated in the notice, or
    • complied with the commutation authority by commuting the income stream as much as possible – even if this is less that the amount in the commutation authority, or
    • not complied with the commutation authority because  
      • the maximum release amount is nil, or
      • the member is deceased, or
      • we issued the commutation authority in relation to a non-commutable capped defined benefit income stream.

    If you do not commute the required amount by the due date or tell us why you have not done so (using a TBAR), the income stream will stop being in the retirement phase and this will affect entitlement to exempt current pension income. You may also be liable for penalties or subject to compliance action.

    There is also an administrative penalty if you do not notify your member of your response to the commutation authority within 60 days of the issue of the commutation authority.

    Commuting the amount

    Where you can commute the amount, you should make reasonable efforts to contact the member and discuss their options. For example, whether to retain the commuted amount in an accumulation account or take it as a lump sum. If you cannot contact the member, you should commute the amount in a way that you judge to be in the member's best interests.

    By the due date stated in the commutation authority, you should commute the lesser of:

    • the amount to commute identified in the commutation authority
    • the maximum available release amount.

    You should also send us a transfer balance account report with the commutation's details by the due date.

    You must also notify your member that there is no standard tax form for providing the required information. You can use your own business processes to comply and you will meet the approved form requirements, so long as you include the following details in the correspondence you send to your member:

    • the member's details
    • name
    • details from the commutation authority
    • issue date
    • due date
    • income stream account number
    • unique superannuation identifier (if applicable)
    • member client identifier (if applicable)
    • the amount to commute.
    • details of the lump sum commuted (where a lump sum was paid in accordance with a commutation authority)
    • the amount
    • the date it was paid.

    You must also declare on the correspondence that the information it contains is 'true and correct', and sign it.

    Not commuting the amount

    Where you do not commute the amount, you should send us a TBAR by the due date, indicating one of the following reasons:

    • the income stream is a capped defined benefit income stream
    • the member is deceased
    • the maximum available release amount is nil.

    Where you did not comply because the income stream is a capped defined benefit income stream, you must notify your member of your choice not to commute the amount. Although it is not legally required, it may be good practice to also advise your member of the reason you were unable to comply.

    Where you did not comply with the commutation authority because the maximum available release amount is nil or the member is deceased, you are not required to notify the member (or their estate) of this. However, it may be good practice to advise this outcome to your member.

    See also:

    Last modified: 10 May 2018QC 54147