ATO Interpretative Decision
ATO ID 2002/457
Superannuation
Payments for surcharge liabilities-
This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is a payment made by a member to an unfunded defined benefits provider, for the purpose of reducing the debit balance of the member's surcharge debt account, deductible under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. A deduction is not available under section 290-150 of the ITAA 1997 for a payment made by a member for the purpose of reducing the debit balance of their surcharge debt account.
Facts
The member is a member of an unfunded defined benefits provider.
The member expects that on retirement they will be paid a pension.
The member received advice that the pension paid to them will be reduced to meet any outstanding superannuation surcharge liabilities.
The member wishes to make advance payments to meet future superannuation surcharge liabilities.
Reasons for Decision
Section 290-150 of the ITAA 1997 sets out the conditions to be met in order for a member to be able to claim a deduction for a superannuation contribution. Subsection 290-150(1) requires that the contribution is made for the purpose of providing superannuation benefits for the person (regardless of whether the benefits are payable to a SIS dependant if the person dies before or after becoming entitled to the benefits).
A payment made for the purpose of reducing the debit balance of the member's surcharge debt account does not satisfy this criterion. Instead, it is viewed as a payment made for the purpose of reducing an accumulated surcharge liability.
As an aside, section 26-60 of the Income Tax Assessment Act 1997 states that a deduction is not allowable in respect of a payment of a superannuation contributions surcharge liability.
Amendment History
| Date of amendment | Part | Comment |
|---|---|---|
| 14 February 2014 | All | Amended to reflect the re-write of the provision into the 1997 Act. |
Year of income: Year ending 30 June 2014
Legislative References:
Income Tax Assessment Act 1997
section 26-60
section 290-150
Keywords
Superannuation contributions
Superannuation contributions surcharge
Superannuation contributions - deductions & rebates
Defined benefits superannuation fund
Date reviewed: 7 August 2018
ISSN: 1445-2782
| Date: | Version: | |
| 30 November 2001 | Original statement | |
| You are here | 14 February 2014 | Updated statement |