Objection to discretion decision
The AAT (in August 2010) and Federal Court (in March 2011) handed down decisions about ECT. These decisions affect individuals and ATO administration of the ECT legislation.
Technically, the decision by the Full Federal Court deals with the jurisdiction of the AAT. However, in practice, the outcome of the McMennemin case (the case the AAT decision relates to) is that individuals who made applications for the exercise of the Commissioner's discretion to disregard or reallocate contributions before 17 November 2010 have no formal objection rights, and no AAT merits based review of that decision.
Judicial review is available however it is limited (broadly) to review by the Courts (not including the AAT) on administrative law grounds. This type of review is not merits based and will typically be substantially more expensive than the process offered by the AAT.
The legislation has since been amended and subsection 292-465(9) has been inserted into the ITAA 1997. This amendment clarifies that the discretion decision must be treated as part of the assessment process, which means that it is subject to formal objection rights and review by the AAT.
This amendment was inserted with effect from 17 November 2010 and therefore applies to all applications for the exercise of the discretion made on or after 17 November 2010.
Before 17 November 2010
If a person applies for the application of the Commissioner's discretion and that request is disallowed, the individual cannot object to that discretion decision.
Furthermore, the person cannot request a merits-based review through the AAT but can request a judicial review through the Courts.
On or after 17 November 2010
If a person applies for the application of the Commissioner's discretion and that request is disallowed, the individual can object to that discretion decision.
If the objection is upheld, the person can apply to the AAT for a merit based review of that decision.