Eligible members may provide you with a form notifying you of their intention to claim an income tax deduction in their personal tax return for some or all of the personal contributions they made on their own behalf during a financial year.
Reporting claimed amounts
A personal contribution does not cease to be a personal contribution when the member notifies you of their intention to claim a deduction for that contribution with a notice under section 290-170 of the ITAA 1997.
Even though the income tax consequences have changed for the fund and for the member, you do not change how you categorise the contribution. You should continue to report the contribution as a member contribution at either the Personal contributions field or the Personal Injury election/Structured settlement field (if applicable).
While you will need to distinguish concessional and non-concessional personal contributions for other purposes (for relevant income tax obligations and for calculation of member taxable and tax-free components), you don't need to do so for reporting member transactions. As you may receive a notice of intent to deduct personal contributions long after the end of the financial year, it is often impossible for you to characterise the contribution at the time you report. Because of these timing difficulties, we will characterise reported personal contributions as either concessional or non-concessional, depending on whether we allow a deduction for those contributions when the member lodges their tax return.
Personal contributions should never be categorised as employer contributions, no matter how they are treated for income tax purposes by the member or by you.
If you report all concessional contributions as employer contributions, regardless of their actual nature, you are not complying with your legal obligations and risk incurring penalties. If personal contributions are incorrectly reported as employer contributions (or other types of contributions) your members may:
- miss out on co-contributions entitlements
- be treated incorrectly as having exceeded their concessional contributions cap
- not be assessed when they have exceeded the non-concessional cap.
Reporting of a notice of intent to claim a deduction
In addition to ensuring correct reporting of personal contributions amounts, you are required to notify us of certain details pertaining to a member's notice of intent that has been received and acknowledged as valid by you. These details, and the specifications regarding how they should be reported, are contained in the MATS Business Implementation Guide (BIG) (DOCX, 426KB)This link will download a file.