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DASP

Kirstymonington — Thu, 27 Feb 2020 21:19:10 GMT

Hi Chris
Thanks for answering my question however I’m still a little confused.
I chose the cheque option for my DASP as I no longer have an Australian bank account however I am still waiting for this. I have received a PAYG payment summary document but no cheque. Does this arrive separately?

Thanks
Kirsty

Payment of Super in wrong year

Helpneeded — Thu, 27 Feb 2020 09:31:30 GMT

Hi, my former company paid me no super during the financial year 2018/19, but did end up paying what was owed in a lump sum at the end of 2019.
But this means I have 2 years worth of super to be paid during 2019/20, and as a result I will go over the $25K threshold for the year, when I normally do not.
What is the implication of this and is there anyway I can have the lump sum attributed to the year in which I earned it.
Thanks
Steve

Re: Untaxed Superannuation Funds

BrendonBeh — Thu, 27 Feb 2020 05:54:14 GMT

I might also add that one interesting anomoly here is that members of untaxed funds do not have a choice in electing to pay their 15% tax owing on contributions and earnings prior to being subject to application of the untaxed plan cap. If they had this ability then the taxation of excess balances pursuant to the untaxed plan capwould be a lot fairer. For instance - before exiting a fund today a member with an untaxed balance of $1.7M could pay the $255K tax owing to reduce their balance below the cap limit. Instead as it stands today , as I understand the rules - the same member would effectively be liable to pay tax of $310,500K. Is there a policy reason why this is the case?

Re: SMSF

ChrisR — Thu, 27 Feb 2020 05:35:22 GMT

Thanks for your post.

is correct if that is what you mean by your questions. If you are asking whether your SMSF can lend money to you so that you can purchase a property, there are restrictions on that.

You can't lend money or provide direct or indirect financial assistance from your fund to a member, or a member’s relative. For more information about that, have a look at the SMSF loans and early access page on our website.

Any super contributions that your employer pays for you need to be directed to your SMSF account. Your employer can't pay them to you directly. If you have legitimately lent money to your SMSF, your fund can use those contributions to repay you in accordance with the terms and conditions of the loan arrangement.

As has said, consider appointing professionals to help you with these types of investments.

Hope this helps.

Thanks,

ChrisR

Re: Untaxed Superannuation Funds

BrendonBeh — Thu, 27 Feb 2020 05:25:28 GMT

Thankyou again Seb. Is there anyone at the ATO who can confirm that the untaxed plan cap rules definitely apply to tax payable up-front from both lump sum payments and the commencement of income streams from constitutionally protected (untaxed) funds? I'm interested to know and understand the policy reasoning for the seemingly harsh treatment of excess balances above cap limits for these untaxed funds which ultimately aim to give bigger growth and balances over time through delayed payment of tax on contributions and earnings, whilst applying a cap threshold below that applying to ordinary transfer balances.

Re: OnePath Plus

ChrisR — Thu, 27 Feb 2020 02:54:36 GMT

Thanks for your question.

If you are referring to OnePath Masterfund, they merged with IOOF's Retirement Portfolio Service last year. In turn you will need to update the ABN. You may also need to update the USI but you should check that with your employee.

You can find the ABN on the Super Fund Lookup by searching for Retirement Portfolio Service. You will see that there are a number of USIs listed hence why you should ask your employee which one you should use.

For more information about the Small Business Superannuation Clearing House, check out our website.

Hope this helps.

Thanks,

ChrisR

Re: Untaxed Superannuation Funds

SebReiter — Thu, 27 Feb 2020 02:52:30 GMT

Hi again

Oh, ok. An untaxed defined contribution scheme. One of the constitutionally protected funds. I haven't looked at these that closely before.

I assume your understanding of the tax treatment is correct - ie that the tax is payable up-front, even if you choose to start up an income stream from the fund.

The difference between how this works and how the Transfer Balance Cap works is that in your situation the tax is payable at the top marginal rate on the excess. Whereas for the Transfer Balance Cap, an earnings amount is calculated on the excess, and the earnings amount is taxed at 15%. The excess and the earnings must then be moved back out of the pension phase.

Let's say your untaxed amount is $100,000 above the untaxed plan cap. You'll pay tax at 45%, so $45,000 on this $100,000.

Compare this to an excess transfer balance amount of $100,000. For calculation purposes let's say this is made up of $90,000 that exceeded the $1.6m cap, plus $10,000 of earnings calculated on this excess amount. The $100,000 will need to be commuted - ie moved back out of the pension phase. Tax is then payable on the $10,000 earnings amount at 15%, so $1,500 tax. Basically, the excess amount shouldn't have been in pension phase, the earnings on the excess shouldn't have received the 0% concessional rate that applies to pension phase accounts and should have instead been taxed at 15%. So the outcome is trying to replicate the outcome that would have occurred if the excess hadn't happened.

So, very different outcome between the two. They're not trying to be equivalent policies, apart from trying to limit the overall concessional tax treatment that an individual can receive from the superannuation environment.

I'm an ATO employee voluntarily providing my time here

Re: Release of funds and contract dates

ChrisR — Thu, 27 Feb 2020 02:28:12 GMT

We are still looking into this one for you and will get back to you as soon as we can.

Thanks,

ChrisR

Re: FHSSS - using funds

ChrisR — Thu, 27 Feb 2020 02:25:07 GMT

Thanks for your question.

After you have submitted your FHSS release request, it can take between 15 and 25 business for us to pay the balance of your released amount to you.

For more information about receiving your amount, have a look at the FHSS scheme page our website.

The fact that you appear to have a SMSF and have likely sent the requested amount to us as quickly as possible should theoretically speed up the process.

It is important to note that we also require time to withhold the appropriate tax and check for any outstanding Commonwealth debts that the amount needs to be offset against before we pay the remaining amount to you.

Hope this helps.

Thanks,

ChrisR

Re: Super paid directly to fund after an SG Charge statement lodged

Snappysam — Thu, 27 Feb 2020 01:15:58 GMT

Hi Chris,

Could I please ask, what if the same situation has occurred but the fund won't refund the money and there is no option to carry it forward as the business was sold. How can you get the ATO to acknowledge that the super has been paid?

According to there statement the super is still outstanding, but it was just paid to the funds direct instead of through the ATO.

Thanks, Sam

Re: Downsizer super contribution

Glenn4802 — Thu, 27 Feb 2020 00:47:01 GMT

As Bruce4Tax has advised, the exchange of the sale contract needs to have happened on or after 1 July 2018. This exchange of contract is the time when both parties sign the sale agreement and typically at or before the time when the deposit is paid. In nearly all cases htis is before the settlement day. So if the contract was signed by both parties in June 2018 (or earlier), with settlement in July 2019 the seller would not be eligible for downsizer contribution.

Re: DASP

ChrisR — Thu, 27 Feb 2020 00:28:32 GMT

Thanks for your post.

This is something that is frequently asked in our Community. You can find the answer to your first and third questions in the following thread: Claiming DASP as former permanent resident

Regarding your second question, if you are eligible for a DASP it will be taxed in accordance with the applicable DASP tax rates. You can find out more about how DASP is taxed on our website.

Assuming that you haven't held a working holiday maker (WHM) visa (the visas that you have mentioned aren't WHM visas), the DASP ordinary tax rates will apply. You can check out the DASP for working holiday makers page for more information.

Hope this helps.

Thanks,

ChrisR

Re: First Home Super Saver - Calculation and Withdrawal Amount

Shikhar — Wed, 26 Feb 2020 23:58:04 GMT

Thank you Chris for a perfect and well explained reply.

I have cleared all my doubts around how the scheme works.

I just have one hestiation in order to derive the actual amount I will be saving:

1) I will be paying 15% tax on my suber contributiuon ( which is understood)

2) and i will be blocking another 15% at the time of withdrawal (Because my contributions are concessional I can only withdraw 85%) .

I understand that I am not loosing money on the 15% blocked into super (2) and I will access that money on retirement. But from a first home saving prepsective I am loosing my 30% (1) plus (2) in order to get a 30% tax offset benefit at the time of withdrawal.

Am I missing something here or it doesn't make sense to go through all the hurdle in order to get barely neglegible benefit. ( I am just trying to understand the benefit I will get out of the scheme).

Your thoughts please ?

Thanks!

Shikhar

Re: First Home Super Saver - Calculation and Withdrawal Amount

ChrisR — Wed, 26 Feb 2020 23:30:21 GMT

Thanks for your questions. To make it easier, we will answer them one at a time.

1. How much will we be able to save?

The FHSS scheme allows you to save money for your first home inside your super fund. You are able to take advantage of a higher rate of earnings and for those who salary sacrifice or claim a deduction, a reduced rate of tax.

A good way of looking at how much you and your wife can save is to combine your after tax FHSS release amounts with the tax credits that you will be entitled to due to claiming tax deductions for your contributions.

The following example combines your 2019-20 and 2020-21 contributions together and assumes a 37% marginal tax rate for both of you. Refer to the individual income tax rates page on our website for more information.

Total tax withheld by super funds after receiving notice of intents: $9,000 ($60,000 x 15%)
Total tax payable on assessable FHSS released amounts (excluding associated earnings): $5,400 ($60,000 x 37% plus Medicare levy minus 30% offset)
Total tax credits due to personal contribution deductions: $23,400 ($60,000 x 37% plus Medicare levy)
Total amount saved: $69,000 ($60,000 minus $9000 (1) minus $5,400 (2) plus $23,400 (3))

The associated earnings amount is harder to demonstrate because it will depend on what months you and your wife make your voluntary contributions and when you both submit your FHSS determination requests. The longer your contributions remain in your funds, the more you will earn.

When you submit your FHSS determination request, we will calculate the associated earnings using a deemed rate of return – this is based on the 90-day Bank Bill rate plus three percentage points. You can view these rates by checking out the shortfall interest charge (SIC) rates page.

Whatever the associated earnings amount ends up being, based on a marginal tax rate of 37%, it will be reduced by 9% (37% plus Medicare levy minus 30% offset) as it forms part of your assessable FHSS release amount.

2. Will the voluntary contributions be concessional or non-concessional?

They will be classed as concessional contributions due to the fact that you are both claiming personal contribution tax deductions. You can find out more about concessional contributions on our website.

3. How much will we be able to withdraw from our super funds?

You will be able to withdraw 85% of the concessional contributions plus associated earnings. You can also withdraw 100% of non-concessional contributions but that doesn't apply to your scenario.

4. Can we use the FHSS scheme to purchase land?

No. If you purchase vacant land to build a home on, it is the contract to construct your home that must be entered into to meet the FHSS scheme requirements. You can also use the scheme to purchase a home. Have a look at the after your savings have been released section of the FHSS scheme page for more information.

5. Are we missing anything that can increase the benefit of using the FHSS scheme?

As mentioned previously, the longer you leave your contributions in your super fund, the more your associated earnings will be. Also, if you would like your voluntary contributions to be classed as concessional contributions, another way of achieving that is via salary sacrifice arrangements with your employers (if applicable).

We recommend that you have a really good read of the first home super saver scheme page before you make a voluntary contribution, sign a contract or submit a FHSS determination or release request.

Hope this helps.

Thanks,

ChrisR

Re: Downsizer super contribution

Bruce4Tax — Wed, 26 Feb 2020 22:10:59 GMT

We settled on the sale of our property on 4th July 2018. I assume we meet the date restriction for allowing fir a 'downsizer' super contribution? Is that correct?

Yes, but you need to meet all the conditions below.

This means that the super fund needed to receive the contribution, and the downsizer form, no later then 04/07/2018 + 90 days.

From ATO:

Eligibility for the downsizer measure

You will be eligible to make a downsizer contribution to super if you can answer yes to all of the following:

you are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit)
the amount you are contributing is from the proceeds of selling your home where the contract of sale exchanged on or after 1 July 2018
your home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale
your home is in Australia and is not a caravan, houseboat or other mobile home
the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset
you have provided your super fund with the Downsizer contribution into super form either before or at the time of making your downsizer contribution
you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement
you have not previously made a downsizer contribution to your super from the sale of another home.

Note: If your home that was sold was only owned by one spouse, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.

Re: FHSS and Tax

cms — Wed, 26 Feb 2020 19:53:12 GMT

Hi ChrisR

Thanks for clarifying regarding tax on assessable amount.

Your explanation indicates the 20% FHSS rate is a penalty applied if not used to buy first home or nor recontributed.

Have amended 2019 tax return to include assessable amount.

Thanks again.

Downsizer super contribution

Kneewall49 — Wed, 26 Feb 2020 07:29:40 GMT

We settled on the sale of our property on 4th July 2018. I assume we meet the date restriction for allowing fir a 'downsizer' super contribution? Is that correct?

thanks

Re: Untaxed Superannuation Funds

BrendonBeh — Wed, 26 Feb 2020 06:44:10 GMT

Thanks Glenn much appreciated. I'll use that as a rough guide and await the published figure in due course.

Re: Untaxed Superannuation Funds

Glenn4802 — Wed, 26 Feb 2020 06:33:35 GMT

The cap for the 2020-21 year is likely to be $1,565,000. This amount was calculated using the AWOTE figure published last week and it not official.

Re: Is superannuation payable on time in lieu?

ChrisR — Wed, 26 Feb 2020 06:06:52 GMT

Thanks for your post.

A good way of looking at it is to determine whether SG would have been payable had the employees been paid for the weekend work (example one) or excess time (example two) instead of accruing TOIL.

If the weekend work and excess time was paid at normal rates (not overtime) then it sounds like it is OTE. SG is payable on payments that are considered OTE. In turn, SG would be payable on the resulting TOIL payment.

Hope this helps.

Thanks,

ChrisR

Re: Untaxed Superannuation Funds

BrendonBeh — Wed, 26 Feb 2020 06:03:20 GMT

Hi Seb, thanks so much for your reply, and I appreciate your time as an ATO employee responding. Although it wasnt clear from my question, the untaxed fund I am a member of is actually a defined contribution (DC) scheme, not a DB scheme. And my understanding of the effect of the untaxed plan cap legislation applying in this case is that once I exit my untaxed accumulation fund, regardless of whether I take my benefit as a lump sum or commute it into a income stream in pension mode. As soon as I exit the untaxed accumulation scheme I must pay tax at the highest marginal rate plus medicare levy for any amount over the untaxed plan cap (as I understand occurs with taxed accumulation funds for balances exceeding $1.6M) . I'm not an expert, and I may be missing something obvious, but to my mind the untaxed plan cap works to the same effect an the transfer balance cap in this case. Is this correct? Thanks again for your assistance.

Re: Gold Bullions in SMSF

Bruce4Tax — Wed, 26 Feb 2020 04:43:36 GMT

With the valuations however at year end 30 June. Is a confirmation from the trustees sufficient if they confirm no changes in value from prior year financials?

The price of gold changes every day, so there will be a change in value.

Also is it okay for the trustees to store the bullions at their own personal home?

This would call into question whether the trustees are fulfilling their responsibilty to act prudently - the fund is exposed to loss if the the gold is stolen. Prudent trustees would hold their gold bullion with one of the companies that buy, sell and hold gold.

Then there is the issue of how the auditor can establish that the gold exists, and is properly valued. The auditor would have to inspect the gold on 30 June each year, if you can find one who is prepared to do that. There is no assurance that the gold is there on the day before and the day after.

SMSF member receiving warning about changes to their reocrds

matthewk — Wed, 26 Feb 2020 03:45:59 GMT

Our SMSF clients have started receiving the following message that provides so little information but has caused alarm for the clients. As a result they call us worried or angry that we or somebody has been making changes to their SMSF without their permission. The email message doesn't tell the SMSF member what has changed or what form has triggered the change. We now have to spend time guessing which of the following might have changed and then report back to the SMSF.

* financial institution account details
* electronic service address (ESA)
* authorised contact
* members.

So far all we can determine is the tax return has been lodged with bank details (not changed) and members balances (not new memebrs).

Why can't the ATO be more informative in their warning messages. They know exactly why they triggered the message. The populated the client name & SMSF details. Why not the reason?

Re: Untaxed Superannuation Funds

SebReiter — Wed, 26 Feb 2020 03:28:23 GMT

Hi BrendonBeh

1. I assume the untaxed plan cap amount website content is updated as soon as possible once we know what the rate for 2020-21 will be.

2. No, the untaxed plan cap isn't trying to be an equivalent policy to the Transfer Balance Cap. The transfer balance cap is about limiting the concessional treatment for super income streams - placing a limit on the ability of individuals to move money into the retirement phase and therefore be eligible for the 0% tax rate applying to earnings on assets underlying the income stream account. For defined benefit members (whether these are fully funded, partially funded, or unfunded defined benefit schemes), there are additional tax outcomes that take effect where the DB pension they're receiving exceeds $100,000 per year. These additional tax outcomes are intended to broadly mimic the Transfer Balance Cap outcomes that apply to members of accumulation funds.

The untaxed plan cap was in place long before the Transfer Balance Cap came along. It applies to the untaxed element taken as a lump sum, paid from a defined benefit account. So it's a lump sum tax as opposed to an income stream tax.

3. They're different policies. And depending on the specific DB scheme, the untaxed element could be nil, or all of the DB interest, or somewhere in between. So someone could have a DB lump sum of $2.5m paid, but the untaxed element is $1.5m, and therefore the additional tax doesn't apply as the untaxed element doesn't exceed the untaxed plan cap.

And no, there are no compounding effects for untaxed amounts in DB funds. They're untaxed because the money hasn't actually been paid anywhere, hasn't been invested anywhere on behalf of members. It's an amount that the employer (usually a State government or the Commonwealth government) is obliged to pay when a member becomes entitled to receive a benefit payment. The amount is then paid from government revenues.

As a general statement, it's not possible to design super policies that have the same impact on DB members as they do on Accumulation fund members. The DB rules are too diverse, there are too many variables in play, in DB schemes it's not clear what someone will receive until they actually leave the scheme - it's actuarial tables and maths to try to estimate what the annual accrual is in a DB scheme. But when introducing new super policies attempts are made to have broadly equivalent outcomes for members of both types of schemes.

I'm an ATO employee voluntarily providing my time here

Re: FHSS Scheme contributions, tax and timeframes

ChrisR — Wed, 26 Feb 2020 03:16:43 GMT

Thanks for your post.

The 20% FHSS tax only applies in specific situations. It is an additional tax above and beyond the tax that is applied to the assessable FHSS released amount when you lodge your tax return.

Most people won't have to pay the extra 20% FHSS tax however everyone that receives an assessable FHSS released amount will need to declare it on their tax return.

Based on what you have advised in this thread and your other thread (FHSS and Tax), it doesn't sound like you will be liable for the 20% FHSS tax but you will still need to declare the assessable FHSS released amount in your 2019 tax return.

The tax that you will need to pay will be whatever your marginal tax rate is plus Medicare levy minus the 30% offset. It is likely that this tax has already been withheld. Refer to the payment summary that we issued to you.

For more information about how the first home super saver scheme works, refer to our website.

Hope this helps.

Thanks,

ChrisR

Re: FHSS and Tax

ChrisR — Wed, 26 Feb 2020 02:55:15 GMT

Thanks for your post.

After you have submitted a FHSS release request, a payment summary will be sent to you detailing the assessable FHSS release amount as well as any tax that was withheld.

Even though you received the FHSS released amount in July 2019, because the request was submitted in June 2019, the assessable FHSS release amount needs to be included in your 2019 tax return.

For more information about what you need to do after receiving your amount, check out the first home super saver scheme page on our website.

If you didn't include the assessable FHSS release amount in your original 2019 tax return lodgment, you will need to submit an amendment. The amendment requests page explains how you can do that.

It is great that you have notified us of your home purchase as that is part of your FHSS scheme notification requirements. Recontributing the assessable FHSS release amount back into your super fund is also within the rules, however it doesn't change your tax return requirements.

Regardless of what you choose to do with the released amount, you are still required to declare the assessable FHSS release amount in your 2019 tax return.

Hope this helps.

Thanks,

ChrisR

Untaxed Superannuation Funds

BrendonBeh — Wed, 26 Feb 2020 02:48:22 GMT

1. The ATO website suggests the untaxed plan cap for the forthcoming fiscal year will be published in Feb. Can you advise what this cap will be for 2020.

2. Am I correct that the untaxed plan cap operates for members of untaxed funds is effectively the same as how the transfer balance cap of $1.6m applies to taxed funds? Another way of putting this - the $1.6m transfer balance cap does not apply to members of untaxed funds because they have a lower cap (the untaxed plan cap) for which their excess contributions will assessed for tax treatment.

3. If the answer to question 2 is yes (re the operating effects of the caps) - what is the policy behind untaxed plans having a cap lower than that for untaxed funds? Members of untaxed funds are more likely to have larger balances at retirement age due to the compounding effects of not paying tax over periods of time? Given this shouldnt the untaxed plan cap be greater than, not below the $1.6m balance cap?

Gold Bullions in SMSF

Jen1 — Wed, 26 Feb 2020 01:55:10 GMT

Hey everyone,

I am just wondering, if a member of the fund invests in gold bullion, as it doesn't fall under the collectables rules, it does not need to be insured. With the valuations however at year end 30 June. Is a confirmation from the trustees sufficient if they confirm no changes in value from prior year financials? Also is it okay for the trustees to store the bullions at their own personal home?

Re: Superannuation for Terminated Employee

SebReiter — Tue, 25 Feb 2020 23:08:06 GMT

Hi cshallueato

I'm not clear on the situation. Where is the money coming back from?

If the employee is entitled to SG contributions, they need to be paid into a super account for that employee by the SG due date. If the employee has exercised choice of fund and advised the employer of where they'd like the super to be paid, that's where the payment should be made. If the employee hasn't exercised choice of fund the payment should be made to the default fund of the employer.

If for some reason the employee's account with the default fund has been closed, the default fund needs to open up a new account to accept this payment.

I'm an ATO employee voluntarily providing my time here

Re: FHSS Scheme contributions, tax and timeframes

cms — Tue, 25 Feb 2020 22:51:15 GMT

"Your options if you don’t sign a contract in the required time frame. This is 12 months from when your first FHSS amount was released to you or your extended time frame if you’ve been granted an extension. If you don’t sign a contract in this time you'll need to re-contribute the assessable FHSS amount back into your super fund or pay the FHSS tax."

signed a contract in the required time.
Paid back Assessable FHSS Amount into my Super fund within 8 months FHSS release.
Therefore NO FHSS TAX? No Need to report Assessable amount?

Re: FHSS and Tax

cms — Tue, 25 Feb 2020 22:38:49 GMT

Called ATO with same question. Was Transferred 3 times - Super to FHSS to Tax - no one was Trained on FHSS. The call lasted 2 hours.

Superannuation for Terminated Employee

cshallueato — Tue, 25 Feb 2020 22:29:45 GMT

What do you do with returned superannuation from a terminated employee. The employee has been contacted three times by email and twice by a telephone call and still wont provide his current superannuation fund information so payment can be made. What do you do with the returned funds?

Re: FHSS "as soon as practicable after purchase"

ChrisR — Tue, 25 Feb 2020 08:08:44 GMT

Thanks for your question.

If you purchase a property that is currently tenanted, unless your tenant is happy to vacate early, you won't be able to move in until at least December this year. In turn, it wouldn't be practicable to move in sooner than that.

For more information about your requirements after your savings have been released, check out our website.

If you were to move in to the property in January next year, it would be shortly after your tenant has vacated. This would meet the first requirement.

Assuming that you then live in it for at least the next six months, the second requirement would also be met.

It is important to note that the clock doesn't start ticking from the contract date or the settlement date. This requirement is measured from when the property is able to be occupied by the owner.

This ensures that purchasers aren't disadvantaged by situations like this one. It also ensures that if you are signing a contract to construct a home, you don't have to rush the construction so that you can move in by a certain date.

Hope this helps.

Thanks,

ChrisR

Re: DASP

ChrisR — Tue, 25 Feb 2020 07:40:53 GMT

Thanks for your post.

A DASP can be paid electronically or via cheque. How yours was (or will be) paid depends on what you selected in your DASP application as well as who was holding your super money.

There are three possible payment options:

electronic funds transfer (EFT) to an Australian bank account
cheque
international money transfer (IMT) – for fund applications only.

If we held your super money, we will only pay your DASP to you via EFT to an Australian bank account or cheque. Super funds can also use IMT but whether they offer that option depends on the fund.

For more information about how and when DASP is paid, you can check out our website.

If you can't recall the option you chose, you may need to get in touch with either your super fund or us depending on who was holding your super money. Refer to our website about how you can contact us about your DASP.

Hope this helps.

Thanks,

ChrisR

Re: unpaid super

ChrisR — Tue, 25 Feb 2020 05:29:35 GMT

Thanks for your post.

If we haven't advised you that your unpaid super enquiry has been closed, it sounds like the debt collection process is still ongoing. While we try to collect unpaid super as quickly as possible, some cases take longer than others.

For more information about our process when investigating your enquiry, have a look at our website.

Depending on how recently we forwarded your employer's late super payments to your super fund, we may not have formally advised you yet. We deliberately delay issuing a payment confirmation letter to provide your fund time to process it. You should receive something from us soon.

If your former employer goes into liquidation, depending on the circumstances we may still be able to retrieve your unpaid super. We will also formally let you know if that happens.

There are also other ways to claim your unpaid super that you can explore. Our website explains that further.

Hope this helps.

Thanks,

ChrisR

FHSS and Tax

cms — Tue, 25 Feb 2020 02:28:04 GMT

Requested FHSS withdrawal June 26, 2019 - 2019 Tax Year. Received July 2019 - 2020 Tax Year. Purchased first home and Notified ATO. Also Salary Sacrificed the entire Assessable Amount back into Super Account.

Recently discovered letter in My Gov Messages from ATO stating I must include Assessable Amount on 2019 Tax Return.

Should I amend my 2019 tax to include Assessable amounts of FHSS even though I provided notifications AND repaid the amount?

Thanks for your guidance.

Re: SMSF

Bruce4Tax — Tue, 25 Feb 2020 01:47:02 GMT

Can I lend my SMSF money to enable me to purchase a property?

Do you mean "Can I lend my SMSF money to enable the SMSF to purchase a property? "

If so, then Yes, in theory - but harder in practice because the SMSF needs to comply with the LRBA rules.

https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/SMSF-technical/Limited-recourse-borrowing-arrangements---questions-and-answers/

Can my employer pay me my super contributions to repay that loan?

In theory, Yes - but there caps for concessional contributions. Also, employers do not always want to do salary sacrifice contributions.

For anything to do with LRBA arrangements, you need to get specialist advice before trying to do it yourself.

Re: Claiming your superannuation after leaving Australia as a temporary resident.

ChrisR — Tue, 25 Feb 2020 01:41:44 GMT

Thanks for your question.

Claiming a DASP will not affect any future visa applications. If you have any questions about your current or future immigration status, or visa, we suggest that you get in touch with the Department of Home Affairs.

Check out the departing Australia superannuation payment section of our website for more information about returning to Australia later on a new visa and how to get in touch with Home Affairs.

Hope this helps.

Thanks,

ChrisR

SMSF

Janfra — Tue, 25 Feb 2020 01:12:23 GMT

Can I lend my SMSF money to enable me to purchase a property? Can my employer pay me my super contributions to repay that loan?

Re: Listed shares as contributions

Bruce4Tax — Tue, 25 Feb 2020 00:25:02 GMT

Have listed shares outside of smsf on ASX value circa $100k with significant cgt payable if sold but have held for longer than 12mths.

If you transfer in the shares as an in specie contribution, then you can claim a deduction of up to $ 25,000 - depending on whether you have any other concessional contributions. But, only a benefit if it will reduce personal tax by more than the the 15% contributions tax payable by the fund.

Would need to know the exact numbers to be any more specific.

Re: Super

macfanboy — Tue, 25 Feb 2020 00:18:54 GMT

Great response, you should keep that as a macro.

But don't forget the letter of intent.

Listed shares as contributions

Gmcg — Tue, 25 Feb 2020 00:04:55 GMT

Hello

Just looking for some guidance...

Age 60 and not retired (self employed- low income) with a smsf balance circa $600k.

Have listed shares outside of smsf on ASX value circa $100k with significant cgt payable if sold but have held for longer than 12mths.

I'm looking to transfer said shares directly into smsf (if possible) and to obviously minimise tax payable in the process.

Looking for options here if anyone can help.

With thanks

Graeme

Re: SG on purchased leave?

TaxedoMask — Mon, 24 Feb 2020 23:55:04 GMT

They pay you SG on the reduced amount.

However when they pay out the annual leave, it should be treated as OTE (at least last time I checked) and so net, it's the same.

Re: Super

SebReiter — Mon, 24 Feb 2020 23:54:51 GMT

Hi Corinne1

As macfanboy says, you can make personal contributions into super and receive a government co-contribution if you meet the eligibility criteria.

At least 10% of your income has to be employment or business income.

You have to be earning less than $38,654 (in 2019-20) to be eligible for the maximum $500 co-contribution - for a $1,000 contribution made by you. ie the government pays 50 cents for every $1 contributed by you.

If you're earning between $38,654 and $53,564 you'll be eligible for a lower co-contribution amount. Eg if you're exactly half way between these two income amounts you'll be eligible for a $250 government contribution - for a $500 contribution made by you.

Besides the co-contribution you can also make a personal contribution to super and claim a tax deduction for it. The super fund will then deduct 15% tax from the contribution but you'll receive a refund at your marginal tax rate.

Working through some numbers. Let's say you're earning $46,154 - exactly half way between $38,654 and $53,564. You contribute $1,500 to super. For the first $500 you want the government co-contribution. For the remaining $1,000 you tell your fund that you intend to claim a tax deduction for that amount in your income tax return.

In your super account you initially have $1,350. That's the $500 personal non-concessional contribution, and the $850 personal concessional contribution after the fund has taken out the 15% contributions tax on the $1,000.

At the end of the financial year you lodge your income tax return. In the income tax return you claim a tax deduction for the $1,000 personal contribution. The ATO also works out your co-contribution entitlement.

The ATO pays $250 to your super account as a co-contribution. You then get a tax refund of $325 for the $1,000 concessional contribution. (The 32.5% marginal tax rate applies to incomes from $37,001 to $90,000).

In summary, for your $1,500 personal contribution you'll end up with $1,600 in your super account, and $325 in your bank account as a tax refund.

I'm an ATO employee voluntarily providing my time here

OnePath Plus

Cobramwindows1 — Mon, 24 Feb 2020 22:30:41 GMT

I have a message to update an employees Super payment details but not sure what its about They are with OnePath Plus has there been a change in USI or ABN details for this Super Fund?

Re: SG on purchased leave?

Glenn4802 — Mon, 24 Feb 2020 10:16:25 GMT

The SG amounts would be based on your reduced salary. For example, if purchasing four weeks of additional leave meant that your total salary paid reduced from $100,000 to around $92,300, SG would be payable on a maximum of $92,300.

The only time that SG might be payable on an amount higher than your received salary is when you salary sacrifice super contributions.

Whilst the above relates to SG obligations, you should also check your employment agreement as it might allow for a more generous outcome.

FHSSS - using funds

jesswa — Mon, 24 Feb 2020 07:52:18 GMT

I have requested a release, sent the funds to the ATO and express posted my form back to ATO to conform.

How long until I can expect the funds in my account?

Re: Super

macfanboy — Mon, 24 Feb 2020 06:54:41 GMT

Yes you can put money into super if you work for yourself up to $100,000 per year if under 65.

The government will only 'co-contribute' as per Super Co-contribution

Based on your income level and upto a maximum of $500 (only if you don't claim it as a tax deduction).

SG on purchased leave?

KB7 — Mon, 24 Feb 2020 06:48:36 GMT

Hi, can someone confirm whether Super Guarantee is payable on purchased leave. If my Gross PAYG income is $100K and my employer allows me to purchase leave (get additional holidays) my gross annual income will drop by the amount of $ equivalent for the leave taken. Is SG payable on the original income of $100k or the reduced amount?

I cannot see anywhere references to this sort of arrangement as a Salary Sacrifice. I am not receiving a financial benefit of any sort, just getting more time off for which I am not paid.

Look forward to hearing your thoughts and any references.

Super

Corinne1 — Mon, 24 Feb 2020 06:33:04 GMT

If you work for yourself can you put money into super and does the government match it?

Re: FHSS Scheme contributions, tax and timeframes

ChrisR — Mon, 24 Feb 2020 04:28:29 GMT

Thanks for your question.

The only contributions that count are voluntary contributions. They can be voluntary concessional contributions (salary sacrifice amounts or personal contributions that have been or will be claimed as a tax deduction) or voluntary non-concessional contributions (after tax contributions).

Compulsory contributions such as SG contributions can't be withdrawn via the FHSS scheme. If you haven't made any voluntary contributions since 1 July 2017, you won't be able to submit a FHSS determination request.

If you start making voluntary contributions now, you can withdraw those contributions via the FHSS scheme. Any SG contributions made between now and then can't be included in your FHSS determination request.

Check out our website for more information about how you can save in super and the contributions you can make.

Hope this helps.

Thanks,

ChrisR

DASP

Sagar1 — Mon, 24 Feb 2020 04:10:27 GMT

Hello ATO,

My Question is regarding Eligibility & Taxation on DASP

I entered Australia and was on 457 Work Visa from March 2014- March 2017

From March 2017 onwards till now, i am a Permanant Resident Sub Class 186

I Plan to permanantly leave Australia next year, say March 2021,

Would i be elegible for DASP :-

- if yes how much would i be Taxed on my Super.

- if not when will be eligible for the Payment. Thanks

First Home Super Saver - Calculation and Withdrawal Amount

Shikhar — Mon, 24 Feb 2020 03:59:45 GMT

Hi!

I would like to know how much am I saving if I choose to use FHSS scheme.

Currently I am earning $1,25,000 before Tax ( including 9.5% Super) , my wife earns $1,06,000 before Tax ( including 9.5% Super).

2019 -2020 : I make a voluntary after tax contribution into my Super of $15000 between Feb and June 2020 ( I also claim a tax deduction on it via Notice of Intent) . I checked that I have not capped the total yearly limit
2019 -2020: My wife makes a voluntary after tax contribution into her Super of $15000 between Feb and June 2020 ( she also claim a tax deduction on it via Notice of Intent) . She checked that she has not capped the total yearly limit
2020-2021 : I make a voluntary after tax contribution into my Super of $15000 between July and Dec 2020 ( I also claim a tax deduction on it via Notice of Intent) . I checked that I have not capped the total yearly limit
2020 -2021: My wife makes a voluntary after tax contribution into her Super of $15000 between July and Dec 2020 ( she also claim a tax deduction on it via Notice of Intent) . She checked that she has not capped the total yearly limit
In total, between me and my wife, we have contributed $60000 into Super as voluntary contributions.

Plan to purchase first home in 2021.

Questions :

Based on this scenario can you please me understand how much I might be saving, in general, through the FHSS? Would appreciate it if you could give me a break down of the calculation including tax, associated earnings, etc..
Are my super contributions Concessional or Non-Concessional as I am claiming a tax deduction on them?
How much will I be able to withdraw from my Super ? As per my understanding I can withdraw 85% of my concessional contributions. Please correct me if i am wrong. Does blocking 15% of your super amount makes sense by the benefit we get from the FHSS scheme?
I can only buy a already build house/ Contruct a house with the FHSS amount? I can't buy a land through it?
Anything that I am missing that can increase the benefit of FHSS?

Thanks!

Re: FHSS Non Concessional Contributions Tax Deductable?

ChrisR — Mon, 24 Feb 2020 03:48:04 GMT

Thanks for your post.

Your analysis and calculations are correct. By claiming the personal super contribution deduction, you will be $2,250 (15% of $15,000) better off.

When you look at the calculations, you will discover that this is because of the 30% offset that is applied to your assessable FHSS released amount.

Another way of looking at it is this: $15,000 minus $2,250 (15% contribution withholding tax) plus $4,500 (30% offset) equals $17,250 ($15,000 plus 15%). The other tax rates and numbers cancel each other out.

Hope this helps.

Thanks,

ChrisR

Re: Is superannuation payable on time in lieu?

MattH — Mon, 24 Feb 2020 03:36:03 GMT

Hi Chris,

I am seeking advice regarding a similar situation. Employees currently are allowed to accrue TOIL in relation to Non-OTE hrs that is paid at ordinary rate. It also accrues hour for hour, however overtime rates differ depending on the position.

Example 1: we have employees paid well above award rates covered by individual agreements. They are paid at their normal hourly rate for weekend work, which is accrued as TOIL.

Example 2: we have employees paid under an Enterprise Agreement. They are paid at ordinary rates for travel in excess of their ordinary daily hours (in excess of 8hrs per day).

Would these two examples still fall under the definition of an RDO?

Thanks,

Matt

Re: SGC statement

SebReiter — Mon, 24 Feb 2020 01:08:58 GMT

Hi 925deed

I'm sorry you've ended up in this situation.

Yes, the calculation seems correct. It seems to represent interest (at 10%) accruing for over a year (ie from 1 October 2018 until the date the SGC became payable), and the administrative component of $20 per employee, so an additional $3,700 based on 185 employees being involved.

The Super Guarantee law is very clear - if not enough is paid to employee's super accounts before the 28th day of the month following the end of the quarter, SGC will be payable. There's no discretion that can be applied by the Commissioner of Taxation based on the circumstances, based on it being the first time an employer has missed a payment.

And once SGC applies, it's only the administrative penalty amount applied that will vary depending on the situation, how helpful an employer is in providing information to establish the SGC amount, whether the employer has previously not paid SG contributions correctly.

Based on the information you've provided it seems no administrative penalty has been applied in your situation.

The calculation of SGC is set out in law. The $20 admin component can't be waived. The interest amount is calculated from the first day of the relevant quarter - so from 1 October 2018 in this case, even though the payment wouldn't normally have been made until some time in January 2019. This is all set out in law and not something the ATO has any ability to vary based on circumstances.

So the tough stance is baked into the law, not something the ATO has chosen to do. And there are ideological differences that make policy change difficult in this area, as has played out in debates between the major parties whenever suggestions are made for changing how the SG charge regime operates.

Again, I'm sorry you've ended up in this situation.

I'm an ATO employee voluntarily providing my time here.

Re: SMSF Investment Strategy update ruling

Bruce4Tax — Sun, 23 Feb 2020 22:42:19 GMT

Updated guidelines https://www.ato.gov.au/super/self-managed-super-funds/investing/your-investment-strategy/

SMSF Investment Strategy update ruling

DJP — Sun, 23 Feb 2020 22:32:29 GMT

Was there a new ruling issued about investment startegy recently or just revised guidelines issued recently.

FHSS "as soon as practicable after purchase"

vefzdybg — Sun, 23 Feb 2020 13:13:05 GMT

I understand that for FHSS to be withdrawn appropriately I need to:

occupying or intending to occupy the property as soon as practicable after purchase
occupying or intending to occupy the property for at least six of the first 12 months from when it is practicable to occupy it.

but I'm wondering how this works if I buy a property that has an existing lease that ends later than 6 months. So for example if it's March and I buy a property that has a tenant on a pre-existing lease until December. If I plan to move in as soon as they vacate (i.e. January next year) does this still fall within the requirements?

DASP

Kirstymonington — Sat, 22 Feb 2020 13:02:36 GMT

Hi, I recently applied for my DASP and have received a PAYG payment summary in the post but no cheque or any payment method for what’s owed to me. Can you let me know next steps please?
Thanks
Kirsty

Release of funds and contract dates

mikalex39 — Sat, 22 Feb 2020 06:19:26 GMT

Hi guys,

I recently signed a contract to place an offer for a house on the 15/2/2020 with a settlement contract to be signed in April. I met with a mortgage broker today and subsquently in consolidating all available assets, applied for release of my FHSS funds. This included both the determination and release request. I noted on applying however that the determination should have been requested before a contract is signed. My first question is which contract applies to the above, the offer or the settlement contract? If it's the former, does that mean I will be taxed because I asked for a determination 1 week after I signed an offer?

Thanks in advance

SGC statement

925deed — Sat, 22 Feb 2020 04:39:32 GMT

I am responsible for the super payments for our company. We lodge and pay our super monthly and most times b4 28th. However, in jan 2019 I forgot to lodge the dec 2018 $45k (oct and nov were paid). When I discovered my error on 21st feb I made the dec payment together with the jan 2019 super. All the super was paid by end of June. We report with STP. In oct 2019 ato contacted us and advised records indicated we had perhaps not paid dec 2018 qtr or paid it late and we should submit a SGC statement. We asked our accountants to lodge this on our behalf and now have a $8,800 debt. There were 185 employees involved. $5,200 of this is interest. Accountants say this is ATO tough stance. Given that our employees receive their super monthly not quarterly I did not feel that had been overall disadvantaged by my mistake. This was a genuine misunderstanding on my part regarding the late payment and a one off - can this calculation be correct?

Re: Centrelink debt vs FHSSS

macfanboy — Fri, 21 Feb 2020 22:59:56 GMT

Any amounts you withdraw from your super fund as part of the FHSS Scheme will be used to pay your outstanding Commonwealth debts.

“Commonwealth debts” can include:

Income tax debt
Certain business (or integrated client) account debts, including activity statement debt
Centrelink debts, and
Child Support Agency debts.

Doesn't matter if you have a "Payment Plan', they will take the money at the first opportunity.

unpaid super

jlpower — Fri, 21 Feb 2020 22:04:13 GMT

I reported my ex=employer for unpaid super. The ATO investigated and I received 2 payments recently as super guarantee payments. They have since stopped and I am still owed many thousands of dollars. I have received no letter from ATO about what the payments were but assume they are part payments from my ex-employer. My employer has recently been evicted from their building but have not ceased trading. What can I now do about this? I am concerned that my employer will be liquidated and don't know what my options are?

Centrelink debt vs FHSSS

Justice8511 — Fri, 21 Feb 2020 13:55:18 GMT

Once a determination is made, is that a final amount, or there can be more deductions like centrelink debt offset? If there is a payment plan in place for the centrelink debt, will the debt still be deducted from the detemination amount?

Re: My Superannuation does not arrive

NateH — Fri, 21 Feb 2020 02:49:54 GMT

Hi ,

We're sorry to hear that your application has been held up. We don't know what is happening on this platform as we don't have access to your records.

We would advise against reapplying for your DASP as you already have an application and this could cause further hold ups. The 28 days is just normal days, not business days.

If you had any questions you can contact DASPmail@ato.gov.au

Thanks, NateH

Re: Compassionate release claim

NateH — Fri, 21 Feb 2020 02:22:30 GMT

Hi ,

Once you have lodged the online form we assess your eligibility for compassionate release of super, which can take up to 14 days.

We can't provide you with a progress update during the assessment phase. Once we assess your application, you will receive an SMS text message advising the outcome. You will be advised of the outcome within 72 hours of your application being processed.

To check on the status of your application you'll need to contact us over the phone as we don't have access to your records on this platform.

Thanks, NateH

Re: FHSS release requested

NateH — Fri, 21 Feb 2020 01:51:58 GMT

Hi ,

When you receive your amount we will withhold tax that will be calculated at either:

your expected marginal tax rate, including Medicare levy, less a 30% offset
17% if the Commissioner is unable to estimate your expected marginal rate.

The only other taxes that could apply to FHSS amounts is the FHSS tax. This only applies if you do not sign a contract to purchase or construct a home within 12 months from the date you requested a release though (which doesn't apply to you).

Have a look at our web content about the FHSS specifically the section After your savings have been released

Thanks, NateH

Re: Unused Long Service Leave - Salary Sacrifice

SebReiter — Thu, 20 Feb 2020 23:59:50 GMT

Not that that's probably much help at the moment, as you'd need to leave your job to have your unused leave paid out.

But maybe worth thinking about when you do leave your job, depending on the situation at the time.

Re: Unused Long Service Leave - Salary Sacrifice

SebReiter — Thu, 20 Feb 2020 23:54:25 GMT

Hi KristyH

Here's a link to the ato.gov.au page about salary sacrifice and salary packaging.

In short, no, you can't sacrifice entitlements that have already accrued. Only future entitlements that accrue can be sacrificed.

However - If you can have this amount paid out to you you'll then be able to make an after tax personal contribution to super, and then claim a tax deduction for this contribution in your income tax return.

Eg You have $5,000 of leave paid to you. You pay tax on this at 37% (as an example). You end up with $3,150 after tax to contribute to your super fund. You then tell your fund that you'll be claiming a tax deduction for this contribution. The fund then treats it as a concessional contribution and taxes it at 15%, leaving $2,677.50 in your super account. In your income tax return you claim a deduction for the $3,150 contribution you made and receive a tax refund of 37% of this amount - $1,165.50. At the end of the day you have $2,677.50 in your super fund, $1,165.50 as a tax refund, and paid tax of $1,157.

If you'd salary sacrificed this amount straight into super the fund would have taxed the $5,000 at 15%. You'd pay a total of $750 tax and have $4,250 in your super account. But you wouldn't have the tax refund of $1,165.50.

The difference between the two scenarios is that with salary sacrifice you don't pay the tax up-front, whereas with a personal contribution you do. If you were to put an additional $1,850 into your super account as well as the $3,150 the outcomes would be exactly the same in relation to what's in your super account and what after tax income you'll have received. So it's a timing question.

Working this through. You put the $3,150 into super, plus an additional $1,850, so a total of $5,000. The fund taxes it at 15%, leaving $4,250 in the super account. You then receive a tax refund of 37% of $5,000, which is $1,850 - the additional amount you put in up-front to make the same $5,000 contribution as in the salary sacrifice scenario.

Apologies for the long answer. The short answer is no, you can't salary sacrifice your unused long service leave to super.

I'm an ATO employee voluntarily providing my time here

Re: Claiming back my super

KylieS — Thu, 20 Feb 2020 22:46:05 GMT

Hi ,

I would contact Home affairs to check on the visa status they have reported.

KylieS

Re: Compassionate release claim

KylieS — Thu, 20 Feb 2020 22:28:43 GMT

Hi ,

Think of it as in progress, it indicates it has been received.

Thanks

KylieS

Claiming your superannuation after leaving Australia as a temporary resident.

nicobuitrago — Thu, 20 Feb 2020 13:50:49 GMT

Hi ATO community,

I woud like to enquire about whather it is viable/ reasonable to withdraw my superannuation once I've left Australia even though I intend on returning to Australia as a student. I am currently holding a student visa, which will be expiring this coming March 2020 after completing my undergradate studies. I have decided to take some time off before going into posgraduate studies in 2021. As I will not be in Australia for roughly a year and will be on an expired visa once I have departed, I am wondering if withrdrawing my superannuation would affect future visa applications, including those that lead to permanent residency. I am planning on applying for PR once I have completed my posgradtue studies, yet I am unsure as to whether I would be allowed to claim my super again in the future? Would claiming my super after my departure impact my right to work?

It would be highly appreacited if anyone could provide me with some information in regards to this.

Sincerely,

Nic

Unused Long Service Leave - Salary Sacrifice

KristyH — Thu, 20 Feb 2020 07:32:02 GMT

Hi I was just wondering if you can salary sacrifice your Unused Long Service Leave to your Superannuation Fund?

Re: Transition to Retirement (TTR) Income Tax for person over 60 , but less than 65

Bruce4Tax — Thu, 20 Feb 2020 07:10:35 GMT

What are income tax implications for amount up to 10% and the amount over 10%?

Assuming TTR is 100% preserved, paying more than 10% means TTR deemed to cease at the start of that year, and the whole amount is illegal early release.

See:

Paying more than the maximum annual pension payment limit
If a member has only restricted non-preserved benefits or preserved benefits as part of their TRIS, exceeding the maximum annual pension payment limit will be a breach of the super laws as the fund has not adhered to the cashing restrictions that apply to a TRIS.
As trustee, you need to be aware that if you exceed the maximum annual pension payment limit for a year in such circumstances:
- we may make your fund non-complying and penalise you as trustee
- the TRIS ceases for income tax purposes at the start of that income year.
- the member's account balance is no longer seen as supporting a TRIS and any payments made during the year (not just the amount in excess of the limit) will be super lump sums for income tax purposes and lump sums for SIS Regulations purposes
- the lump sum payments are included in the member’s assessable income and are taxed at marginal rates, without any tax offsets. (the payments are treated as early access to the member's super benefits and a breach of the SIS payment standards).
Last modified: 22 Mar 2019 QC 42388

Re: FHSS

SebReiter — Thu, 20 Feb 2020 06:09:00 GMT

Hi Rebecca

The best record is statements sent to you by your previous super fund, showing the timing and amount of these contributions.

Any voluntary non-concessional contributions you've made from 1 July 2017 onwards will be eligible to be released if you're otherwise eligible for FHSSS.

You can request an FHSS determination from the ATO which will show the amount that can be released under the scheme. Where eligible contributions have been correctly reported to the ATO by your super fund these amounts will be pre-filled for you on the determination. Where they haven't been correctly reported you'll need to add these details yourself.

Here's a link to the FHSS information page on ato.gov.au.

I'm an ATO employee voluntarily providing my time here

Transition to Retirement (TTR) Income Tax for person over 60 , but less than 65

TC8 — Thu, 20 Feb 2020 04:41:39 GMT

Person over 60 , but less than 65, had one release from TTR in financial year. Person wants another release but would end up being more than 10% for the financial year.

What are income tax implications for amount up to 10% and the amount over 10%?

Thankyou

Re: Returning to work

SebReiter — Thu, 20 Feb 2020 04:24:47 GMT

Hi Rangadad

Yes you can return to work.

The question is what happened when you claimed your super benefit. If you left employment before you turned 60 you would have had to confirm to the fund trustee that you had no intention to ever work again on a full or a part time basis. If this was your intention at the time then it's all good. The law is about the person's intention at the time of applying for the super payment, not about what happens afterwards.

If you left employment after you'd turned 60 then you wouldn't have had to say anything about your future work intentions. Even if you'd intended to return to work a week later the trustee would have been ok to pay the super benefit to you.

I'm an ATO employee voluntarily providing my time here

Re: Superannuation for Casual Employees

SebReiter — Thu, 20 Feb 2020 03:58:11 GMT

Hi NicH

Firstly - depends if there's an award in place under which the person is employed which sets out what superannuation is payable to a casual employee. If there is and the award says super is payable on overtime hours, there's your answer.

Assuming there's nothing in the award about superannuation and we're talking solely about the superannuation guarantee payable for the employee, we need to look at the award to see what it says about the ordinary hours of work for a casual employee.

Have a look at rows 4 to 7 in the first table on this page on ato.gov.au. This lets us know if a payment received by the casual employee is treated as ordinary time earnings (OTE) or as Salary or Wages.

If no ordinary hours are stipulated in the award, all hours will be included in OTE. If they are stipulated and the employee works overtime, the overtime hours aren't included in OTE.

If an employer pays super contributions by the due date, the 9.5% contribution is calculated on an employee's OTE. If an employer misses the due date, the 9.5% super guarantee charge shortfall amount is calculated on the employee's Salary or Wages amount.

Hopefully that all makes sense. As with many things in life, the answer is 'it depends'.

I'm an ATO employee voluntarily providing my time here

Re: Hearing aids

ChrisR — Wed, 19 Feb 2020 23:52:24 GMT

Thanks for your question.

Depending on your circumstances, you may be able to withdraw some of your super on compassionate grounds to pay for your hearing aids. Compassionate grounds include unpaid medical treatment for you or a dependant.

You can read more about super access on compassionate grounds on our website.

We have a report that you can use to support your application. You will need to provide two separate reports. One must be from a registered medical specialist and the other can be from another registered medical specialist or a registered medical practitioner such as a GP.

You can access the Compassionate release of superannuation – Report by registered medical practitioner from our website.

Hope this helps.

Thanks,

ChrisR

Re: Buying a land - When to apply for a FHSS determination

ChrisR — Wed, 19 Feb 2020 23:27:05 GMT

Thanks for your post.

Your understanding is correct. To be eligible to use the first home super saver (FHSS) scheme, you must have never owned property in Australia. This includes vacant land.

You can check out the first home super saver scheme page on our website for more information.

This rule means that you will need to make sure that you have made all of your voluntary contributions and submitted your FHSS determination request before making your land purchase.

As to when you will be considered a land owner, generally this is when you sign the land purchase contract, not when you pay the holding deposit. In turn, you will need to submit your FHSS determination request before you put pen to paper.

It is also important to note that if you purchase vacant land to build a home on, it is the contract to construct your home that must be entered into to meet the FHSS scheme requirements.

Hope this helps.

Thanks,

ChrisR

Re: Compassionate release claim

Biggiesmalls — Wed, 19 Feb 2020 22:32:59 GMT

Sounds right...

Re: Treatment of Income Protection payouts in superfund and allocation urgent

Bruce4Tax — Wed, 19 Feb 2020 22:25:08 GMT

I quickly need your help. member of our Superfund received insurance benefits under the income protection claim and need to be allocated under right head. I believe it would be taxable right at 15% in the super fund.

According to First State Super:

Income protection insurance held on a member's behalf through super is not assessable income of the fund, and the fund trustee cannot claim a tax deduction for proceeds paid on to a member.

The SMSF needs to issue a payment summary, because benefits are taxable to member as ordinary income.

can we make one lump sum payment? .

No - see https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Conditions-of-release/#Temporaryincapacity

Claiming back my super

Simon101 — Wed, 19 Feb 2020 22:13:37 GMT

I have left Oz and my 457 visa has expired but I am unable to claim my super back online.

When I get through the process it tells me that home affairs does not have me registered as having a WHV.

I had a 457 what can I do?

Superannuation for Casual Employees

NicH — Wed, 19 Feb 2020 07:26:54 GMT

I am currently studying tax accounting and i can't seem to locate the correct answer.

Does a company have to pay superannuation to a casual employee for overtime hours worked.

The information I have read seems to contradict and I am unsure of what the correct answer is

Re: Wrong tax amount was applied

ChrisR — Wed, 19 Feb 2020 07:12:03 GMT

Thanks for your post.

From what you have advised, it sounds like your super fund has applied the tax correctly.

When they processed your application, they would have checked whether your DASP included amounts attributable to contributions made while you held a WHM visa. When it does, they are required to apply the 65% tax rate to the taxable component.

In other words, the DASP WHM tax rate applies to the entire payment, including any super you may have earned while working under a different visa.

For more information about DASP for working holiday makers as well as how DASP is taxed, you can check out our website.

Thanks,

ChrisR

Treatment of Income Protection payouts in superfund and allocation urgent

Lbhardwaj — Wed, 19 Feb 2020 06:44:50 GMT

Hi There,

I quickly need your help. member of our Superfund received insurance benefits under the income protection claim and need to be allocated under right head.

I believe it would be taxable right at 15% in the super fund.

And also, can you please also describe how the payment will be processed to member under the temporary incapacity, can we make one lump sum payment? .

Please assist asap.

FHSS

RHiggins — Wed, 19 Feb 2020 06:00:08 GMT

Hi,

I made several volutary contributions (non-concessional) into my super account over the last few years. I have since rolled my super over to a new provider who don't have that history. Is there anyway to find out via the ATO if any of those contributions are eligibile under the FHSSS? I just want to know if I have any money that is accessible under the scheme so I can plan my savings over the next year.

I'm otherwise eligible for the FHSSS.

Best

Rebecca

Returning to work

Rangadad — Wed, 19 Feb 2020 05:04:17 GMT

Iam 63 and retired and claimed my full amount of super, am I able to return to part time work.

thanks

Re: TBC figures provide by DB Scheme

ChrisR — Wed, 19 Feb 2020 04:05:13 GMT

Thanks for your post.

is correct. Ultimately you will have to rely on the numbers that your super provider is providing. If you are concerned about the accuracy of their estimates, we recommend that you have a chat with them about it.

For more information about how it will be calculated and what will happen if you exceed your defined benefit income cap, have a look at the transfer balance cap – capped defined benefit income streams page on our website.

Hope this helps.

Thanks,

ChrisR

Re: FHSS Scheme contributions, tax and timeframes

Johanny — Wed, 19 Feb 2020 03:56:03 GMT

Hi NicM,

Could you please clarify that Employer compulsory contributions, such as Superannuation Guarantee (SG) contributions don’t count towards the FHSS Scheme? Only my voluntary contribution will count?

Just asking as I do have funds in my super and I am looking to buy a property soon, however, I haven't made any voluntary contributions. So, will I be eligible or not?

Alternatively, could I start making voluntary contributions now and withdraw from the FHSS alongside my employer contributions in the near future?

Thanks

Re: Transfer funds SMSF to Industry Fund

Bruce4Tax — Tue, 18 Feb 2020 23:27:52 GMT

My wife’s equity in our SMSF is substantially more that the amount she wishes to transfer out of the SMSF into her industry fund.
My wife is 64 and I am 69. Are there any potential problems with doing this and what process is involved?

If your wife's SMSF member account was, say, $ 500,000 and she transferred $ 200,000 to an industry fund, then her member account in the SMSF would be reduced to $ 300,000.

The process is:

1. prepare SMSF financials up to date - to ensure tax components are correct.

2. issue a lump sum prepayment statement to member for amount to rollover

3. member responds with name and details of industry fund - fill in on form and sign

4. member sends completed rollover form to industry fund

5. EFT amount to industry fund, or cheque

6. fund should get confirmation that rollover was accepted by industry fund - for SMSF auditor.

7. If there is any commutation of pensions, then TBAR form needed.

We would like to transfer most of the cash amount into my wife’s industry fund account.

Need to ensure that SMSF liquidity is maintained.

My Superannuation does not arrive

MikiSpain — Tue, 18 Feb 2020 13:46:01 GMT

I lodged my DASP 2 months ago. And still does not have any information about it.

My Superfunds did not contact me or send me the amount.

What can I do in order to finish with this Superannuation Issue?

Should I reapply for my DASP?

If I reapply does it reset the process?

Are the 28 days to wait for the DASP natural or working days?

Is this Usual or maybe there is problem with my particular case?

Re: FHSS Non Concessional Contributions Tax Deductable?

Marco85 — Tue, 18 Feb 2020 11:15:57 GMT

Hi Cris,

I will try to rewrite your detailed answer. Can you please correct me if my analysis is wrong?

If I do a $15,000 non-concessional contribution to my superannuation account with the intention to withdraw it as FHSS, and I do specify I want to claim a tax deduction:
1) 15% will be taxed by the superannuation
2) The $15,000 contribution will be taxed according to my marginal rate (eg. 32.5% at $90,000 income) + 2% medicare - 30% FHSS offset (ie. 4.5%)
3) I can claim $15,000 as a tax deduction at the end of the financial year

If I've got it right, assuming $0 earnings, from point 1) and 2) I will be left with:
1) $15,000 x 15% = $12,750 (tax witheld $2,250)
2) $15,000 * (32.5% + 2% - 30%) = $15,000 * 4.5% = $675 (tax witheld)
The amount that will be released by ATO should be: $15,000 - $2,250 - $675 = $12,075.
So, considering that initially the $15,000 contribution was "after-tax", I have "lost" $2,925 in taxes.

Which does not sounds very convenient if you needed the whole $15,000 for a home deposit.

However, since I can claim the original $15,000 as a tax deduction, assuming an overall income of $90,000:
3) at tax time I will get a $5,175 back because the overall income will be $75,000.

Thus the final gain will be: $5,175 (tax return) - $2,925 (previously witheld taxes) = $2,250
(by coincidence this amount matches with the 15% originally witheld by syperannuation)

If that is correct, in a case scenario similar to the one given as an example in this page, it sounds like it is pretty convenient to claim a tax deduction for the non-concessional contribution taken out for FHSS.

Re: FHSS Withdrawl

Badru — Tue, 18 Feb 2020 10:32:41 GMT

Hi Chris,

This helps heaps! Thanks so much!

Compassionate release claim

Narelle1209 — Tue, 18 Feb 2020 08:14:40 GMT

I submitted my early compassionative release claim yesterday it says pending is that right ?

Compassionate release claim

Narelle1209 — Tue, 18 Feb 2020 08:10:43 GMT

My compassionate release claim says pending I submitted yesterday is that right ?

Re: FHSS & Non-concessional superannuation contributions

ChrisR — Tue, 18 Feb 2020 03:37:25 GMT

Thanks for your post.

We have provided some information to you about your situation in another thread. In case you missed it, you can check out it out here: FHSS Taxed Non-Concessional Amount

We will only withhold tax from the assessable FHSS released amount. This amount is your concessional contributions plus associated earnings and is based on the information that you have provided in your FHSS determination request.

If your circumstances are different to what you outlined in the other thread, let us know.

Hope this helps.

Thanks,

ChrisR

Re: Retirement condition of release - ceasing gainful employment after age 60

ChrisR — Tue, 18 Feb 2020 02:57:36 GMT

Thanks for your post.

As you are in the 60 to 64 age bracket, the retirement condition of release is considered to be met when an arrangement under which you were gainfully employed has ceased.

is correct. While your full time position may have ended, your employment with that employer hasn't ceased. In turn, it doesn't sound like you have met the retirement condition of release.

For general information about when you can access your super, have a look at our website. You can also check out the conditions of release page in the SMSF section of our website. Even if you're not a member of a SMSF, the same concepts apply.

You might also find the Retirement – Establishing whether gainful employment has ceased case study useful. While it isn't the same as your scenario, there are some similarities.

Hope this helps.

Thanks,

ChrisR

Re: FHSS & Non-concessional superannuation contributions

Marco85 — Tue, 18 Feb 2020 02:34:35 GMT

This has not been applied to me!
I triggered an ATO internal investigation, and the outcome is: ATO will tax anything you get out of superannuation. In case of FHSS and non-concessional contributions, once you withdraw, even if it's 100% from concessional contribution, you will be taxed again based on your income for the current financial year.
I've just had a phone call from ATO, they are closing my case with such explaination, no matter I was telling them this is WRONG.
Please someone help me!!!
Last August I've put $15,000 as after-tax money from my bank account, and in December I've requested determination. The result from the online determination was that the max releaseable amount was around $13,000. I've called ATO for explaination, and I've been told that I will get back the missing money via Tax return at the end of the financial year. However, after then applying for release, I have then received less than $11,000 in my bank account.