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Reason for DASP WHM tax change

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How does the ATO justify taxing 65% on DASP? It seems like an absolutely outrageous tax rate to me. I'd like to understand the reasoning behind the justification for this and am unable to find any resources aside from announcements that the change is in place.


To another point, if this is truly aimed at people on a working holiday visa, why can't the portion of super contributed during that period only be taxed at the inflated 65% rate, so as not to effect the majority of earnings of people holiding 457 visas and the like? All the information is available for this to be easily calculated.

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Hi @drv11,

 

Thanks for posting.

 

While we’re sometimes invited to provide input, changes to superannuation legislation is the responsibility of the Parliament of Australia. We administer these changes once they have received Royal Assent and become law.

 

You can find information about the changes for working holiday makers in the Explanatory memorandums to the:

 

There are a couple of other conversations on this topic you can view here on Community.

 

If you have any feedback on the legislation you can contact your local member of parliament or the Department of Treasury – find their details on the Australian Government website.

 

Thanks, NicM.

 

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Hi @drv11,

 

Thanks for posting.

 

While we’re sometimes invited to provide input, changes to superannuation legislation is the responsibility of the Parliament of Australia. We administer these changes once they have received Royal Assent and become law.

 

You can find information about the changes for working holiday makers in the Explanatory memorandums to the:

 

There are a couple of other conversations on this topic you can view here on Community.

 

If you have any feedback on the legislation you can contact your local member of parliament or the Department of Treasury – find their details on the Australian Government website.

 

Thanks, NicM.

 

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Newbie

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Very helpful NicM, that's exactly what I was after. Thank you!

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I'm new

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Hi @drv11 

 

I was wondering if you contacted your local member of parliament or the Department of Treasury for futher clarification and if so, what was the outcome?

 

Thanks and good luck!

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Hi @drv11

 

Personally, i think the rate is so high that it's ridiculous. No reasons should be able to justify 65%. Interestly, did you know that originally the proposed tax rate was actually 95%? here is a link to the explanatory memorandum of the actual legslative bill introduce: https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r5737_ems_fcb40b9c-118f-4e2b-bec6-790e.... The rate was subsequently reduced via the SUPERANNUATION (DEPARTING AUSTRALIA SUPERANNUATION PAYMENTS TAX) AMENDMENT BILL (NO. 2) 2016. Here is the link to the EM:https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r5793_ems_8a390685-8a6b-4f35-bc3d-4c01...

 

The argument for the tax rate is as follows:

 

"1.32 Increasing the rate of tax on departing Australia superannuation payments for working holiday makers is consistent with the objective of superannuation which is to support Australians in their retirement."

 

Pretty sh**y? i agree.

 

To your last question, the ATO's FAQ suggests that "because the law says so".

 

 

https://www.ato.gov.au/Super/APRA-regulated-funds/In-detail/APRA-resources/Questions-and-answers/DAS...

 

What if a DASP includes, but is not wholly comprised of, amounts attributable to super contributions made while the person held a WHM visa?

 

The law does not allow for apportionment. If the payment includes amounts attributable to super contributions made while the person held a WHM visa, the 65% tax rate applies to the taxed and untaxed elements of the taxable component of the DASP. This is the case if the DASP is not wholly comprised of amounts attributable to those contributions.

 

Goodluck!

 

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I'm new

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Thanks For Information