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Re: Tax Offset

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Why has the tax office directed CSC to put nil in the tax offset part of the PAYG Payment summary. For what purpose?

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ATO Certified

Devotee

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Hi GMMurray

 

Here's a link to ato.gov.au information about this.

 

It relates to the change in the 2016 budget which introduced a limit on the amount of super an individual can have in the retirement phase. This limit is $1.6m, with amounts above this having to remain in an accumulation phase account.

 

For defined benefit members there's no account as such, so part of the money can't be moved back into the accumulation phase. So the solution was to apply additional tax where the taxable part of the defined benefit pension was greater than $100,000 in a year.

 

This won't affect many defined benefit pensioners, but a defined benefit fund won't know if a pensioner is receiving another defined benefit pension where the combined amount is greater than $100,000, so the fund can't be sure if the person is entitled to the tax offset they'd calculate.

 

There's a calculator available via the link above which will let you calculate the tax offset.

 

I'm an ATO employee voluntarily providing my time here

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Best answer

ATO Certified

Devotee

Replies 0

Hi GMMurray

 

Here's a link to ato.gov.au information about this.

 

It relates to the change in the 2016 budget which introduced a limit on the amount of super an individual can have in the retirement phase. This limit is $1.6m, with amounts above this having to remain in an accumulation phase account.

 

For defined benefit members there's no account as such, so part of the money can't be moved back into the accumulation phase. So the solution was to apply additional tax where the taxable part of the defined benefit pension was greater than $100,000 in a year.

 

This won't affect many defined benefit pensioners, but a defined benefit fund won't know if a pensioner is receiving another defined benefit pension where the combined amount is greater than $100,000, so the fund can't be sure if the person is entitled to the tax offset they'd calculate.

 

There's a calculator available via the link above which will let you calculate the tax offset.

 

I'm an ATO employee voluntarily providing my time here

Enthusiast

Replies 0

Hi @GMMurray

 

Just to add to the information @SebReiter provided in his response, the ATO has been consulting with CSC and SCOA Australia recently and assisted with information they have published on their websites:

 

http://scoa.asn.au/24-september-2018-information-from-ato-about-the-2018-payg-statements/

 

https://www.csc.gov.au/Members/News/Changes-to-Capped-Defined-Benefit-PAYG-payment-summaries/

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

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