How your superannuation entitlements could be affected?
Category : Legal Advice Video Archive
The following is a summary of new developments in superannuation industry.
Re Azer and FCT  AATA 472
In this decision, the Administrative Appeals Tribunal (the Tribunal) affirmed the decision of the Commission for Taxation which found that an individual taxpayer could not make out special circumstances in order to have excess concessional contributions ignored.
In this case Mr Azer worked in the public sector while having a number of casual jobs in addition. He salary sacrificed all his earnings from his casual jobs into his superannuation account to provide for his retirement and his family. In response to receiving a notice of amended assessment for the 2013-14 financial year, Mr Azer submitted that he had made an inadvertent mistake and he would have stopped the salary sacrifice arrangement had he known he was approaching his concessional contributions cap. The Tribunal concluded that Mr Azer's motives were admirable however inadvertent mistakes are not special circumstances and that in a system where there are limits on what can be contributed to a superannuation fund while retaining concessional treatment, to waive compliance would provide the taxpayer with an advantage in the form of being allowed to contribute extra to his superannuation funds.
Campbell v Superannuation Complaints Tribunal  FCA 808
This decision from the Federal Court of Australia involved an appeal from a determination of the Superannuation Complaints Tribunal. The applicant, a member of the Military Superannuation Benefit Scheme (MSBS) was discharged from the Australian Defence Force on medical grounds and became entitled to an invalidity benefit from the Scheme. The issue dealing with the splitting of superannuation interests in matrimonial causes, was whether an invalidity pension is a defined benefit interest for the purposes of the Family Law Act 1975.
The Appellant had sought information regarding his MSBS interest for the purpose of a superannuation valuation under s90MZB(2) of the Family Law Act 1975 and claimed that his invalidity pension benefit was not a superannuation interest on the basis that superannuation was a benefit paid in respect of age retirement, whereas his invalidity pension benefit was paid by virtue of a medical condition. The court held that an invalidity pension is not a defined benefit interest. However, the Court held that the invalidity benefit was still a superannuation interest for the purposes of the Family Law Act, and should have been valued for Family Law purposes as an accumulation interest.
This is the first reported case where this issue has been considered by the Courts. It affects all current matters before the Family Court and Federal Circuit Court involving pensions which are being received due to invalidity. It is also relevant to any superannuation splitting agreements.