Military Superannuation streamlined amendment process

A number of veterans and stakeholder groups have engaged the ATO in recent weeks to enquire about the progress of the military superannuation streamlined amendment process.

We encourage those who are interested in receiving updates on the streamlined amendment process to regularly check-in with the military superannuation webpage on ato.gov.au. To complement the website information, we have also prepared an update with some key messages that you may wish to share with your members. We have prepared this in a format where you will be able to cut and paste the ATO messages into your relevant publications/newsletters so that you can share them with your members. Additionally, if there are any other concerns that are raised, please let us know and we can consider them for the next round of key messages if appropriate.

Military superannuation streamlined amendment process update

In December 2020, the Full Federal Court found that invalidity pensions payable under the Defence Force Retirement and Death Benefits (DFRDB) Scheme and the Military Superannuation and Benefits (MSB) Scheme that started on or after 20 September 2007 should be taxed as superannuation lump sum payments. Following the change in tax treatment, the ATO has been processing amendments for past tax returns of impacted individuals who have opted-in as part of its remediation program.

As at the end of September, the ATO has amended over 4,000 income tax assessments for individuals that either opted-in to the first phase of its amendment process or had an existing objection with them. This equates to around 60% of the individuals who opted-in to having their assessment(s) amended. If you initially opted-in to but your amendments have yet to be processed, it is likely because your circumstances are more complex, such as if you:

·         receive disability superannuation benefits or a lump sum payment in arrears

·         have multiple super schemes

·         have declared bankruptcy.

 If you opted-in but have not yet had your amendments finalised, you do not need to call the ATO for an update. The ATO is working through the remaining amendments and expects to have all amendments completed shortly. In the meantime, you should make sure details such as your phone number, email address and your bank account information are correct. These can be updated on ATO online via myGov. Updating your details now will make it easier for ATO officers to contact you if they require additional information.  Importantly, if you are affected by the Court decision and did not opt-in under the ATO’s initial amendment process, it’s not too late to have your assessments for prior years amended.

Next round of amendments

The ATO will begin the next round of its amendment program from late October by contacting affected individuals who did not initially opt-in. There are several things you should do now if you would like to have your assessments amended. These include:

• ensuring your contact details are up to date, so you do not miss the correspondence from the ATO. This will also allow the ATO to contact you if they require additional information.

• applying to Commonwealth Superannuation Corporate (CSC) for a determination if you believe you qualify for a disability concession. By doing this before you take part in the streamlined amendment process you will ensure that that the disability concession is taken into account as part of your amendments upfront.

• lodging any outstanding income tax returns as the ATO cannot amend what has not been lodged.

• Consider seeking financial advice in relation to your personal circumstances as it is your choice as to whether you want to participate in the ATO’s amendment process.

 The ATO updates its website regularly at ato.gov.au/militarysuper