Issue
Is a superannuation pension that commenced before 1 July 1990 from a State Parliamentary Superannuation Scheme and was suspended due to the election of the member to Commonwealth Parliament and any future commutation reportable for RBL purposes.
Decision
No, a superannuation pension that commenced before 1 July 1990 from a State Parliamentary Superannuation Scheme and was suspended due to the election of the member to Commonwealth Parliament and any future commutation should not be reported for RBL purposes.
Facts
The taxpayer was a Member of a State Parliament before 1990.
He left the State Parliament and commenced a pension from the State Parliamentary Superannuation Scheme.
He received the pension for a short time and then was elected to the Commonwealth Parliament.
Under the provisions of the State Parliamentary Superannuation Scheme his pension was suspended until he is no longer a Member of Parliament.
Reasons for Decision
Subsection 140M(1) of the Income Tax Assessment Act 1936 (ITAA 1936) requires that a when a payer commences to make payments of a superannuation pension on or after 1 July 1994 and the pension counts towards the person's RBLs then the payer must notify the Commissioner.
Section 140J of the ITAA 1936 states that a pension commences to be paid at the beginning of the commencement day.
Subsection 140ZC(1) of the ITAA 1936 lists the benefits that count towards a person's RBLs subject to certain exclusions listed in subsection 140ZC(2) of the ITAA 1936. Those benefits include superannuation pensions where the commencement day is after 15 February 1990. Commencement day is defined in section 140C of the ITAA 1936 as the first day of the period to which the first payment relates.
The superannuation fund has indicated that the member's pension commenced to be paid before it was suspended.
As the superannuation pension commenced to be paid before 16 February 1990 it is not reportable for the purposes of RBL.
Commutations of superannuation pensions that commenced before 16 February 1990 are not required to be reported either as they are not counted ( paragraphs 140ZC(2)(b)&(c) of the ITAA 1936).