Superannuation contributions tax: employer eligible termination payments roll-overs

Is the employer contributed amount (defined benefits) reported by a superannuation provider under subsection 8(4) Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCT Act) a post-20 August 1996 component of an employer eligible termination payment roll-over as defined under subparagraph 8(2)(c)(iii) of the SCT Act ?

No. The employer contributed amount (defined benefits) is not a surchargeable contribution as defined under subparagraph 8(2)(c)(iii) of the SCT Act. It is a 'surchargeable contribution' as defined in subsection 8(4) of the SCT Act.

Under the member's separation agreement with his employer signed in November 1996, the employer agreed to make a contribution to the preserved section of the member's superannuation provider to assist the employee/member in future endeavours and in recognition of past service. The member's account was to be credited with the gross contribution amount inclusive of the 15% contributions tax. The provider reported the contribution amount as an employer contributed amount (defined benefits) for the 1997 financial year. The member stated in his objection request to the Commissioner of Taxation that he did not have the option to take the contribution as a cash payment.

Subsection 13(2) of the SCT Act requires a provider to report to the Commissioner, details of a member's total contributed amounts for a financial year including the member's surchargeable contributions.

Subsection 8(3) of the SCT Act includes as surchargeable contributions for a member of a defined benefits superannuation scheme, amounts that constitute the actuarial value of the benefits and expenses provided in respect of a member for the financial year.

For the 1997 financial year, the surchargeable contributions for a member of a defined benefits provider are calculated by reference to the amount worked out using the formula as set out in subsection 8(4) of the SCT Act.

The member's defined benefits provider reported the member's contributed amount to the Commissioner as an employer contributed amount (defined benefits) for the 1997 financial year. The amount was not reported as a post-20 August 1996 component of an employer ETP roll-over as defined under subparagraph 8(2)(c)(iii) of the SCT Act.

There is no discretion under the SCT Act to allow the Commissioner to exclude an amount reported under subsection 8(4) of the SCT Act from being a surchargeable contribution.