Issue
For the purposes of calculating a member's 'adjusted taxable income' (ATI) under section 7A or section 7B of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCT Act), is the member's service pension income amount which formed part of their taxable income for the financial year correctly included in ATI?
Decision
Yes. The member's service pension income amount is correctly included for the purposes of calculating their ATI under section 7A or section 7B of the SCT Act.
Facts
The member's taxable income for the financial year included service pension income. As the member's ATI for superannuation contributions surcharge purposes was greater than the surcharge threshold for the financial year, surcharge was payable on the member's surchargeable contributions.
Reasons for Decision
A member's ATI for a financial year is determined under section 7A or section 7B of the SCT Act (formerly section 43 of the SCT Act). A member's ATI is generally their taxable income for the financial year plus their total surchargeable contributions.
When calculating ATI, specific amounts are excluded from a member's taxable income such as lump sum superannuation fund payments. Under section 43 of the SCT Act, 'taxable income' of a member for a year of income means the member's taxable income as assessed under the Income Tax Assessment Act 1936 .
As service pension income amounts form part of taxable income but is not specifically excluded from taxable income for the purposes of calculating ATI, the member's service pension income amount is correctly included in the calculation of their ATI for the financial year.