ATO ID 2002/418: Superannuation Contributions Tax: relief from assessed surcharge liability and interest imposed on a member's surcharge debt account
Date of decision: 09 August 2001
Year of income: Year ended 30 June 1997
Business line: Superannuation

Issue
Does the Commissioner of Taxation (Commissioner) have any discretion under the provisions of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA), to change or provide relief from the surcharge liability calculated in the member's assessment or any applicable interest on the member's surcharge debt account?

Decision
No. The Commissioner has no discretion under the provisions of the SCTA to change or grant relief from a tax liability that has been correctly calculated or waive any applicable interest on the member's surcharge debt account.

Facts
The member's provider is an unfunded defined benefits provider and reported surchargeable contributions for the member for the relevant financial year. The Commissioner calculated the member's adjusted taxable income (ATI) for the financial year to include the surchargeable contributions reported by the provider for the financial year. The Commissioner issued a superannuation contributions surcharge assessment in respect of the surchargeable contributions reported for the relevant financial year. The member sought relief from the surcharge liability raised and any accrued interest on their surcharge debt account on the basis that they believed the surcharge was levied retrospectively on their preserved benefit.

Reasons for decision
Summary: The Commissioner is required to administer the superannuation contributions surcharge legislation in accordance with the provisions of the SCTA. The surcharge is payable on surchargeable contributions where a member's ATI exceeds the surcharge threshold for the financial year. ATI is generally defined as the member's taxable income plus the total amount of the member's surchargeable contributions for the financial year, less certain employer lump sum termination payments. The surcharge liability in respect of the member has been correctly calculated based on the information reported by the superannuation provider. The surcharge has not been levied retrospectively, as the member's employer did make superannuation contributions into their fund for the relevant financial year. Subsection 16(1) of the SCTA 'makes provision for the deferment of the liability of a superannuation (unfunded defined benefits) provider to pay surcharge on the surchargeable contributions of a member of the relevant unfunded defined benefits superannuation scheme, and for interest to accrue on the deferred amount.' Subsection 16(2) of the SCTA requires the provider to keep a surcharge debt account for each member to record any surcharge that is assessed for each financial year. The provider is also required to debit the account for interest on any debit balance in the account as at 30 June each year under subsection 16(4) of the SCTA. A member may voluntarily make payments, at any time, to reduce their surcharge debt account. It is the superannuation provider that administers the debt account and debits any interest accrued as required under the SCTA. The Commissioner has no discretion to waive any interest that may be debited by the provider on a surcharge debt account under the provisions of the surcharge legislation.

Legislative references: Superannuation Contributions Tax (Assessment and Collection) Act 1997 section 15 subsection 16(1) subsection 16(2) subsection 16(4) section 43
Subject references: Superannuation contributions tax Superannuation provider - defined benefits Surchargeable contributions Defined benefits superannuation funds