Private ruling: Income protection insurance premiums deduction
Published: September 2012
Ruling period: 1 July 2005 to 30 June 2012
Date scheme commenced: 1 July 2005

Ruling: Q1: Are you eligible to claim a deduction for income protection insurance premiums paid to a superannuation fund? Advice/Answers: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision: Summary: The insurance policy is owned by the Fund as a group cover and therefore is not owned by you. Superannuation funds pay their expenses by deducting various amounts from each members account. You are not eligible to claim a deduction for premiums relating to income protection insurance as they are expenses of the superannuation fund. | Detailed Reasoning - Detailed reasoning: As described in the facts, you have an income protection policy attached to your member account in the Fund. The insurance provider for the Fund is an overseas assurance company. Although the premiums for this policy are deducted from your member account, the policy is actually owned by the Fund as it is a group life cover. It is not an individual policy owned by you and it is the Fund that pays the premiums to the overseas company. Superannuation funds pay their expenses such as income tax, insurance and administrative costs by deducting various amounts from each member's account. Similarly, a fund's assessable income includes the contributions made for its members. As the expense is not yours, you cannot claim a deduction. | Detailed Reasoning - Conclusion: You are not eligible to claim a deduction for premiums relating to income protection insurance paid by your superannuation fund.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You are a member of a large superannuation (the Fund). | The Fund provides an income protection cover policy (the Policy) as part of its member benefits. | The insurance provider for Fund is an overseas assurance company. | The Fund has advised the insurance Cover on a member's account is in the member's name but the cover is a group life cover offered through the insurance company to the Fund's members and the policy is owned by the Fund. | The premiums for the policy are deducted from your member account within the Fund