Invalidity Pensions – Military Superannuation and Benefits Scheme •

SPR IA currently has 95 private ruling applications (as at 9 March 2016) from individuals who are in receipt of an ‘invalidity pension’ under the Military Superannuation and Benefits Scheme (MSBS).

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The applicants have been sharing information relating to the matter on a Facebook page – it is believed that this is the primary reason for the relatively large number of private ruling applications being submitted. Recently private ruling applications from members of the Defence Force Retirement and Death Benefit Scheme have been submitted – these applications raise the same issues as the applications in relation to the MSBS.

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related to the topic.

RDR is keeping an eye out for further objections

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ComSuper administers the MSBS and has been issuing superannuation income stream PAYG payment summaries to these pensioners. The payment summaries generally show a ‘taxable component – taxed element’ and a ‘taxable component – untaxed element’.

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Some of the ruling applicants have reported their pensions inconsistently with the PAYG payment summaries issued to them and some have sought amendments to previous ITRs.

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The majority of the ruling applications are almost identical – the individuals believe that the payments are employer termination payments consisting of an invalidity component that should be tax-free.

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to lodge a private ruling application was given a judgment by the Family Law Court that concluded that his invalidity pension was not paid from a superannuation interest. The applicant has used this judgment to support his application. The judgment, however, does not provide any legal reasoning to support the conclusion made by the judge.

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There is currently some uncertainty concerning how the payments of the invalidity pensions are made in accordance with the SISR payment standards (i.e. concerning the relevant condition of release) and whether the payments are income stream / pension payments or a series of superannuation lump sums. If the payments are a series of superannuation lump sum payments, the recipient may be able to access the low rate cap amount.

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TCN’s preliminary view is that the payments are not employer termination payments. Their analysis of the information currently available indicates that, at best, the payments will be superannuation income stream benefits (which would be consistent with the way ComSuper have been treating the payments). If the payments are not income stream benefits it is likely they will be ordinary assessable income.

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In an attempt to gain further clarity on the issue, TCN sent a series of questions to ComSuper on 11 February 2016. ComSuper advised on 8 March 2016 that they propose to put together a comprehensive paper on this issue for discussion rather than respond to each of the questions posed. They will keep us up to date with the progress of the paper.

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TCN is currently preparing the papers that will be provided to

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We still need to develop a resolution strategy for the remaining ruling requests. There may be different tax outcomes for the different ruling applicants. However, we think the best course is to attempt to resolve the issue with and then see what leverage can be drawn for the other cases.

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It should be noted that there may be SIC and penalty implications for individuals who have lodged their ITRs otherwise than in accordance with the PAYG payment summaries that were issued to them should it be shown that the payment summaries were, in fact, correct.

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Talking Points Federal Court decision The Federal Court handed down a decision in Campbell v Superannuation Complaints Tribunal [2016] FCA 808 on 15 July 2016 concerning provisions dealing with the splitting of superannuation interests under Family Law Act 1975 to invalidity pension payments made under the MSBS. The Federal Court decided, amongst other things, that the invalidity pension benefits were made from a superannuation interest. This is consistent with the ATO position that the benefits paid are superannuation benefits. The decision does not impact our view regarding the Income Tax treatment of the payments.

We have considered Justice Logan’s decision regarding the categorisation of the interest as an ‘accumulation interest’ rather than a ‘defined benefit’ interest. •

It should be noted that the definition of ‘defined benefit’ considered by the Federal Court is different to the meaning of a defined benefit interest set out in s.291-175 of the ITAA 1997. Section 291-175 deals with rules concerning the making of concessional contributions to a superannuation fund and does not impact on the taxation treatment of superannuation benefits

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In Campbell, Justice Logan interpreted regulation 5(2) of the Family Law Superannuation Regulations (FLSR) which specifically excludes disability and invalidity payments from the definition of a ‘defined benefit’ interest for the purposes of the Family Law. Accordingly Justice Logan ruled that it was an ‘accumulation’ interest. There is no similar exclusion contained in the Income Tax Law.

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The definition of the interest is relevant to the making of contributions and the calculation of the value of the superannuation interest (particularly relevant for the separation of assets in the Family Law context). It is not relevant to the ultimate tax treatment of pension payments received by the members. The subsequent taxation treatment of the invalidity pension payment depends on the taxed and untaxed elements of the taxable component of the payment. This is not impacted by whether the superannuation interest is an accumulative interest or a defined benefits interest.

Ruling Process Due the complexity of the issues raised we have contacted you to negotiate an extended due date for providing a response. These issues have been escalated to the complex technical area for consideration.

We will continue to communicate with you about the progress of your application and aim to provide you with written advice in due course . • Where you no longer agree to extending the due date for your application, you may lodge a written notice that the ruling be made. We have 30 days from when we receive the written notice to either provide the private ruling or tell you that we decline to rule on the matter. • If you don't receive a private ruling or our written reasons for declining to rule within 30 days, you can object to our failure to make a private ruling. As part of the objection, you are required to lodge the draft private ruling. • If the client wishes to proceed with a ruling, when we commence the ruling we will first need to: o clarify the period/s for which they are seeking the ruling and ask them to confirm that they agree to the following questions (in writing for clarity): THESE 5 QUESTIONS are not to be provided over the phone and are not Q&A based. They are developed by TCN and will be sent to Applicants so that they understand what questions we will answer when we are at the stage of providing ruling responses. Question 1 Are the payments of the invalidity pension paid to you under the rules of the Military Superannuation and Benefits Scheme (MSBS) established by trust deed under the Military Superannuation and Benefits Act 1991 (MSBA) superannuation benefits as that term is defined in section 307-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? Question 2 If yes to the previous question, are the payments of the invalidity pension paid to you excluded by section 307-10 of the ITAA 1997 from the definition of superannuation benefit in section 307-5 of the ITAA 1997? Question 3 If no to the previous question, does the invalidity pension constitute a superannuation income stream as that term is defined in section 307-70 of the ITAA 1997 and regulation 995-1.01(1) of the Income Tax Assessment Regulations 1997 (ITAR)? Question 4 If yes to the previous question, can you make the election in regulation 995-1.03 of the ITAR, before a particular payment of the invalidity pension is made, that the payment is not to be treated as a superannuation income stream benefit? Question 5 Is the invalidity pension payable to you under the rules of the MSBS an employment termination payment? What we will rule on and not rule on • Decline to rule for any year outside the period of review – advising that they will need to lodge an objection for these periods

• Issue the ruling and, for any periods for which they have lodged/amended an ITR in a way contrary to the ATO view, advise that we will be amending their assessments and, if they disagree with our ruling for these periods they will need to object to the amended assessment as they can’t object to our ruling for those years • If the client wishes to lodge an objection the client may visit the following site on our ATO webpage. https://www.ato.gov.au/forms/objection-form---for-taxpayers/ (NAT13471) • In addition, if they wish to continue with the ruling we will require further clarification from the client on issues including the years that the client seek us to rule on, and the type of benefit the client have received. We will write or email to the client the additional information we require. • Differences between the letter and seeking to Object vs the Ruling. o The letter contains the same advice and would apply in the same way as if the Ruling had issued o An objection is faster and more efficient, as the client will be objecting to an assessment that already exists, rather than waiting for the ruling to issue and then objecting to ruling/assessment. The objection process should only take 56 days to resolve.

Information for Media Inquiries into Military Superannuation Pensions Generic Response The ATO has received a number of requests regarding the tax treatment of invalidity payments received by ex-service personnel under the Military Superannuation and Benefits Scheme (MSBS). The ATO cannot comment on individual cases, however, we have been considering the tax treatment of the invalidity payments and communicating with the individuals who have lodged requests. The ruling applicants have been contacted (commencing 13 May 2016) advising them of our intention to issue some general advice. However, the anticipated issuing of the general advice has been delayed due to consultation with Commonwealth Superannuation Corporation (CSC) who administers the MSBS regarding the taxation treatment of the superannuation income stream and a Federal Court case that was seen to be important by the applicants for the private rulings. The Federal Court decision concerning invalidity payments made by the CSC to former members of the Australian Defence Force in the context of the Family Law Act 1975 was handed down on 15 July 2016. We do not consider this decision impacts our positions concerning the Income Tax treatment of the invalidity pension payments made under the MSBS. Background Details •

The ATO have received nearly 200 ruling requests from ex-service personnel who receive an invalidity pension questioning the tax treatment of their invalidity payments under the MSBS.

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The individuals have put forward the position that the payments are not superannuation benefits based on comments made in a decision of the Family Court. They are seeking to have their entitlements taxed as an eligible termination payment, due to invalidity, as opposed to being classified as a superannuation income stream.

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The effect of this would be a more favourable tax treatment of their payments. However, the ATO considers that under the current law, the invalidity pension payment is excluded from being categorised as an ‘employment termination payment’.

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We consider that these payments are superannuation benefits which are taxed under the income tax legislation. This is consistent with the approach taken by the CSC in administering the scheme.

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CSC administers the MSBS and pays ‘invalidity pensions’ to approximately 7,500 individuals. CSC has been issuing superannuation income stream PAYG payment summaries to these pensions

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We issued one private ruling on 13 May 2016 setting out our views on the issues, including the ability to make an election to treat the pension payments as superannuation lump sum payments.

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The Federal Court handed down a decision in Campbell v Superannuation Complaints Tribunal [2016] FCA 808 on 15 July 2016 concerning provisions dealing with the splitting of superannuation interests under the Family Law Act 1975 to invalidity pension payments made under the MSBS.

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The Federal Court decided, amongst other things, that the invalidity pension benefits were made from a superannuation interest. This is consistent with the ATO position that the benefits paid are superannuation benefits. The decision does not impact our view regarding the Income Tax treatment of the payments.

Dear Mr/Ms/Mrs xxx Your private ruling request – further information (Ref: XXXXX) We are writing to you in response to your application for a private ruling regarding invalidity pension payments you receive under the Military Superannuation and Benefits Scheme (MSBS). This is further to the advice provided to you on that we were seeking to be able to confirm our position. We appreciate there has been a lengthy delay in responding to your query and the inconvenience this may have caused you. However, it was important to come back to you with information which would provide a common understanding of this matter from the Australian Taxation Offices (ATO’s) position. We have received a number of queries concerning the tax treatment of these payments asking whether the payments are superannuation benefits or employment termination payments. This letter seeks to clarify to you how the ATO views the application of the current law and its application for the tax treatment and impact on these invalidity pension payments. We are sending this to you for you to consider for your own circumstances. Note that we have not taken into account your individual circumstances that may impact on the finalisation of your private ruling application. A more detailed explanation is referenced at Attachment A. Under the current law, the invalidity pension payments are superannuation income stream benefits as defined in the income tax law, regardless of when it commenced. A person may elect to treat one or more of the payments as a superannuation lump sum instead of a superannuation income stream benefit. If you make this election, it alters the taxation treatment of the payments and it may be important that you seek professional advice to ensure you appreciate the impacts on your personal circumstances. We do consider that under the current law, the invalidity pension payment is excluded from being categorised as an ‘employment termination payment’. Specifically, it is noted that the MSBS is a public sector superannuation scheme and a complying superannuation fund for the purposes of the superannuation and income tax laws. Therefore, each individual’s entitlement to the pension payments from MSBS arise because a fund member retires due to invalidity. The benefits paid from the MSBS are ‘superannuation benefits’ as defined in the income tax law. We are aware that the Federal Court handed down a decision in Campbell v Superannuation Complaints Tribunal [2016] FCA 808 on 15 July 2016 concerning provisions dealing with the splitting of superannuation interests under the Family Law Act 1975 to invalidity pension payments made under the MSBS. The Federal Court decided, amongst other things, that the invalidity pension benefits were made from a superannuation interest. This is consistent with the ATO position that the benefits paid are superannuation benefits. We are aware that some recipients of the invalidity pension benefits may consider that the Federal Court decision concerning whether the superannuation interest is a defined benefit interest for Family Law purposes impacts the income tax treatment of the payments. We would like to

confirm that this part of the decision does not impact our view regarding the income tax treatment of the payments.

To ensure that you have time to consider the further explanation of the considerations in the application of the law, it would be appreciated if within 21 days from the date of this letter you would confirm if you would like to continue with your application for a private ruling. As part of this notification you may wish to take the opportunity to provide further information concerning your circumstances and clarify the issues to be addressed. We will then proceed to finalise your private ruling request. Further, you may wish to consider whether the rules concerning a ‘disability superannuation benefit’, which may be taxed less than an ordinary superannuation benefit, are relevant to your circumstances. A more detailed explanation is referenced at Attachment A.

If you have any questions, please phone:  

Xxx xxx on (0x) xxxx xxxx; or 13 28 69 between 8.00am and 5.00pm, Monday to Friday, and ask for xxx xxxx on extension xxxx.

When you phone us, please have the reference number listed above ready so we can quickly access your case details.

Yours sincerely

James O’Halloran Xxxx Encl.

Attachment A Detailed explanation of consideration In relation to your private ruling application there are four key areas of the application of law that the ATO needs to consider. Are invalidity pension payments superannuation benefits? Yes. Item 1 of the table in subsection 307-5(1) of the Income Tax Assessment Act 1997 effectively states that a ‘superannuation benefit’ includes a payment made to you from a superannuation fund because you are a fund member. We consider the reference to fund member includes former members. The MSBS is a public sector superannuation scheme and a complying superannuation fund for the purposes of the superannuation and income tax laws. Each individual’s entitlement to the invalidity pension payments arises because they were a fund member who retired due to invalidity. Therefore the benefits paid from the MSBS are ‘superannuation benefits’ as defined in the income tax law. By way of reference, the Administrative Appeals Tribunal (Michael James Hammerton v Comcare Australia [1995] AATA 63) reached a similar conclusion about the scheme established under the Defence Force Retirement and Death Benefits Act 1973. That Act also provides for certain invalidity benefits to retired service personnel. While a ‘superannuation benefit’ excludes amounts payable because of a person’s temporary inability to engage in gainful employment 1, the invalidity pension is not payable because they are temporarily unable to work. An individual receives an invalidity pension because they have been retired from the Australian Defence Force due to incapacity, and because their capacity for civil employment has been diminished. Even though the invalidity pension may cease, this does not mean that their inability to work is temporary. Therefore, invalidity pension payments are not excluded from the definition of ‘superannuation benefit’ As stated above, the decision in Campbell v Superannuation Complaints Tribunal is consistent with our position that the benefits paid from MSBS are superannuation benefits. Are invalidity pension payments superannuation income stream benefits or superannuation lump sums? Under the current law, the invalidity pension payments are superannuation income stream benefits as defined in the income tax law regardless of when it commenced. However, you may elect to treat one or more of the payments as a superannuation lump sum instead of a superannuation income stream benefit. You must make this election before the payment is made to you. If you make this election, it alters the taxation treatment of the payments.

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See paragraph 307-10(a) of the Income Tax Assessment Act 1997.

Given the implications you may wish to consider seeking professional advice to ensure that you are informed of the impact of a decision to elect to treat one or more of the payments as a superannuation lump sum in your individual circumstances. Are invalidity pension payments employment termination payments? No. The reason for this is that an invalidity pension payment cannot be an employment termination payment. A payment that is either a superannuation benefit or a pension is excluded under the law from being an employment termination payment. In addition, an employment termination payment must occur within 12 months after employment has terminated. 2 What is a disability superannuation benefit? A benefit will be a disability superannuation benefit if:  it is paid to an individual who suffers from ill-health (whether physical or mental); and  two legally qualified medical practitioners certify that the individual is unlikely to ever be gainfully employed in a capacity for which they are reasonably qualified because of education, experience or training. A superannuation benefit that is a ‘disability superannuation benefit’ may be taxed less than an ordinary superannuation benefit. You may wish to consider whether this is relevant to your circumstances.

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See section 82-130 and section 82-135 of the Income Tax Assessment Act 1997.

Talking Points Federal Court decision The Federal Court handed down a decision in Campbell v Superannuation Complaints Tribunal [2016] FCA 808 on 15 July 2016 concerning provisions dealing with the splitting of superannuation interests under Family Law Act 1975 to invalidity pension payments made under the MSBS. The Federal Court decided, amongst other things, that the invalidity pension benefits were made from a superannuation interest. This is consistent with the ATO position that the benefits paid are superannuation benefits. The decision does not impact our view regarding the Income Tax treatment of the payments.

We have considered Justice Logan’s decision regarding the categorisation of the interest as an ‘accumulation interest’ rather than a ‘defined benefit’ interest. •

It should be noted that the definition of ‘defined benefit’ considered by the Federal Court is different to the meaning of a defined benefit interest set out in s.291-175 of the ITAA 1997. Section 291-175 deals with rules concerning the making of concessional contributions to a superannuation fund and does not impact on the taxation treatment of superannuation benefits

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In Campbell, Justice Logan interpreted regulation 5(2) of the Family Law Superannuation Regulations (FLSR) which specifically excludes disability and invalidity payments from the definition of a ‘defined benefit’ interest for the purposes of the Family Law. Accordingly Justice Logan ruled that it was an ‘accumulation’ interest. There is no similar exclusion contained in the Income Tax Law.

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The definition of the interest is relevant to the making of contributions and the calculation of the value of the superannuation interest (particularly relevant for the separation of assets in the Family Law context). It is not relevant to the ultimate tax treatment of pension payments received by the members. The subsequent taxation treatment of the invalidity pension payment depends on the taxed and untaxed elements of the taxable component of the payment. This is not impacted by whether the superannuation interest is an accumulative interest or a defined benefits interest.

Next Steps In the week beginning 15 August, start contacting taxpayers to confirm that they have received the general advice email and to determine how they wish to proceed with their ruling application. .

• If the client wishes to proceed with a ruling, when we commence the ruling we will first need to: o clarify the period/s for which they are seeking the ruling and ask them to confirm that they agree to the following questions (in writing for clarity): THESE 5 QUESTIONS are not to be provided over the phone and are not Q&A based. They are developed by TCN and will be sent to Applicants so that they understand what questions we will answer when we are at the stage of providing ruling responses. Question 1 Are the payments of the invalidity pension paid to you under the rules of the Military Superannuation and Benefits Scheme (MSBS) established by trust deed under the Military Superannuation and Benefits Act 1991 (MSBA) superannuation benefits as that term is defined in section 307-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? Question 2 If yes to the previous question, are the payments of the invalidity pension paid to you excluded by section 307-10 of the ITAA 1997 from the definition of superannuation benefit in section 307-5 of the ITAA 1997? Question 3 If no to the previous question, does the invalidity pension constitute a superannuation income stream as that term is defined in section 307-70 of the ITAA 1997 and regulation 995-1.01(1) of the Income Tax Assessment Regulations 1997 (ITAR)? Question 4 If yes to the previous question, can you make the election in regulation 995-1.03 of the ITAR, before a particular payment of the invalidity pension is made, that the payment is not to be treated as a superannuation income stream benefit? Question 5 Is the invalidity pension payable to you under the rules of the MSBS an employment termination payment?

What we will rule on and not rule on • Decline to rule for any year outside the period of review – advising that they will need to lodge an objection for these periods • Issue the *ruling and, for any periods for which they have lodged/amended an ITR in a way contrary to the ATO view, advise that we will be amending their assessments and, if they disagree with our ruling for these periods they will need to object to the amended assessment as they can’t object to our ruling for those years • If the client wishes to lodge an objection the client may visit the following site on our ATO webpage. https://www.ato.gov.au/forms/objection-form---for-taxpayers/ (NAT13471) •

In addition, if they wish to continue with the ruling we will require further clarification from the client on issues including the years that the client seek us to rule on, and the

type of benefit the client have received. We will write or email to the client the additional information we require. •

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Differences between the letter and seeking to Object vs the Ruling. o The letter contains the same advice and would apply in the same way as if the Ruling had issued o An objection allows for an appeal (AAT or Fed Court) be lodged (should they disagree with the objection outcome) straight away. Whereas, if they disagree with the ruling and an assessment already exists, they couldn’t appeal the decision until after an objection decision had been issued. The objection process should only take 56 days to resolve.

FEDERAL COURT OF AUSTRALIA Campbell v Superannuation Complaints Tribunal [2016] FCA 808 File number:

QUD 178 of 2016

Judge:

LOGAN J

Date of judgment:

15 July 2016

Catchwords:

ADMINISTRATIVE LAW – where applicant in receipt of invalidity pension benefit pursuant to Military Superannuation Benefits Scheme – whether invalidity pension is a defined benefit interest – whether entitlement to invalidity pension under the Scheme is a superannuation interest – meaning of superannuation interest – whether respondent was obliged to furnish applicant with information which valued the interest as a defined benefit interest – whether Tribunal erred in affirming respondent’s decision to treat applicant’s complaint as withdrawn – Family Law Act 1975 (Cth), Pt VIIIB, Family Law (Superannuation) Regulations 2001, Military Superannuation Benefits Act 1991 (Cth) FAMILY LAW – where applicant in receipt of invalidity pension benefit pursuant to Military Superannuation Benefits Scheme – whether invalidity pension is a defined benefit interest – whether entitlement to invalidity pension under the Scheme is a superannuation interest – meaning of superannuation interest – whether respondent was obliged to furnish applicant with information which valued the interest as a defined benefit interest – whether Tribunal erred in affirming respondent’s decision to treat applicant’s complaint as withdrawn – Family Law Act 1975 (Cth) Pt VIIIB, Family Law (Superannuation) Regulations 2001, Military Superannuation Benefits Act 1991 (Cth)

Legislation:

Defence Force Retirement and Death Benefits Act 1973 (Cth) Family Law (Superannuation) Regulations 2001 regs 5, 5(1), 5(1)(a), 5(1)(b), 5(1A), 5(2), 11, 12, 64, 64(7), 64A Family Law Act 1975 (Cth) ss 79, 90MB(1)(c) 90MD, 90ME, 90ME(1)(a), 90ME(2),90MZB, 90MZB(2), 90MZB(3) Governance of Australian Government Superannuation Schemes Act 2011 (Cth) s 4 Military Superannuation and Benefits Act 1991 (Cth) s 4 Military Superannuation and Benefits Rules r 28

Superannuation (Resolution of Complaints) Act 1993 (Cth) ss 14AA, 14AA(2), 22(3)(b), 46 Superannuation Industry (Supervision) Act 1993 (Cth) Cases cited:

Board of Trustees of the State Public Sector Superannuation Scheme v Edington [2011] FCAFC 8; (2011) 119 ALD 472 C v B-H & Anor [2005] FamCA 431 Hickey v Hickey [2003] FamCA 395 McKenzie v McKenzie [1971] P 33 Scott v Commissioner of Taxation (No 2) (1966) 40 ALJR 265 Simpson & Simpson [2014] FamCA 521

Date of hearing:

3 May 2016

Date of last submissions:

31 May 2016

Registry:

Queensland

Division:

General Division

National Practice Area:

Administrative and Constitutional Law and Human Rights

Category:

Catchwords

Number of paragraphs:

55

Counsel for the Applicant:

The applicant appeared in person (assisted by a McKenzie friend)

Counsel for the Respondents:

Mr R C Schulte

Solicitor for the Respondents:

Australian Government Solicitor

ORDERS QUD 178 of 2016 BETWEEN:

BRADLEY JAMES CAMPBELL Applicant

AND:

SUPERANNUATION COMPLAINTS TRIBUNAL First Respondent COMMONWEALTH SUPERANNUATION CORPORATION Second Respondent

JUDGE:

LOGAN J

DATE OF ORDER:

15 JULY 2016

THE COURT ORDERS THAT: 1.

The notice of appeal from the first respondent should be read as raising the following

questions of law: (a)

Is the applicant’s entitlement to receive an invalidity pension benefit, pursuant to the

Military Superannuation Benefit Scheme (MSBS) for which provision is made by the Military Superannuation and Benefits Trust Deed (the Deed), made by the responsible Minister in accordance with the requirement found in s 4 of the Military Superannuation and Benefits Act 1991 (Cth) a “superannuation interest” as defined by s 90MD of the Family Law Act 1975 (Cth) (Family Law Act)? (b)

If the answer to question 1(a) is, “Yes”, was the second respondent, in its capacity as

the trustee of the MSBS under the Deed, in responding to a request by the applicant under s 90MZB of the Family Law Act, obliged by s 90MZB(3) of that Act and the Family Law (Superannuation) Regulations 2001 (FLSR) to furnish him with information which valued that interest on the basis that it was a “defined benefit interest” as defined by reg 5 of the FLSR or, instead, on the basis that it was, for the purposes of those regulations, an “accumulation interest”? 2.

Those questions should be answered as follows:

(a)

Yes; and

(b)

The applicant ought to have been furnished with information by the second

respondent, pursuant to its obligation under s 90MZB(3) of the Family Law Act, on the

- ii footing that this particular interest was an “accumulation interest”, not a “defined benefit interest” in terms of the definitions of those terms in the FLSR. 3.

The first respondent’s decision of 1 February 2016 to treat the applicant’s complaint

in respect of the second respondent’s decision as withdrawn pursuant to s 22(3)(b) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) is set aside and the matter is remitted to the first respondent for reconsideration of the second respondent’s decision in accordance with the answers given to the questions of law and the Court’s reasons for judgment.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT LOGAN J: 1

Mr Bradley Campbell is a former member of the Australian Defence Force (ADF).

He was discharged from the ADF on medical grounds on 6 December 2007. That brought to an end a period of service to Australia in that military capacity which commenced on his enlistment on 2 May 1994. 2

One sequel to Mr Campbell’s discharge on that basis was that he became entitled to

invalidity benefits under a Military Superannuation Benefit Scheme (MSBS) for which provision is made by the Military Superannuation and Benefits Trust Deed (the Deed), made by the responsible Minister in accordance with the requirement found in s 4 of the Military Superannuation and Benefits Act 1991 (Cth). That entitlement arose in the following way. 3

By cl 3 of the Deed, the Fund from which benefits are paid in accordance with its

terms is presently consigned to the administration of the Commonwealth Superannuation Corporation (CSC).

CSC is a body corporate continued in existence by s 4 of the

Governance of Australian Government Superannuation Schemes Act 2011 (Cth). CSC has become the second and only active party respondent to the present proceeding. On 31 January 2008, a delegate of the predecessor of the CSC in the administration of the MSBS Fund pursuant to the Deed, the Military Superannuation and Benefits Board of Trustees No. 1, determined that Mr Campbell’s classification on his discharge from the ADF was, for the purposes of the Deed, Class B (30%). As a result of this determination, Mr Campbell became entitled to invalidity benefits under the Deed. 4

More particularly, that Class B classification meant that Mr Campbell became entitled

to member benefits in accordance with r 28 of the Military Superannuation and Benefits Rules which form part of the Deed. Broadly, these benefits comprise a MSBS member benefit and an employer benefit. Mr Campbell became entitled to a preserved benefit of his MSBS member benefit with an option of accessing a pre-1 July 1999 accrued component via a lump sum payment. He availed himself of this option. His employer benefit was converted into an indexed, invalidity pension. Later, on 19 September 2014, Mr Campbell claimed payment of the balance of his preserved MSBS member benefit under the Deed. The events relevant to the present proceeding occurred prior to his making that claim.

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On 18 June 2014, Mr Campbell applied to CSC under s 90MZB of the Family Law

Act 1975 (Cth) (Family Law Act) for information about his superannuation interest under the MSBS. That section then provided: 90MZB

Trustee to provide information

(1)

An eligible person may make an application to the trustee of an eligible superannuation plan for information about a superannuation interest of a member of the plan.

(2)

The application must be accompanied by: (a)

(b) (3)

(i)

to assist the applicant to properly negotiate a superannuation agreement;

(ii)

to assist the applicant in connection with the operation of this Part in relation to the applicant; and

the fee (if any) payable under regulations made for the purposes of section 90MY.

If the trustee receives an application that complies with this section, the trustee must, in accordance with the regulations, provide information about the superannuation interest to the applicant.

Penalty:

50 penalty units.

Note:

The penalty for a body corporate is 250 penalty units. See subsection 4B(3) of the Crimes Act 1914.

(4)

Regulations for the purposes of subsection (3) may specify circumstances in which the trustee is not required to provide information.

Example:

(5)

Note:

The regulations might provide that a secondary government trustee is not required to provide information where there is another trustee of the eligible superannuation plan who is better able to provide the information.

The trustee must not, in response to an application under this section by a spouse of the member, provide the spouse with any address of the member. For this purpose, address includes a postal address.

Penalty:

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a declaration, in the prescribed form, stating that the applicant requires the information for either or both of the following purposes:

50 penalty units.

The penalty for a body corporate is 250 penalty units. See subsection 4B(3) of the Crimes Act 1914.

The provision of information under s 90MZB of the Family Law Act facilitates the

making of court orders in respect of superannuation interests in matrimonial causes heard in the Family Court of Australia or the Federal Circuit Court of Australia or in the reaching of

-3agreements concerning such interests in such causes. Under Pt VIIIB of the Family Law Act, courts having jurisdiction in matrimonial causes are able to make orders “splitting” the superannuation interest of a member spouse. 7

Part VIIIB of the Family Law Act and related measures were remedial in intent and

designed to address difficulties hitherto encountered by the Family Court in dealing with superannuation interests in the context of making orders with respect to the division of matrimonial property. A helpful summary of the general nature of the remedial measures was offered by the Full Court of the Family Court in Hickey v Hickey [2003] FamCA 395 at [16]: 16.

8

The Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) came into force on 28 December 2002. Part VIIIB was inserted into the Act. That Part enables courts exercising jurisdiction under the Act, in appropriate circumstances, to make an order in relation to the superannuation interests of the parties to a marriage. In addition, the Part contains provisions enabling the courts to make orders binding on the trustees of superannuation plans. The Family Law (Superannuation) Regulations 2001 (the Regulations) provides machinery for, inter alia, the operation of the scheme including provisions relating to the valuation of superannuation interests and the mechanism for splitting superannuation payments once an order is made. The Superannuation Industry (Supervision) Amendment Regulations 2001 (No 3) enables parties and trustees to obtain a clean financial break for certain types of superannuation interests by the creation of a new interest, a roll over or transfer of the benefit and the payment of a lump sum in circumstances where the non-member spouse has met a condition of release. The Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001 (Cth) and the Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2002 (Cth) effected consequential amendments to other complimentary legislation; extended the powers of the courts exercising jurisdiction under the Act; and identified additional responsibilities imposed on the trustees of superannuation funds under both the Act, the Regulations, the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation Industry (Supervision) Regulations 1994.

Mr Campbell used the required form (Form 6) for the purpose of making his request.

He complied with the requirements specified in s 90MZB(2) of the Family Law Act. 9

On 30 June 2014, CSC provided Mr Campbell with two responses to his request for

information. CSC did this because, in its view, the status of Mr Campbell’s account under the MSBS as at 18 June 2014, the date of his request, was that he had a preserved benefit in what it considered was, for family law purposes, “growth phase” and he was separately in receipt of an invalidity pension in what it considered was, for family law purposes, “payment phase”. Accordingly, CSC considered that it was obliged to make two separate responses to

-4Mr Campbell’s application, one for each component of what it considered was his overall superannuation interest. 10

On 30 September 2014, Mr Campbell lodged a complaint with CSC by which he

asserted that he ought not to have been furnished, in response to his application, with information in relation to his invalidity pension benefit. The response which CSC made on 9 October 2014 to this complaint was that it was obliged by s 90MZB of the Family Law Act to provide this information. 11

On 14 October 2014, Mr Campbell lodged a complaint with the Superannuation

Complaints Tribunal (the Tribunal) under the Superannuation (Resolution of Complaints) Act 1993 (Cth) (Complaints Act) seeking a retraction of the information provided by CSC in respect of his invalidity pension in response to his application on the basis that his entitlement to this pension was not a “defined benefit interest”. 12

As this proceeding was originally instituted, the Tribunal was the only respondent

named by Mr Campbell. At an early interlocutory stage, I directed that CSC additionally be served and it thereafter became the second respondent. Appropriately, the Tribunal took no active part in the proceedings and informed the Court that it did not wish to be heard save in respect of any issue as to costs. 13

On 1 February 2016, the Tribunal decided to treat Mr Campbell’s complaint to it as if

it had been withdrawn on the basis that it was misconceived: see s 22(3)(b) of the Complaints Act. That was because the Tribunal considered that Mr Campbell’s view as to the absence of an obligation on the part of CSC to provide information with respect to his invalidity pension benefit was wrong in law. 14

It is implicit in the Tribunal’s decision that it regarded Mr Campbell’s complaint as

concerning a “decision” by CSC as trustee for the purposes of the Complaints Act. By s 14AA of the Complaints Act it is provided: 14AA Complaints may be made about discretionary or non-discretionary decisions (1)

To avoid doubt, a complaint may be made under this Part about a decision whether or not the decision involved the exercise of a discretion.

(2)

However, a decision that did not involve the exercise of a discretion is taken to have been unfair and unreasonable if the decision was contrary to law.

-5Because Mr Campbell’s application to CSC for information complied with the requirements of s 90MZB of the Family Law Act, the effect of s 90MZB(3) of that Act was that CSC was obliged, “in accordance with the regulations”, to provide information about his “superannuation interest” to him. CSC made a decision when it decided to comply this requirement, as it understood it, but that decision entailed no exercise of a discretion, only a recognition that an obligation to furnish information arose if particular circumstances existed. As CSC viewed them, those circumstances existed and, hence, an obligation to furnish information with respect to each of its two responsive advices to Mr Campbell. The effect of s 14AA(2) of the Complaints Act is that its non-discretionary decision will be taken to be unfair and unreasonable if it was contrary to law. 15

Pursuant to s 46 of the Complaints Act, Mr Campbell has appealed to this Court, on

questions of law, from the Tribunal’s determination. The principal question of law is whether the Tribunal was correct in treating his complaint as if withdrawn by virtue of a misconception and therefore, in effect, whether CSC in the circumstances was indeed obliged by s 90MZB(3) of the Family Law Act to provide him with information concerning his invalidity pension benefit? A subsidiary question is whether, in providing information, the Tribunal was correct in characterising his entitlement to an invalidity pension under the MSBS as a “defined benefit interest”, as defined? 16

Perhaps fortunately, answering these questions does not require any excursion into the

unusual nature of the review jurisdiction exercised by the Tribunal: q.v., e.g. Board of Trustees of the State Public Sector Superannuation Scheme v Edington [2011] FCAFC 8; (2011) 119 ALD 472 at 485, [45] per Kenny and Lander JJ and my separate judgment on that subject in that case. Determining whether the circumstances did give rise to the obligation to furnish information for which s 90MZB(3) of the Family Law Act provides and, if so, what information, does require an excursion into both the definition of “superannuation interest” as well as the regulations to which reference is made in that subsection namely, the Family Law (Superannuation) Regulations 2001 (FLSR). 17

Before embarking on that excursion and in fairness to Mr Campbell’s submissions,

which he made in a considered and courteous way with the assistance, at his request and with my permission, of a “McKenzie’s friend” (q.v. McKenzie v McKenzie [1971] P 33) at the Bar table, the following should be stated. The essence of Mr Campbell’s submissions was that superannuation was a benefit paid in respect of age retirement, whereas his invalidity pension

-6benefit was paid by virtue of a medical condition which occasioned a degree of incapacity to undertake remunerative work. Intuitively, with respect to what constitutes “superannuation”, this submission is not without attraction, although it gives insufficient acknowledgement to the nuance that ill-health as well as age might occasion retirement. This is apparent from a meaning given to the word “superannuation” by the Oxford English Dictionary, particularly in relation to the usage of that word in Australia and New Zealand: Money, or an allowance or pension, paid to a retired person, or one who can no longer work. Also: a fund providing this, or regular payment made towards such a fund by an employed person. 18

Mr Campbell is in distinguished company in his understanding of the general concept

of superannuation. In Scott v Commissioner of Taxation (No 2) (1966) 40 ALJR 265 at 278 (Scott No 2), another former member of the ADF, Sir Victor Windeyer, in his later capacity as a judge of the High Court, opined that the term “superannuation fund established for the benefit of employees” had “no essential ingredient … except that it must be a fund bona fide devoted as its sole purpose to providing for employees who are participants money benefits (or benefits having a monetary value) upon their reaching a prescribed age”. As can be seen, this is a narrower meaning of the word than that now offered by the Oxford English Dictionary in that it does not acknowledge that a person may become “superannuated” not just by age alone but, before a retirement age, by infirmity. 19

Be this as it may, whether an obligation arose under s 90MZB(3) to furnish

information with respect to Mr Campbell’s invalidity benefit is not to be decided intuitively, divorced by the regime in the Family Law Act and the FLSR. 20

Section 90MD of the Family Law Act contains the following definitions pertinent to

s 90MZB(3): 



eligible superannuation plan means any of the following: (a)

a superannuation fund within the meaning of the SIS Act;

(b)

an approved deposit fund;

(c)

an RSA;

(d)

an account within the meaning of the Small Superannuation Accounts Act 1995;

(e)

a superannuation annuity (within the meaning of the Income Tax Assessment Act 1997).

interest includes a prospective or contingent interest, and also includes an

-7expectancy.  member, in relation to an eligible superannuation plan, includes a beneficiary (including a contingent or prospective beneficiary).  superannuation interest means an interest that a person has as a member of an eligible superannuation plan, but does not include a reversionary interest. 21

What is clear from these definitions is that what amounts to an eligible

superannuation plan and an interest as a member in such a plan has not been left just to general concepts. If, for example, the MSBS Fund is a superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act), a member’s interest under the Deed in that fund will be a superannuation interest as defined even though the Deed provides for death and invalidity as well as age retirement benefits. If the result seems counter-intuitive in comparison with the general concept of superannuation, as explained by Windeyer J in Scott No 2, that is nothing more than the result of a parliamentary value judgment, which result must be respected. 22

CSC submits that, definitionally, the MSBS is an “eligible superannuation plan” as it

is a superannuation fund for the purposes of the SIS Act. Mr Campbell does not gainsay this proposition, so it is unnecessary to explore the intricacies of the SIS Act. 23

Mr Campbell’s grievance does not just relate to how the FLSR apply to the particular

benefits which he has under the MSBS in terms of the whether CSC must provide information and, if so, what information it must provide. This is but a springboard to a more fundamental grievance, which is that, if his invalidity pension benefit is not a “defined benefit interest” as defined by reg 5 of the FLSR, his view is that it is not a “superannuation interest” at all. 24

Part of his initial premise for this view is that s 90MZB(3) requires CSC to provide

information, “in accordance with the regulations”. That sub-section falls within Pt VIIIB of the Family Law Act. From this comes the other part of Mr Campbell’s initial premise. That is that, because the effect of s 90MB(1)(c) of the Family Law Act is that the provisions of Pt VIIIB of that Act have effect despite anything to the contrary in a trust deed or other instrument, it follows, he submits, that the requirements in the FLSR over-ride anything to the contrary in the Deed. I did not understand CSC to gainsay either part of this initial premise. In any event, each aspect of this initial premise is, in my view, correct.

-825

Mr Campbell’s next premise is controversial. It concerns whether, if at all, the more

specific prescription as to the provision of information under s 90MZB(3) in respect of the defined benefit interest of a member, found in regs 64 and 64A of the FLSR, applies to his receipt of an invalidity benefit. It is in regs 64 and 64A of the FLSR that one finds the references to “growth phase” and “payment phase”. Mr Campbell’s submission is that regs 64 and 64A are each concerned with the provision of information concerning certain “defined benefit interests” and, as to his invalidity pension, he does not have such an interest. 26

If his entitlement to receive his invalidity pension under the MSBS is not a “defined

benefit interest”, it must, Mr Campbell submits, fall outside the requirement which falls on CSC under s 90MZB(3) to provide information “in accordance with the regulations”. He then goes further and submits that, “because the ‘Invalidity Benefit’ is not a ‘Defined Benefit Interest’ that it is not an interest in the fund” [sic]. Put another way, his position is that, if his entitlement to be paid his invalidity pension is not a “defined benefit interest”, as defined by reg 5 of the FLSR, it is not a superannuation interest at all. 27

It is convenient first to consider whether Mr Campbell has a defined benefit interest.

28

Such is the prolixity of regs 64 and 64A that it would detract from the continuity and

comprehensibility of this judgment immediately to reproduce them.

Instead, their text

appears as annexures (see Annexure 1 and Annexure 2 respectively). The term “defined benefit interest” is defined for the purposes of the FLSR by reg 5: 5

Meaning of defined benefit interest (1)

(1A)

Subject to subregulation (2), for these Regulations, a defined benefit interest is: (a)

a superannuation interest that a member spouse has in an eligible superannuation plan, being an interest in respect of the whole of which the member spouse is entitled, when benefits in respect of the interest become payable, to be paid a benefit that is, or may be, defined by reference to one or more of the amounts or factors mentioned in subregulation (1A); or

(b)

a component of a superannuation interest that a member spouse has in an eligible superannuation plan, being a component in respect of which the member spouse is entitled, when benefits in respect of the interest become payable, to be paid a benefit that is, or may be, defined by reference to one or more of the amounts or factors mentioned in subregulation (1A).

For subregulation (1), the amounts and factors are as follows:

-9(a)

(2)

29

the amount of: (i)

the member spouse’s salary at the date of the termination of the member spouse’s employment, the date of the member spouse’s retirement, or another date; or

(ii)

the member spouse’s salary averaged over a period;

(b)

the amount of salary, or allowance in the nature of salary, payable to another person (for example, a judicial officer, a member of the Commonwealth or a State Parliament, a member of the Legislative Assembly of a Territory);

(c)

a specified amount;

(d)

specified conversion factors.

A superannuation interest, or a component of a superannuation interest, is not a defined benefit interest for these Regulations if the only benefits payable in respect of the interest, or the component, that are defined by reference to the amounts or factors mentioned in subregulation (1A) are benefits payable on death or invalidity.

Mr Campbell submits that, on its true construction, his invalidity pension falls within

the exclusion found in the reg 5(2) definition of “defined benefit interest”. This proposition is not accepted by CSC. 30

In support of the construction of the FLSR which he promoted Mr Campbell made

reference to a case decided last year in the Family Court, Burge & Burge [2015] FamCA 178 (Kent J). The controversy in that case was whether the husband’s receipt of an invalidity benefit arising under a Commonwealth Public Service superannuation scheme administered by CSC was or was not a “splittable” superannuation interest. The CSC had furnished information to the husband, inferentially under s 90MZB(3) of the Family Law Act, in which the question, “Is the superannuation interest unsplittable?”, was answered in the negative. At the trial a court appointed single expert, termed, “Mr B” in the judgment, opined that the benefit was not a superannuation interest. On this basis and after an adjournment, the wife decided no longer to pursue a case which suggested that the benefit that the husband was receiving was a superannuation interest. In the absence of this controversy, the parties reached an agreement as to the division of matrimonial property and it then fell to Kent J to determine whether it was just and equitable. In the course of holding that the resultant agreement was just and equitable, Kent J observed, in his ex tempore reasons for judgment (at [7]), “on Mr B’s evidence, the preliminary view I formed and expressed prior to the adjournment of the matter was that it was unlikely on his evidence that the relevant interest could be regarded as a superannuation interest”.

- 10 31

Burge & Burge is consistent with the construction promoted by Mr Campbell but its

authority for present purposes is very much diminished by the absence of any need, in light of the agreement reached, for Kent J to express any concluded view as to whether an invalidity benefit was a superannuation interest under Pt VIIIB of the Family Law Act or, for that matter, a “defined benefit interest” under the FLSR. 32

CSC’s submission is that the exclusion in reg 5(2) “is intended to ensure that when an

interest is valued, neither a future death benefit nor a future possible invalidity benefit is taken into account”. This is so, CSC submits, “because the death benefit is an entitlement of eligible beneficiaries (i.e. it is not the member's entitlement) and a possible invalidity benefit is a contingency that may not eventuate. In the event that a person does not retire on grounds of invalidity, the need to exempt this entitlement from the valuation methodology no longer applies because the person's defined benefit has vested - i.e. become payable.” “From then on”, so CSC further submits, “the interest is to be valued on the basis of the actual entitlement- i.e. the amount of pension actually being paid - and the Trustee is required to provide specific information for that purpose”. 33

CSC also submitted that its position was supported by a Ministerial determination,

made pursuant to reg 64(7) of the FLSR, the Provision of Information Determination. The difficulty about such reliance is that such a determination cannot dictate the meaning to afford to the definition of “defined benefit interest” in reg 5 of the FLSR. For that reason, however much it might serve to explain practices adopted in good faith by CSC with respect to the provision of information via the adoption of particular valuation calculations, I do propose further to refer to that determination. 34

Support for CSC’s position was also said to be found in s 90ME of the Family Law

Act. CSC submitted, and the position is, that, in defining “splittable payment”, s 90ME(1)(a), materially, refers in an undifferentiated way to “a payment to the spouse” as one category of “splittable payment”. Further, so the submission went, though s 90ME(2) enables particular payments to be exempted by prescription from the “splittable payment” category, the relevant regulation, reg 11 of the FLSR, does not exempt a MSBS invalidity pension. Yet further, though the definition of “unsplittable interest” in s 90MD anticipates that particular interests may, by regulation, be prescribed as “unsplittable”, the relevant regulation, reg 12 of the FLSR does not make a MSBS invalidity pension “unsplittable”. As I understood it, the reason for CSC’s reliance on these provisions was that s 90MZB(3) and regulations made for

- 11 the purposes of that provision should be construed in a way which was harmonious with what was and was not a “splittable payment” or interest. Otherwise, so the submission went, it would be impossible for the parties in family law litigation or a court properly to value a superannuation interest for the purposes of an agreement or, as the case may be, a court order. I have not gained any assistance from s 90ME in answering the question posed. 35

Mr Campbell’s reference to Burge & Burge provoked the thought, which had not

manifested itself in the submissions made on behalf of CSC, that that case must surely not have been the only occasion when the Family Court had been called upon to examine invalidity pension payments made under a superannuation scheme for the purposes of making an order under Pt VIIIB of the Family Law Act or approving a property settlement agreement as just and equitable. For occupational superannuation is pervasive in modern times and the MSBS was unlikely to be unique in making provision for payments in respect of incapacity occasioned, premature retirement. 36

An examination of Family Court authority discloses a line of cases in the original and

appellate jurisdiction in which that court has grappled with questions as to what is a just and equitable allocation of property where the matrimonial assets include an entitlement to be paid an invalidity benefit from an occupational superannuation fund. This line of authority proceeds from the acceptance that an entitlement to be paid an invalidity pension from an occupational superannuation fund constitutes a “superannuation interest” for the purposes of Pt VIIIB of the Family Law Act. These authorities and their effect were summarised by Foster J in Simpson & Simpson [2014] FamCA 521 at [69] and [72] in this way: 69.

… [T]he nature, form and characteristics of the husband’s pension needs to be considered in evaluating the party’s contributions to that pension and in determining what orders are ultimately just and equitable (See Trott & Trott (2006) FLC 93-263; DJ & AJ (2006) FLC 93-289; Wheeldon & Wheeldon [2011] FamCA 40; Semperton & Semperton (2012) 47 Fam LR 626; and Crawford & Crawford (2013) 48 Fam LR 539, Lane & Lemott [2013] FamCA 604).

72.

The authorities referred to above recognise the different qualities of contributions made by the non-member spouse in respect of the invalidity and non-invalidity component of a pension stream. The contributions of the non-member spouse in relation to an invalidity component have been regarded as inferior to those of the member spouse where the pension substitutes for current income pending retirement.

These authorities notably include a case stated, C v B-H & Anor [2005] FamCA 431, in which it fell to a specially constituted Full Court (constituted by five judges) to determine the

- 12 extent to which payments under the predecessor to the MSBS, the statutory scheme found in the Defence Force Retirement and Death Benefits Act 1973 (Cth) constituted property for the purposes of the making of orders under s 79 of the Family Law Act in property settlement proceedings. The particular payments under that Act considered in that case were not, however, invalidity based but rather other retirement benefits. 37

In none of these cases though has the Family Court been called upon to determine the

meaning of “defined benefit scheme” in reg 5 of the FLSR. I include Burge & Burge in that category, because it was unnecessary for the court in that case to express any concluded view about Pt VIIIB of the Family Law Act or the FLSR. Neither my own research nor that of counsel for CSC has turned up any other authorities either in the Family Court or, in respect of appeals from the Tribunal, in this Court. That precise point is therefore free from direct authority. That said, even if that point is settled in Mr Campbell’s favour, it by no means follows that this means that he does not have a “superannuation interest” at all. 38

It is as well to begin with the text of reg 5 of the FLSR definition.

39

As a matter of construction, the exception found in reg 5(2) is premised on an

invalidity payment being capable of falling within the definition in s 90MD of the Family Law Act of “superannuation interest”.

As already noted, in defining “superannuation

interest”, parliament has not been content to leave what constitutes “superannuation” just to a general concept of an amount in respect of age based retirement from the workforce paid from a fund maintained for that purpose. 40

It follows from this premise that, but for reg 5(2), an amount covered by that

subregulation would otherwise fall within reg 5(1). It ought also to be noted of reg 5 that it is no part of the work assigned to it that it define the metes and bounds of what constitutes a superannuation interest for the purposes of Pt VIIIB. The definition of “superannuation interest” in s 90MD gives no support for such a proposition. 41

The clause “when benefits in respect of the interest become payable”, found in

reg 5(1)(a) and reg 5(1)(b), governs both a superannuation interest and a component of a superannuation interest to which a member spouse “is entitled” by virtue of that interest or component of an interest. The clause could be read as just looking to a position which will arise in the future. If so, the conditional clause, “if the only benefits payable in respect of the interest, or the component”, found in reg 5(2), would then correspondingly be read as placing

- 13 a condition on the entitlement which will arise in the future by virtue of that interest or component of interest. 42

On this approach to construction, any pension which has become payable, by virtue of

the fulfilment of the requirements of an eligible superannuation plan, would stand outside reg 5(1) and not be a “defined benefit interest” at all. Necessarily, that would mean that an invalidity pension falls outside that definition, even without recourse to reg 5(2). This would leave “defined benefit interest” as applicable, subject to its exception, only to entitlements the condition to which is not yet fulfilled. 43

It is alternatively possible, in my view, to read the sentence in reg 5(1)(a) and its

“component cognate” in reg 5(1)(b), each of which includes “is entitled, when benefits in respect of the interest become payable” as applying both to an interest giving rise to an entitlement represented by a present payment or one which will be paid in the future if certain requirements are fulfilled. If so, but for the exception in reg 5(2), an invalidity pension presently being paid would fall within reg 5(1). On this construction, reg 5(2) would remove Mr Campbell’s invalidity pension from the scope of reg 5(1), because that pension is “only payable on invalidity”. 44

The alternative construction does not read the clause “when benefits in respect of the

interest become payable” in isolation and gives a broader reach to reg 5(1). It does strike me as illogical to include benefits which will, in the future, be paid by reference to the criteria specified in reg 5(1A), but to exclude from the general scope of “defined benefit interest” benefits which are presently being paid by reference to those same criteria.

For these

reasons, the alternative is my preferred construction. 45

As to reg 5(1) only, this alternative construction also accords with the construction

adopted by the Tribunal. I agree with the observation concerning reg 5(1) of the FLSR, made by the Tribunal in its letter of 4 January 2016 to Mr Campbell, that its role is to capture as a defined benefit interest a superannuation interest that has or may have a defined benefit character. Where I disagree with the view expressed by the Tribunal of reg 5 of the FLSR in that letter is in respect of the statement, “if the only benefit outcomes under the broad design of the superannuation interest that have a defined benefit character are death or invalidity benefits, then the superannuation interest won’t be regarded as a defined benefit interest”. It was because the MSBS did not limit its defined benefits just to death or invalidity benefits

- 14 that the Tribunal did not regard reg 5(2) as operating so as to exclude Mr Campbell’s invalidity pension entitlement from the reach of reg 5(1). 46

Yet this “broad design” approach to reg 5(2) ignores the specific provision, found in

both reg 5(1)(b) and reg 5(2), in respect of a “component” of a superannuation interest (as the latter term is defined in s 90MD). That the reg 5 definition acknowledges that there may be components of a superannuation interest necessarily means that one does not look to a “broad design” but rather to the character of a component particular, if the interest admits of a number of components.

Though reg 5(2) looks to a benefit payable on invalidity, it

nonetheless is predicated on the amount of that benefit being “defined by reference to the amounts or factors mentioned in subreg (1A)”. Materially, reg 5(2) removes from the class of benefits so defined, those payable on invalidity. 47

The MSBS offers a case in point. It has multiple components, each of which, as it

happens, is a benefit defined by reference to “the amounts or factors mentioned in subreg (1A)” – age retirement, death and invalidity benefits. It is perfectly possible to regard an invalidity benefit entitlement under the MSBS as a “component” of a superannuation interest. All that reg 5(2) does, is to remove that component (and the death benefit) from the general class. 48

Mr Campbell’s circumstances may well offer an explanation as to why defined

invalidity entitlement components were excluded from the definition of “defined benefit interest”. A person’s invalid condition may over time either improve or deteriorate, leading, possibly, to the revision or even elimination of an invalidity payment entitlement by virtue of the application of the terms of a superannuation plan to their present circumstances. In the case of the MSBS, regard to the rules discloses that a member’s classification as “A”, “B” or “C” admits in certain circumstances of later reclassification. It is therefore not just the prospect that a member spouse may never suffer invalidity giving rise to an entitlement to be paid an invalidity benefit that lends uncertainty to the valuation of that component of the person’s superannuation interest. Uncertainty may also attend that valuation even in the event of initial qualification for an invalidity benefit. 49

A conclusion that reg 5(2) operated to exclude Mr Campbell’s vested entitlement to

an invalidity pension benefit from the class of “defined benefit interests” necessarily means that the neither reg 64 nor reg 64A supplied an applicable means of valuing that component of his superannuation interest.

- 15 50

Another consequence of this exclusion is that Mr Campbell’s vested entitlement to an

invalidity pension benefit is, for the purposes of the FLSR an “accumulation interest”. This is because reg 3 defines such an interest to mean “a superannuation interest, or a component of a superannuation interest, that is not a defined benefit interest or a small superannuation accounts interest”. There has never been any suggestion that Mr Campbell’s invalidity benefit entitlement constitutes a “small superannuation accounts interest”. 51

What follows from this is that, to the extent that the Tribunal upheld the adoption by

the CSC of a defined benefit method of valuation in respect of Mr Campbell’s invalidity benefit, it erred in law. The effect of s 14AA of the Complaints Act is that it ought to have held that CSC’s decision was thus taken to be unfair and unreasonable. 52

It does not at all further follow from this that Mr Campbell does not have a

“superannuation interest” at all. 53

As noted, it is not disputed that the MSBS is a superannuation fund within the

meaning of the SIS Act and thus, definitionally (s 90MD), an “eligible superannuation plan”. The definition of superannuation interest in s 90MD of the Family Law Act, “an interest that a person has as a member of an eligible superannuation plan” is perfectly apt to cover the interest which Mr Campbell has in his ongoing invalidity pension benefit, which benefit is and remains wholly attributable to his membership of the MSBS. His notion of an “override” of the Deed, flowing from s 90MB(1)(c) of the Family Law Act, so as somehow to negate his status as a “member of an eligible superannuation plan” for the purposes of that Act is, with respect, misconceived. There is no “over-ride” of the Deed. Instead, having regard to the definition of “superannuation interest”, and to the terms of the Deed, the interest which the Deed has conferred on him to receive, subject to the terms of that Deed (which include the possibility of re-classification), namely his invalidity pension benefit, is a “superannuation interest” as defined. 54

Because Mr Campbell’s invalidity pension entitlement under the MSBS was a

superannuation interest it necessarily followed that CSC was obliged by s 90MZB(3) to furnish him with information about that interest.

CSC’s obligation was so to do “in

accordance with the regulations”. By virtue of an error of law with respect to the FLSR, made by CSC and confirmed by the Tribunal, he was provided with information purportedly in accordance with those regulations, which valued that particular interest on the basis that it

- 16 was a “defined benefit interest”. Instead, the effect of the regulations was that it ought to have been valued on the footing that it was an “accumulation interest”. 55

The questions of law ought to be answered accordingly and the matter remitted to the

Tribunal for reconsideration on the footing that Mr Campbell’s invalidity pension entitlement is an “accumulation interest” for the purposes of the FLSR.

I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated:

15 July 2016

- 17 ANNEXURE 1 Family Law (Superannuation) Regulations 2001, reg 64 64

Information about certain defined benefit interests (Act s 90MZB)

(1)

This regulation applies in relation to a superannuation interest of a member of an eligible superannuation plan if:

(2)

(a)

the interest is a defined benefit interest or a component of the interest is a defined benefit interest; and

(b)

the interest is not a percentage only interest or an interest in a self managed superannuation fund; and

(c)

regulation 68A does not apply in relation to the interest.

For subsection 90MZB(3) of the Act and subject to subregulations (6), (7), (7A) and (7B), the information about the defined benefit interest that must be provided to an applicant by the trustee of the plan is as follows: (aa)

if the interest is an unsplittable interest, a statement to that effect;

(a)

a statement indicating whether the interest is subject to a payment split or payment flag and, if the interest is subject to a payment split (other than under a superannuation agreement, flag lifting agreement or splitting order in relation to which the non member spouse’s entitlement has been satisfied as required by Division 2.2), the information mentioned in subregulation (5);

… (3)

For paragraph (2)(d), the payment phase information in relation to the superannuation interest is: (a)

if the member is receiving ongoing pension payments in respect of an allocated pension—the withdrawal benefit in relation to the member at the appropriate date; and

(aa)

if the member is receiving ongoing pension payments in respect of a market linked pension—the market linked pension account balance at the appropriate date; and

(b)

if the member is receiving ongoing pension payments in respect of a pension other than an allocated pension or a market linked pension: (i)

the amount of annual pension benefit payable to the member at the appropriate date; and

(ii)

a statement indicating whether the pension benefit is a lifetime pension or a fixed-term pension; and

- 18 (iii)

if the pension is a fixed-term pension: (A)

the date when the pension payments commenced; and

(B)

the length of the term; and

(iv)

a statement indicating whether the pension benefit is indexed and, if so, the method of indexation; and

(v)

a statement indicating whether there is any reversionary beneficiary who is a non member spouse in relation to the pension benefit and, if so, the proportion of the ongoing pension payments that would be payable to the reversionary beneficiary on the death of the member; and

Note for paragraphs (a) and (b): The trustee is not required to provide the information mentioned in paragraph (a) or subparagraph (b)(i) unless a record of it is in the trustee’s possession, power or control—see paragraph (6)(b). (c)

if a lump sum is payable to the member in respect of the interest at the date when the information is provided or at any later date, and the amount of the lump sum is known—the amount of the lump sum; and

(d)

if a lump sum (a future lump sum) is payable to the member in respect of the interest at a date after the date when the information is provided, and the amount of the lump sum is not known:

(e)

(f)

(i)

the amount of the lump sum that would have been paid at the date when the information is provided if a lump sum were payable at that date (the nominal lump sum); and

(ii)

the method that is to be used to index the nominal lump sum to determine the amount of the future lump sum; and

if a lump sum payment that would have been a superannuation lump sum, within the meaning of subsection 995 1(1) of the Income Tax Assessment Act 1997 had been made in respect of the interest at the date when the information is provided: (i)

the amount of the payment; and

(ii)

the value that the components of the superannuation lump sum would have had under Subdivision 307 C of that Act would have had; and

a statement: (i)

indicating whether the Minister has approved, under regulation 43A, a method or factors for determining the gross value of the interest; and

- 19 (ii) (g)

(4)

giving details of any method or factors so approved; and

if the application for information specifically requests the trustee to provide it and the trustee chooses to do so—the gross value of the interest at the appropriate date, determined in accordance with: (i)

whichever of the methods in regulation 41, 42 or 43 applies to the interest; or

(ii)

a method or factors approved by the Minister under regulation 43A.

For paragraph (2)(e), the growth phase information in relation to the superannuation interest is as follows: (a)

the member’s retirement age;

Note: The term member’s retirement age is defined in regulation 3. (b)

the member spouse’s accrued benefit multiple, within the meaning given by regulation 65, for any lump sum, or pension, payable in respect of the interest;

(c)

the salary figure, on which any benefit payable in respect of the interest would be based, assuming that the member were eligible to retire at the appropriate date;

Example: If the benefit payable in respect of a member’s superannuation interest is defined by reference to the member’s final average salary, the salary figure for this paragraph would be the member’s final average salary. (d)

if the benefit in respect of the interest is payable as a combination of a lump sum and a pension and the governing rules of the plan restrict the proportion of the pension that may be commuted to a lump sum—the maximum amount of pension that may be commuted to a lump sum, expressed as a percentage of the amount of the pension that would be payable if the whole benefit were to be taken as a pension;

(da)

if the benefit in respect of the interest is payable as a combination of a lump sum and a pension and the governing rules of the plan restrict the proportion of the lump sum that may be converted to a pension—the maximum amount of the lump sum that may be converted to a pension, expressed as a percentage of the amount of the lump sum that would be payable if the whole benefit were to be taken as a lump sum;

(e)

if any pension payable in respect of the interest is indexed and, if so, the method of indexation;

- 20 (f)

if any pension payable in respect of the interest has a guarantee period and, if so, the length of the guarantee period;

(g)

the conversion factor for converting a lump sum to a pension that will apply at the member’s retirement age;

(h)

the commutation factor for commuting a pension to a lump sum that will apply at the member’s retirement age;

(i)

if benefits in respect of the interest may be payable to a reversionary beneficiary who is a non member spouse—the proportion of payment in respect of the interest that the non member spouse would receive, as a reversionary beneficiary, on the death of the member;

(j)

unless the interest is in a constitutionally protected fund—the amount (if any) that was stated to be the surcharge debt of the member in the most recent member information statement provided to the member before the appropriate date;

(k)

if the interest is in a regulated superannuation fund or an RSA: (i)

the amount of restricted non preserved benefits that had accrued to the member, and would be payable to the member, if he or she were to resign from his or her employment on the date when the information is provided; and

(ii)

the amount (if any) of the member’s unrestricted non preserved benefits;

(l)

if the interest is in an approved deposit fund—the amount, at the date when the information is provided, of the member’s unrestricted non preserved benefits;

(m)

if: (i)

a payment that would have been a superannuation lump sum, within the meaning of subsection 995 1(1) of the Income Tax Assessment Act 1997 had been made in respect of the interest at the date when the information is provided; and

(ii)

the amount of the payment had been the amount payable to the member if he or she had voluntarily ceased to be a member of the plan—

the value that the components of the superannuation lump sum would have had under Subdivision 307-C of that Act would have had; (n)

a statement:

- 21 (i)

indicating whether the Minister has approved, under regulation 38, a method or factors for determining the gross value of the interest; and

(ii)

giving details of any method or factors so approved;

(o)

if the trustee has given information under Division 2.5 of the SIS Regulations to each member of the plan that the plan is to be reconstructed or terminated—a statement to this effect; and

(p)

if the application for information specifically requests the trustee to provide it and the trustee chooses to do so—the gross value of the interest at the appropriate date, determined in accordance with Schedule 2 or in accordance with a method or factors approved by the Minister under regulation 38.

Note: The trustee is not required to provide the information mentioned in paragraph (b), (c) or (j) to the applicant in certain circumstances—see paragraph (6)(d). (4A)

For paragraph (2)(eaa), the growth phase information in relation to the superannuation interest is as follows: (a)

(b)

if the benefit in respect of the interest is payable only as a lump sum: (i)

the amount of the lump sum that would be payable at the appropriate date, or, if that amount is calculated by reference to the indexation of 2 or more specified lump sums, the amount of each lump sum at that date (excluding any superannuation contributions surcharge payable in respect of the interest), if the member were able to take, and did take, the benefit in respect of the interest at that date; and

(ii)

if the amount of the lump sum is calculated by reference to the indexation of the amount of one or more specified lump sums—the method of indexation in respect of each lump sum; and

(iii)

the earliest date when the benefit may be paid to the member (other than for death or disability);

if the benefit in respect of the interest is payable only as a pension: (i)

if the amount of the pension payable is calculated by reference to the conversion of a lump sum amount when the pension begins to be paid: (A)

the amount of the lump sum at the appropriate date (excluding any superannuation contributions surcharge payable in respect of the interest), if the member were

- 22 able to take, and did take, the benefit in respect of the interest at that date; and

(ii)

(B)

if the amount of the lump sum is calculated by reference to the indexation of the lump sum—the method of indexation; and

(C)

the factor for converting the lump sum to a pension that will apply at the earliest date when the benefit may be paid to the member (other than for death or disability); and

in any other case: (A)

the amount of the pension at the appropriate date (excluding any superannuation contributions surcharge payable in respect of the interest), if the member were able to take, and did take, the benefit in respect of the interest at that date; and

(B)

if the amount of the pension is determined by increasing a fixed amount in accordance with an index until the earliest date when the benefit may be paid to the member (other than for death or disability)—details about the method used to increase the amount of the pension; and

(iii)

if the pension is indexed when it begins to be paid—the method of indexation; and

(iv)

a statement about whether there is any reversionary beneficiary who is a non member spouse in relation to the pension benefit and, if so, the proportion of the ongoing pension payments that would be payable to the reversionary beneficiary on the death of the member; and

(v)

the earliest date when the benefit may be paid to the member (other than for death or disability);

(c)

if the benefit is payable as a lump sum, a pension, or a combination of a lump sum and a pension—the information mentioned in paragraphs (4)(d) and (da) and paragraphs (a) and (b) of this subregulation;

(d)

the amount (if any) of the member’s unrestricted non preserved benefits at the date when the information is provided;

(e)

the information mentioned in paragraphs (4)(j), (m), (n), (o) and (p).

- 23 Note: The trustee is not required to provide the information mentioned in paragraph (4)(j) to the applicant in certain circumstances—see paragraph (6)(d). (5)

For paragraph (2)(a), the information that must be provided in relation to each payment split to which the superannuation interest is subject (other than under a superannuation agreement, flag lifting agreement or splitting order in relation to which the non member spouse’s entitlement has been satisfied as required by Division 2.2) is as follows: (a)

the operative time for the payment split;

(b)

if the payment split is under subparagraph 90MJ(1)(c)(i) or (ii) of the Act, or under a splitting order made under paragraph 90MT(1)(a) of the Act, and the interest was in the payment phase at the appropriate date—the amount that, under subregulation 58(6) or 58D(3), a person is entitled to be paid from each splittable payment that becomes payable in respect of the interest;

(c)

if the payment split is under subparagraph 90MJ(1)(c)(i) of the Act, or under a splitting order made under paragraph 90MT(1)(a) of the Act, and the interest was in the growth phase at the appropriate date:

(d)

(e)

(6)

(i)

the base amount specified in the relevant superannuation agreement or flag lifting agreement in relation to the interest; and

(ii)

if applicable, the adjusted base amount at the appropriate date;

if the payment split is under subparagraph 90MJ(1)(c)(ii) of the Act and the interest was in the growth phase at the appropriate date: (i)

the amount set out in the document served on the trustee under paragraph 90MI(b) of the Act; and

(ii)

if applicable, the adjusted base amount at the appropriate date;

if the payment split is under subparagraph 90MJ(1)(c)(iii) of the Act or under a splitting order made under paragraph 90MT(1)(b) of the Act— the specified percentage that is to apply to any splittable payment that becomes payable in respect of the interest.

The trustee is not required to provide information mentioned in this regulation to an applicant in any of the following circumstances: (a)

if the application for information specifically requests the trustee to provide the information mentioned in paragraph (2)(ea) to the applicant, the trustee is not required to provide any other information mentioned in this regulation to the applicant;

- 24 -

(7)

(7A)

(7B)

(b)

the trustee is not required to provide the information mentioned in paragraph (3)(a) or subparagraph (3)(b)(i) to the applicant unless a record of that information is in the trustee’s possession, power or control;

(d)

the trustee is not required to provide the information mentioned in paragraph (4)(b), (c) or (j) to the applicant unless a record of that information is in the trustee’s possession, power or control.

If, under regulation 38, the Minister has approved a method or factors to be used to determine the gross value of a defined benefit interest, or a component of a superannuation interest that is a defined benefit interest, the Minister may, by written determination, provide either or both of the following: (a)

that the trustee is not required to provide the information about the interest, or the component of the interest, mentioned in one or more paragraphs of subregulation 64(4) or (4A);

(b)

that the trustee must provide other information, as specified in the determination, about the interest or the component of the interest.

If, under regulation 38, the Minister has approved a method or factors to be used to determine the gross value of a superannuation interest that is made up of a component that is a defined benefit interest and a component that is a partially vested accumulation interest, the Minister may, by written determination, provide any or all of the following: (a)

that the trustee is not required to provide the information about the component that is a defined benefit interest mentioned in one or more paragraphs of subregulation 64(4);

(b)

that the trustee is not required to provide the information about the component that is a partially vested accumulation interest mentioned in one or more paragraphs of subregulation 63(4A);

(c)

that the trustee must provide other information, as specified in the determination, about the interest or a component of the interest.

If, under regulation 43A, the Minister has approved a method or factors to be used to determine the gross value of the superannuation interest, the Minister may, by written determination, provide either or both of the following: (a)

that the trustee is not required to provide the information about the interest mentioned in one or more paragraphs of subregulations (2) and (3);

(b)

that the trustee must provide other information, as specified in the determination, about the interest.

- 25 (8)

A determination by the Minister under subregulation (7), (7A) or (7B) is a legislative instrument.

- 26 ANNEXURE 2 Family Law (Superannuation) Regulations 2001, reg 64A 64A

Giving underlying valuation information—defined benefit interests

(1)

In this regulation: “underlying valuation information” means:

(2)

(a)

in relation to the gross value of a superannuation interest at the appropriate date, determined in accordance with Schedule 2, being an interest to which paragraph 64(2)(e) applies—the information mentioned in paragraph 64(4)(a), (b), (c), (d), (da), (e), (f), (g), (h) or (i); or

(b)

in relation to the gross value of a superannuation interest at the appropriate date, determined in accordance with Schedule 2, being an interest to which paragraph 64(2)(eaa) applies—the information mentioned in paragraph 64(4A)(a), (b) or (c); or

(c)

in relation to the gross value of a superannuation interest at the appropriate date, determined in accordance with a method or factors approved by the Minister under regulation 38: (i)

if a determination under subregulation 64(7), (7A) or (7B) is in effect in relation to the interest—information required to be provided under the determination; or

(ii)

in any other case—information that will enable the applicant to check whether the gross value of the interest has been correctly determined in accordance with the approved method or factors.

If, before 1 July 2007, an application for information under section 90MZB of the Act specifically requested the trustee to provide the information mentioned in paragraph 64(4)(p) and, in response to that application: (a)

the trustee provided the gross value of the superannuation interest at the appropriate date, determined in accordance with Schedule 2, but did not provide all of the information mentioned in paragraphs 64(4)(a) to (i); or

(b)

the trustee provided the gross value of the superannuation interest at the appropriate date, determined in accordance with a method or factors approved by the Minister under regulation 38, but has not provided sufficient information to enable the applicant to check whether that gross value has been correctly determined in accordance with the approved method or factors;

the applicant may make an application for specific underlying valuation information.

- 27 (3)

If, on or after 1 July 2007, an application for information under section 90MZB of the Act specifically requested the trustee to provide the information mentioned in paragraph 64(3)(g) and the trustee, in response to that application: (a)

provided the gross value of the defined benefit interest at the appropriate date, determined in accordance with a method or factors approved by the Minister under regulation 43A; but

(b)

has not provided sufficient information to enable the applicant to check whether that gross value of the interest has been correctly determined in accordance with the approved method or factors;

the applicant may make an application for specific underlying valuation information. (4)

If, on or after 1 July 2007, an application for information under section 90MZB of the Act specifically requested the trustee to provide the information mentioned in paragraph 64(4)(p) and the trustee, in response to that application: (a)

provided the gross value of the defined benefit interest at the appropriate date, determined in accordance with a method or factors approved by the Minister under regulation 38; but

(b)

has not provided sufficient information to enable the applicant to check whether that gross value of the interest has been correctly determined in accordance with the approved method or factors;

the applicant may make an application for specific underlying valuation information. (5)

Subject to subregulation (6), the trustee must, within a reasonable time after receiving the later application, provide the underlying valuation information requested by the applicant in a document that is addressed to the applicant.

(6)

The trustee is not required to provide to the applicant underlying valuation information of the kind mentioned in paragraph 64(4)(b) or (c) unless a record of that information is in the trustee’s possession, power or control.

(7)

Subregulation 68B(2) applies to information that is provided by the trustee to the applicant under this regulation.

Kas, Nevin From: Sent: To: Cc: Subject: Attachments:

Morgan, Helen Thursday, 8 September 2016 9:10 AM Kas, Nevin Ramsay, Alastair FW: Military Super [DLM=For-Official-Use-Only] 20160309 - Invalidity Pensions - Brief.docx

From: Affleck, Alexander Sent: Wednesday, 9 March 2016 7:37 PM To: Richardson, Darryl Cc: Profke, Rod; Draeger, Russell; Morgan, Helen Subject: Military Super [DLM=For-Official-Use-Only]

Hi Darryl, Please find attached a brief on the military super issue. James has requested a written summary of the issue. Please note that contact has been made with today to organise a meeting to discuss our position. Russell and Rod – thanks for pulling the material together. Regards,

Alex Affleck Director Technical Leadership | Superannuation Australian Taxation Office P M

1

Kas, Nevin From: Sent: To: Subject:

Morgan, Helen Thursday, 8 September 2016 9:15 AM Kas, Nevin FW: Some questions about the application of the delayed ruling provisions [DLM=For-Official-Use-Only]

_____________________________________________ From: Clancy, Sheree Sent: Wednesday, 27 April 2016 2:51 PM To: Morgan, Helen Subject: RE: Some questions about the application of the delayed ruling provisions [DLM=For-Official-Use-Only]

Hello Helen I have some thoughts that I hope will assistant with the queries you have raised. Having given us the notice under section 359-50 of Schedule 1 to the Taxation Administration Act 1953 (TAA), can the client withdraw it? We believe they can, but have been unable to find where this is clearly stated. I agree that there is no provision that specifically allows the taxpayer to withdraw the notice. However, you should find the case of McGrouther & Anor v. Commissioner of Taxation 2015 ATC 20-492 (McGrouther) of assistance. There is also a DIS for this case. The Full Federal Court unanimously held the taxpayer could waive reliance on a notice given under subsection 14ZYA(2) of the TAA, it being a provision existing solely for the benefit of the taxpayer and not one whose observance was a condition of the exercise of a statutory power or enacted for a wider public purpose. The waiver of a subsection 14ZYA(2) notice can be validly effected by a notice to the Commissioner withdrawing the notice. Section 14ZYA of the TAA is a provision that allows a taxpayer to give the Commissioner a written notice requiring the Commissioner to make an objection decision. If the Commissioner fails to make the objection decision by the end of 60 days the Commissioner is taken to have made a decision to disallow the taxation objection. Similarly, section 359-50 of Schedule 1 to the TAA is a provision for the benefit of the taxpayer. The provision provides the taxpayer with the right to give a notice once certain conditions are met and the right to object after a certain period of time has lapsed. The rights are personal to the taxpayer and do not have a wider public purpose. A person who has the sole benefit of a statutory provision can waive that provision. See paragraphs 25 and 26 of McGrouther. It appears that you should be able to mount a similar argument to the McGrouther decision to allow the taxpayer to withdraw the notice given under section 359-50.

1

If our technical position firms to an extent to which we may be able rule, but in order to rule would be likely to require further clarification/information that was not previously sought, and the client does not provide us with this information, are we still able to decline to rule under 357-110 on the basis that we consider the correctness of the ruling would depend on assumptions. You have advised that this question is also concerns the same taxpayer who has given the Commissioner a notice under section 359-50 of Schedule 1 to the TAA. It seems that section 359-50 does not prevent the operation of other provisions in the rulings regime or prevent the Commissioner declining to rule. Item 2 of the table to subsection 359-50(2) contemplates that the Commissioner would need to consider the operation of section 357-110 (which is about assumptions). Subsection 359-50(3) provides that the Commissioner may decline to rule in response to the private ruling application and does not restrict what provision the Commissioner may rely on to decline to rule. The Explanatory Memorandum to Tax Laws Amendment (Improvements to Self Assessment) Bill (No 2) 2005 explains the operation of subsection 359-50(3) this way: 3.95 If, 30 days after being given that written notice, the Commissioner has not made the ruling, or has not declined to make the ruling, then the applicant will have the right to object in the manner set out in Part IVC of the TAA 1953 and, as part of their objection, they must lodge their own draft private ruling. (This ruling will have no status at law apart from its role in the objection proceedings, and the applicant may not rely on it until and unless confirmed on objection or appeal.) [Schedule 2, item 1, subsections 359-50(3) and (4) of Schedule 1 to the TAA 1953] [emphasis added]

The principles in PS LA 2008/5 should be taken into account in determining whether it is appropriate to decline to rule on the basis on the basis that the correctness of the ruling would rely on assumptions.

Hope this will assist you. Happy to discuss further. Kind regards Sheree

Sheree Clancy Senior Technical Adviser Tax Counsel Network Australian Taxation Office P

_____________________________________________ From: Morgan, Helen Sent: Wednesday, 27 April 2016 9:54 AM To: Clancy, Sheree Subject: Some questions about the application of the delayed ruling provisions [DLM=For-Official-Use-Only]

Hi Sheree Thanks for offer to help clarify our understanding around the “delayed ruling” provisions. As discussed we have a number of Ruling requests on a topic where the ATO is determining it’s view and one of the taxpayer has provided us with written notice requiring us to make the ruling within 30 days. My specific questions are: 2



Having given us the notice, can the client withdraw it? We believe they can, but have been unable to find where this is clearly stated.



If our technical position firms to an extent to which we may be able rule, but in order to rule would be likely to require further clarification/information that was not previously sought, and the client does not provide us with this information, are we still able to decline to rule under 357-110 on the basis that we consider the correctness of the ruling would depend on assumptions.

Thanks for offering to help.

Helen Morgan Director Technical Leadership | Hobart | Superannuation Australian Taxation Office Phone: | Mobile: Facsimile: 03 6221 0370 ATO | Working for all Australians

3

Kas, Nevin From: Sent: To: Cc: Subject:

O'Neill, Louise Monday, 16 May 2016 9:25 AM Mitchell, Rebecca (UMG); McKenzie, Angela; Pollock, Brad; Dreghorn, Daniel; Robertson, Aleric; Childs, Ros Allen, Phil; Gray, Eugenia FW: Military Super - immediate next steps - for this morning's phone hook-up [DLM=For-Official-Use-Only]

Hi all I know that most of you are away today so please note the feedback that Helen wants (can you include me in the CC) by this afternoon, for those of you that are here please ensure that you supply feedback by 2.00pm. For those of you that aren’t please make this your top priority tomorrow and send feedback to Helen asap. Please do not forget to cc me in

Regards Louise

Louise O’Neill Assistant Director-Interpretive Advice/UMG/SPR Superannuation Complaints Co-ordinator/Siebel Business Contact (SBC) Australian Taxation Office P M F 07 32133508

From: Morgan, Helen Sent: Monday, 16 May 2016 8:40 AM To: Talipski, Beata; Yazdan-Parast, Cambeez; Ramsay, Alastair; O'Neill, Louise; Allen, Phil; Kimpton, Violet; SimondsFletcher, Gaylene; Smith, Andrew P; Swan, Christine; SPR IA STO Cc: Affleck, Alexander; Lee, Andrew; Barnett, Mark Subject: Military Super - immediate next steps - for this morning's phone hook-up [DLM=For-Official-Use-Only]

Hi all (Team leaders, please forward as appropriate) As you are aware, we have issued

with his ruling on Friday afternoon.

The next step is focussed on re-engaging the clients. This morning we need to: 

Begin calling clients and introducing yourself as the new case officer. 1



Apologise for the delay in responding, however their ruling request raised complex issues the ATO needed to consider before responding.



The ATO has now formed it’s view as to how these benefits should be taxed, which is essentially that these payments are superannuation pension payments.



We acknowledge that this is not the answer the client was seeking.



We will be sending you some general advice shortly for you to consider. (NOTE: we aim to have this by the end of the week, but are not yet confident enough to commit to an exact date).



Confirm the client’s preferred channel for receiving this information



We will contact the client again when we send the general advice to them, just to let them know it’s on their way.



After we’ve sent the client the general advice, we will contact them to discuss with them, how they wish to proceed – taking into consideration: - if they disagree with our view, they do not need to continue with a Ruling, they can object to their income tax assessments - if you do wish to proceed with a Ruling, we may need to clarify some things with you, including refining the questions on which you’ve asked us to rule.

I would appreciate it if you could provide me, cc Cambeez and your team leader, of the initial reactions you experience by 2.00 this afternoon. Thanks

Helen Morgan Director Technical Leadership | Hobart | Superannuation Australian Taxation Office Phone: | Mobile: Facsimile: 03 6221 0370 ATO | Working for all Australians

2

Kas, Nevin From: Sent: To: Subject: Attachments:

Morgan, Helen Thursday, 8 September 2016 9:22 AM Kas, Nevin FW: Military Super - update in strategy being taken by SPR [DLM=For-Official-UseOnly] 20160616 Military Super Letter Final 17062016 ReCAST DC DR Markup.docx

From: Morgan, Helen Sent: Monday, 20 June 2016 9:34 PM To: Byrnes, Dan Cc: Huber, Lorraine; Duffy, Katherine; Ramsay, Alastair; Yazdan-Parast, Cambeez; Talipski, Beata; Tainsh, Melinda Subject: FYI: Military Super - update in strategy being taken by SPR [DLM=For-Official-Use-Only]

HI Dan As you’d remember, SPR have been working towards a strategy where we initially provide our clients with some general advice and then discuss their options with them, in particular if they disagree with our view if they wish to proceed with the Ruling (and possibly object to that) or object to their income tax assessment. That strategy and general advice have undergone some refinement over the last few weeks. Attached is the latest copy of the letter and general advice, as well as our strategy once the advice has issued. Please let me know if you have any questions/concerns. Thanks Helen Morgan Director Technical Leadership | Hobart | Superannuation Australian Taxation Office Phone: | Mobile: Facsimile: 03 6221 0370 ATO | Working for all Australians From: Morgan, Helen Sent: Monday, 20 June 2016 2:34 PM To: Richardson, Darryl; Affleck, Alexander; Dykstra, Nicole Cc: Ramsay, Alastair; Talipski, Beata; Yazdan-Parast, Cambeez; Tainsh, Melinda; Smith, Susie; Brown, Wayne Subject: FW: Military Super [DLM=For-Official-Use-Only]

Hi Darryl, Nicole and Alex

1

As discussed I’ve spoken this morning to Beata and Cambeez who were looking at how our “next steps” strategy and support/talking points for our case officers would need to change given the change in letter/advice. They felt that the letter in this form actually made things easier for case officers. In general the “next steps” approach would be: 

If the client advises they wish to withdraw their ruling request, and they have not lodged/amended an ITR in a way contrary to the ATO view – no further action



If the client advises they wish to withdraw their ruling request and they have lodged/amended an ITR in a way contrary to the ATO view and they have lodged/amended an ITR in a way contrary to the ATO view, advise that we will be amending their ITR in accordance with the law and that they will be able to object to that amendment once it issues. All SIC and penalties will be remitted to nil.



If the client doesn’t wish to withdraw before the outcomes of the Federal Court decision are known because they feel a Ruling beforehand may materially and detrimentally impact on their position, negotiate an extended due date.



If the client wishes to proceed with a ruling, we would rule and



o

clarify the period/s for which they are seeking the ruling  decline to rule for any year outside the period of review – advising that they will need to lodge an objection for these periods  rule and, for any periods for which they have lodged/amended an ITR in a way contrary to the ATO view, advise that we will be amending their assessments and, if they disagree with our ruling for these periods they will need to object to the amended assessment as they can’t object to our ruling for those years

o

clarify the questions on which we will rule, as we have done with previous applicants.

In line with our previous thinking we would be looking to co-ordinate action so all emails of a PDF version of the letter would be sent at broadly the same time all clients who have requested email as their preferred channel of communication

Please advise if you have any significant concerns with the strategy above as Cambeez will be sending out the support/talking points for staff for your consideration tomorrow. We will then arrange a meeting of case officers to discuss our approach. From an administrative/reporting perspective, we will also be asking case officers to update the general spreadsheet to allow us to report on the outcome of each case in more detail than would usually be possible:    

Withdrawn nil amendment Withdrawn $ amendment amount and years Rule nil amount Rule $ amendment amount and year

Where the client wishes their request to remain on hold pending the Federal Court outcome – the case will have a negotiated due date and be placed “hold” pending further information from the client.

Helen Morgan Director Technical Leadership | Hobart | Superannuation Australian Taxation Office 2

Phone: | Mobile: Facsimile: 03 6221 0370 ATO | Working for all Australians From: Richardson, Darryl Sent: Monday, 20 June 2016 9:56 AM To: Morgan, Helen Subject: FW: Military Super [DLM=For-Official-Use-Only]

Darryl Richardson Assistant Commissioner, Superannuation Australian Taxation Office P M F 08 7422 2202

From: Affleck, Alexander Sent: Monday, 20 June 2016 9:23 AM To: O'Halloran, James; Richardson, Darryl Cc: Dykstra, Nicole; Smith, Susie; Schembri, Linda Subject: FW: Military Super [DLM=For-Official-Use-Only]

James and Darryl, I have made some further suggested changes for consideration. Regards,

Alex Affleck Assistant Commissioner Tax Counsel Network Australian Taxation Office P M

From: Richardson, Darryl Sent: Saturday, 18 June 2016 4:38 PM To: O'Halloran, James; Affleck, Alexander Cc: Dykstra, Nicole; Smith, Susie; Schembri, Linda; Richardson, Darryl Subject: RE: Military Super [DLM=For-Official-Use-Only]

James I’m happy with this version. Made a couple of cosmetic changes to consider. 3

Regards Darryl

Darryl Richardson Assistant Commissioner, Superannuation Australian Taxation Office P M F 08 7422 2202

From: O'Halloran, James Sent: Saturday, 18 June 2016 3:12 PM To: Richardson, Darryl; Affleck, Alexander Cc: Dykstra, Nicole; Smith, Susie; O'Halloran, James; Schembri, Linda Subject: Military Super Dear Daryl and Alex, I have worked though a few things with Susie and Kathy of Friday. As I indicated late Friday I want to now proceed with a letter but no other reference to new law and focus on current law. I have since revisited the letter and want to see if we can recast – with a summary (in essence and a more detailed explanation) I have attached a copy – which I ask you to review for accuracy as I have paraphrased a few things – without reference to any view of the rulings themselves and perhaps some technical review. I still think it assists to pitch this way. Appreciate quick re work please. PLEASE USE THIS AS A MASTER COPY GOING FORWARD

James

James O’Halloran Deputy Commissioner, Superannuation Australian Taxation Office P

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Kas, Nevin From: Sent: To: Cc: Subject: Attachments:

Ramsay, Alastair Friday, 15 July 2016 10:51 AM Simonds-Fletcher, Gaylene; Talipski, Beata; Brown, Wayne; Elliott, Fiona O'Neill, Louise Military Super Decision [SEC=UNCLASSIFIED] P_QUD178_2016_793288.pdf

Hi everyone, In good news the court has ordered that it is a Superannuation Interest which confirms our position.

I’ll set up a conversation to discuss whether we need to make any changes to our general advice based on this decision and we will look to send out the advice next week. Regards, Al

Alastair Ramsay Acting Director, Superannuation Technical Leadership M

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Kas, Nevin From: Sent: To: Cc: Subject:

Brown, Wayne Friday, 22 July 2016 12:49 PM Childs, Ros; Robertson, Aleric; Pollock, Brad; McKenzie, Angela; Dreghorn, Daniel Mitchell, Rebecca (UMG); Gray, Eugenia FW: Military Super spreadsheet - new column for 'request to make ruling now'[SEC=UNCLASSIFIED]

FYI and/or FYA.

Wayne Wayne Brown A/g Assistant Director | Superannuation Advice

Australian Taxation Office P F 1300 669 846

_____________________________________________ From: Talipski, Beata Sent: Friday, 22 July 2016 10:39 AM To: De Silva, Rochelle; Wynne, Bonnie; Tse, Aubrey; Allardice, Louise; Brown, Wayne Cc: Ramsay, Alastair Subject: FW: Military Super spreadsheet [SEC=UNCLASSIFIED]

Hi all, As per Al’s request at the Military Super hook-up this morning, Bonnie has inserted another column to the spreadsheet in the Case Info area headed ‘Have come back since court case to request ruling’. Can I ask you to input ‘yes’ in this column if one of your applicants has now requested that we issue a private ruling. Site leaders, please send this email on to the case officers in your site working on military super cases. Thanks, Beata Talipski Manager | Sydney 23639 | Superannuation Australian Taxation Office Phone: ATO | Working for all Australians

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_____________________________________________ From: Wynne, Bonnie Sent: Friday, 22 July 2016 9:49 AM To: Talipski, Beata Subject: FW: Military Super spreadsheet [SEC=UNCLASSIFIED]

Hi Beata Here is the link J:\1. Team Information\SYD 23639\Military Super\Summary of MBBS applicants.xlsx

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Kas, Nevin From: Sent: To: Cc: Subject: Attachments:

Ramsay, Alastair Tuesday, 26 July 2016 5:33 PM O'Halloran, James; Richardson, Darryl Affleck, Alexander; Schembri, Linda RE: Military Superannuation PAck [DLM=For-Official-Use-Only] Military Super 20160725 TL Markup - Media response.docx; Military Super 20160725 TL Markup - Letter.docx; Military Super 20160725 TL Markup - Incoming Assistant Treasurer Brief.docx; Military Super 20160725 TL Markup - Talking point.docx

Hi James, Please find attached the clean versions of the documents. Regards, Al

Alastair Ramsay Acting Director, Superannuation Technical Leadership M

From: O'Halloran, James Sent: Tuesday, 26 July 2016 5:14 PM To: Richardson, Darryl Cc: Ramsay, Alastair; Affleck, Alexander; Schembri, Linda Subject: RE: Military Superannuation PAck [DLM=For-Official-Use-Only]

Darryl Could I trouble you to have clean and untracked copies so that we can finalise. Appreciated. James

James O’Halloran Deputy Commissioner, Superannuation Australian Taxation Office P

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From: Richardson, Darryl Sent: Tuesday, 26 July 2016 4:09 PM To: O'Halloran, James Cc: Ramsay, Alastair; Affleck, Alexander; Richardson, Darryl Subject: Military Superannuation PAck [DLM=For-Official-Use-Only]

James As per our conversation, we have updated the suite of documents as follows:  

 

General Guidance letter o changed the structure of the letter to bring our ‘decision’ more up front but we have not made any changes to the wording. Assistant Treasurer Brief o changed the order to improve the flow, and added some wording around the ‘effect’ of the what the applicants are seeking. There is complexity around this issue so have attempted to keep it as simple as possible. Talking Points o amended this to make the links between the Family law decision and our ruling clearer. Media Response: o Changed this along similarly to the AT brief.

We have run these updates by TCN. Referred for your consideration. Regards Darryl

Darryl Richardson Assistant Commissioner, Superannuation Australian Taxation Office P M F 08 7422 2202

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Kas, Nevin From: Sent: To: Subject:

Brown, Wayne Thursday, 28 July 2016 9:21 AM SPR IA 29161 Advice UMG; SPR IA 35956 Advice UMG FW: Military Super [SEC=UNCLASSIFIED]

FYI – I know not all of you are involved in this process, but just so you are in the loop. cheers

Wayne Wayne Brown A/g Assistant Director | Superannuation Advice

Australian Taxation Office P F 1300 669 846

From: Ramsay, Alastair Sent: Wednesday, 27 July 2016 5:52 PM To: Talipski, Beata; Brown, Wayne; Allardice, Louise; Elliott, Fiona; Grant, Kellie Subject: Military Super [SEC=UNCLASSIFIED]

Hi All, James has let us know that we won’t be sending anything out for Military Super this week. I am sorry for getting everyone ready to go prematurely (again). Al

Alastair Ramsay Acting Director, Superannuation Technical Leadership Australian Taxation Office P M

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Kas, Nevin From: Sent: To:

Subject:

O'Neill, Louise Friday, 5 August 2016 1:23 PM Allardice, Louise; Brown, Wayne; De Silva, Rochelle; Wynne, Bonnie; Tse, Aubrey; Vavra-Quintanilla, Joseph; Childs, Ros; Tesoriero, Robert; McKenzie, Angela; Mitchell, Rebecca (UMG); Dreghorn, Daniel; Pollock, Brad FW: Military Super letters - issue at 3pm Friday 5/8/2016 [SEC=UNCLASSIFIED]

Importance:

High

Hi all As per Wayne’s email below we need to ensure that all letters both emails/white mail are already to go at 3pm. If there is an officer not available to action these, leaders will need to find someone that can assist with getting these done and sent at 3 pm. If you have any trouble with meeting this time please let your leaders know immediately, I am aware that going by white mail doesn’t secure the client receiving them today but we need to have posted them. If there are any issues please make sure that you advise me Thanks Louise From: Brown, Wayne Sent: Friday, 5 August 2016 12:57 PM To: Childs, Ros; Robertson, Aleric; McKenzie, Angela; Mitchell, Rebecca (UMG); Dreghorn, Daniel; Pollock, Brad Cc: O'Neill, Louise; Levy, Rachel; Marsden, Anne; Brown, Wayne Subject: Military Super letters - issue at 3pm Friday 5/8/2016 [SEC=UNCLASSIFIED] Importance: High

Hi all Please prepare your letters for issuing at 3pm today, no sooner.

Wayne Brown A/g Assistant Director | Superannuation Advice

Australian Taxation Office P F 1300 669 846

From: Grant, Kellie Sent: Friday, 5 August 2016 12:26 PM To: Talipski, Beata; Brown, Wayne; Allardice, Louise; Elliott, Fiona Subject: FW: Phone Message from Darryl [SEC=UNCLASSIFIED] Importance: High

Hi all, 1

James and Darryl have now confirmed these letters need to be issued at 3pm this afternoon. Thanks ____________________________________ Kellie Grant

A/g Director| CTU Technical Leadership

Superannuation |MPO Phone:

Mobile: Email: [email protected] ATO I Working for all Australians

From: Richardson, Darryl Sent: Friday, 5 August 2016 12:19 PM To: O'Halloran, James Cc: Schembri, Linda; Talipski, Beata; Grant, Kellie; Richardson, Darryl; De Silva, Rochelle Subject: RE: Phone Message from Darryl [SEC=UNCLASSIFIED]

James We will issue the letters this afternoon. Regards Darryl

Darryl Richardson Assistant Commissioner, Superannuation Australian Taxation Office P M F 08 7422 2202

From: O'Halloran, James Sent: Friday, 5 August 2016 11:45 AM To: Smith, Susie; Mossop, Kathy; Richardson, Darryl Cc: Schembri, Linda; Niederle, Luke; Schembri, Linda Subject: RE: Phone Message from Darryl [SEC=UNCLASSIFIED]

Noted and agreed

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James O’Halloran Deputy Commissioner, Superannuation Australian Taxation Office P

From: Smith, Susie Sent: Friday, 5 August 2016 12:14 PM To: O'Halloran, James; Mossop, Kathy; Richardson, Darryl Cc: Schembri, Linda; Niederle, Luke Subject: RE: Phone Message from Darryl [SEC=UNCLASSIFIED]

Hi James She has been chasing the office and yes hasn’t heard anything further (even on her day off). If you need to go today then suggest you do that.

If we hear anything will let you know, but otherwise I think you could commit to 3pm issue. Regards Susie

Susie Smith Assistant Commissioner, Public Affairs, ATO Corporate Australian Taxation Office P M

From: O'Halloran, James Sent: Friday, 5 August 2016 12:01 PM To: Mossop, Kathy; Richardson, Darryl Cc: Smith, Susie; Schembri, Linda Subject: RE: Phone Message from Darryl [SEC=UNCLASSIFIED] Dear Kathy and Darryl, Appreciate we are in limbo re DVA but I really this we should issue letters today as DVA adviser has read report., Kathy – can we say that we will issue at 3 pm.

James

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James O’Halloran Deputy Commissioner, Superannuation Australian Taxation Office P

From: Dolan, Jack Sent: Friday, 5 August 2016 10:21 AM To: O'Halloran, James Subject: Phone Message from Darryl [SEC=UNCLASSIFIED]

Hi James, Darryl called to advise the following: -

Has not heard back from DVA or Parliamentary Services re: Military Super issue Darryl’s advice is to issue the Military Super letters today, pending your approval

Darryl is in the office, however, dealing with site issues. If he doesn’t answer Telepresence, he is available on the mobile. Regards, Jack

Jack Dolan Executive Assistant to James O’Halloran Office of the Deputy Commissioner, Superannuation Australian Taxation Office F 02 6252 0659 P M

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Kas, Nevin From: Sent: To:

Subject:

Talipski, Beata Tuesday, 16 August 2016 11:46 AM Wynne, Bonnie; Tse, Aubrey; De Silva, Rochelle; Childs, Ros; McKenzie, Angela; Pollock, Brad; Dreghorn, Daniel; Robertson, Aleric; Mitchell, Rebecca (UMG); Gray, Eugenia; Fleming, Talise-Marianne; Lyall, Megan; Simonds-Fletcher, Gaylene; O'Neill, Louise; Allardice, Louise; Brown, Wayne; Grant, Kellie RE: Military Super - update spreadsheet [DLM=Sensitive]

Hi everyone, As you are all becoming aware, the military super applicants have started to send an email with the same response. So that I can capture this information, can I ask you to input ‘standard email’ in the Proceed with Ruling or Withdrawn column of the spreadsheet. Thanking you, Beata Talipski Manager | Sydney 23639 | Superannuation Australian Taxation Office Phone: ATO | Working for all Australians

_____________________________________________ From: Talipski, Beata Sent: Monday, 15 August 2016 12:21 PM To: Wynne, Bonnie; Tse, Aubrey; De Silva, Rochelle; Childs, Ros; McKenzie, Angela; Pollock, Brad; Dreghorn, Daniel; Robertson, Aleric; Mitchell, Rebecca (UMG); Gray, Eugenia; Fleming, Talise-Marianne; Lyall, Megan; SimondsFletcher, Gaylene; O'Neill, Louise; Allardice, Louise; Brown, Wayne; Grant, Kellie Subject: FW: Military Super - update spreadsheet [DLM=Sensitive]

Hi everyone, I have been asked by Louise to give an update as to what’s happening with the Military Super cases. In order for me to give the most up-to-date information, can I ask you to update the spreadsheet. The main entries I am looking for are under Case Info. I have added a column titled Contact made since general advice letter sent Y/N. Can I ask you to fill this column out to capture if either the applicants have contacted you since receiving the letter or you have started to make the phone calls to the clients. Please also fill out the relevant information in relation whether they have given an indication as to whether they have decided to proceed with the ruling. Sorry for the short notice, but can I ask you to update the spreadsheet by 2.00pm today, as I need sent an update to Louise by this afternoon. Louise has indicated that she will be wanting an update each week, so can I ask you to keep filling the spreadsheet out on a regular basis. Thanking you, 1

Beata Talipski Manager | Sydney 23639 | Superannuation Australian Taxation Office Phone: ATO | Working for all Australians

_____________________________________________ From: Talipski, Beata Sent: Friday, 12 August 2016 3:30 PM To: Wynne, Bonnie; Tse, Aubrey; De Silva, Rochelle; Childs, Ros; McKenzie, Angela; Pollock, Brad; Dreghorn, Daniel; Robertson, Aleric; Mitchell, Rebecca (UMG); Gray, Eugenia; Fleming, Talise-Marianne; Lyall, Megan; SimondsFletcher, Gaylene; O'Neill, Louise; Allardice, Louise; Brown, Wayne; Grant, Kellie Subject: FW: Military Super - update spreadsheet [DLM=Sensitive]

Hi everyone, Just letting you know that there has been another column added to the spreadsheet under Case Info titled Likely to Object to capture those who withdraw their ruling request but are likely to object. Regards, Beata Talipski Manager | Sydney 23639 | Superannuation Australian Taxation Office Phone: ATO | Working for all Australians

_____________________________________________ From: Talipski, Beata Sent: Thursday, 11 August 2016 12:14 PM To: Wynne, Bonnie; Tse, Aubrey; De Silva, Rochelle; Childs, Ros; McKenzie, Angela; Pollock, Brad; Dreghorn, Daniel; Robertson, Aleric; Mitchell, Rebecca (UMG); Gray, Eugenia; Fleming, Talise-Marianne; Lyall, Megan; SimondsFletcher, Gaylene; O'Neill, Louise; Allardice, Louise; Brown, Wayne; Grant, Kellie Subject: Military Super - update spreadsheet [DLM=Sensitive]

Hi everyone, Now that we are getting close to asking the Military Super applicants to confirm whether they wish to withdraw their application or proceed with their ruling, an additional column has been added to the spreadsheet under Case Info to capture this information. Please enter W if they wish to withdraw and R if they want to proceed with their ruling. J:\1. Team Information\SYD 23639\Military Super\Summary of MBBS applicants.xlsx

Further, I know you are waiting on advice in relation to the years we will be ruling on. Kellie is seeking confirmation from TCN in relation to this and a few other issues and will get back to us when she has heard from TCN. Regards, 2

Beata Talipski Manager | Sydney 23639 | Superannuation Australian Taxation Office Phone: ATO | Working for all Australians

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