Pension Underpayments

The Draft Ruling provided that if insufficient pension payments were made in respect of a pension, the pension failed to satisfy the relevant requirements of the SIS Regulations and therefore for both SIS and tax purposes, there was no pension and, consequently, the superannuation interest supporting the pension was taken to be on the taxable side of the fund for the entire financial year.

The final Ruling continues this position.  However, the ATO has (by means of an administrative concession – issued 23 January 2013) indicated that minor underpayments (not more than 1/12th ) and underpayments due to matters beyond the control of the trustee may be disregarded so long as the underpayment is made good within 28 days of the trustee becoming aware of the underpayment.