Taxation Administration Act 1953 (Meaning of End Benefit) Instrument 2013

Administered by Department of the Treasury

Legislation au F2013L02050 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Taxation Administration Act 1953

Taxation Administration Act 1953 (Meaning of End Benefit) Instrument 2013

Subsection 133-130(2) in Schedule 1 to the Taxation Administration Act 1953 (the Act) provides that the Minister may, by legislative instrument, specify a superannuation benefit that is not an end benefit.

The purpose of this instrument is to ensure that family law superannuation payments are not end benefits under section 133-130 in Schedule 1 to the Act and therefore do not trigger an individual’s liability to pay Division 293 tax that has been deferred to a debt account.

The Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013 (the Amending Act) amended the Income Tax Assessment Act 1997 (ITAA 1997) and the Act to give effect to the Division 293 measure.

It did this by imposing tax at 15 per cent on certain superannuation contributions for individuals whose income broadly exceeds $300,000 to ensure that the tax concession received by such individuals is more closely aligned with the concession received by average income earners.

Special arrangements apply to contributions in respect of a defined benefit interest. The tax on these contributions is deferred to a debt account and the due date for payment deferred until the payment of the first superannuation benefit (the end benefit) from the relevant interest.

Certain benefits are excluded from being end benefits, including benefits specified by legislative instrument.

This instrument specifies that a family law superannuation payment is not an end benefit.

Family law superannuation payments are defined in subsection 307-5(7) of the ITAA 1997 as payments in accordance with Part VIIIB of the Family Law Act 1975, the Family Law (Superannuation) Regulations 2001, Part 7A of the Superannuation Industry (Supervision) Regulations 1994, Part 4A of the Retirement Savings Accounts Regulations 1997 or as specified in the regulations.

Broadly, family law superannuation payments arise in the context of property settlements following the end of relationships. In this situation, individuals have not in substance received a benefit from their superannuation fund, and as such it would not be appropriate to treat these payments as an end benefit.

The instrument applies from 1 July 2012. Subsection 133-130(3) of the Act expressly permits the application date despite subsection 12(2) of the Legislative Instruments Act 2003.

The retrospective operation of the instrument benefits affected individuals as it ensures they are not liable to pay their debt account for deferred tax as a consequence of an event that would otherwise constitute receiving an end benefit in relation to a defined benefit interest.

The Act does not specify any conditions that must be satisfied before this instrument is made.

Public consultation on an exposure draft, which excluded family law payments and payments for permanent incapacity, was undertaken between 7 June 2013 and 14 June 2013. Three submissions were received. These submissions suggested that payments for permanent incapacity and payments for terminal illness should be treated consistently, although no clear preference was expressed as to whether they should be included or excluded from the definition of ‘end benefit’. No other significant issues were raised.

The public consultation on the instrument followed both public and targeted consultation on an exposure draft of the legislation for the Sustaining the Superannuation Contribution Concession measure, which was held over a short period at the beginning of May 2013.

The legislative instrument commenced on 1 July 2012.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Tax Administration Act 1953 (Meaning of End Benefit) Instrument 2013

This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of this instrument is to specify that superannuation benefits that are family law superannuation payments do not trigger an individual’s liability to pay deferred tax under section 133-130 in Schedule 1 to the Act.

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms.

Conclusion

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Taxation Administration Act 1953 (Taxation Administration Act) was enacted to provide the legal framework for the administration of taxation laws in Australia. The Act was introduced to address the need for a comprehensive and effective system to enforce and manage the collection of taxes. The Taxation Administration Act 1953 (Meaning of End Benefit) Instrument 2013 was made under the authority of the Taxation Administration Act and was introduced to ensure that family law superannuation payments are not treated as end benefits, thereby preventing the triggering of deferred tax liabilities for certain superannuation contributions. The instrument was enacted by the Australian Government and aims to align the tax treatment of superannuation contributions more closely with the income levels of individuals. The policy objective is to ensure that high-income earners are taxed appropriately on their superannuation contributions, while also providing clarity and certainty in relation to family law superannuation payments.

Scope and Application

The Taxation Administration Act 1953 (Meaning of End Benefit) Instrument 2013 applies to superannuation benefits that are family law superannuation payments, as defined in the relevant Australian legislation, and specifies that these payments are not considered end benefits. This means that they do not trigger an individual's liability to pay Division 293 tax that has been deferred to a debt account. The instrument is applicable from 1 July 2012 and was designed to ensure that affected individuals are not liable to pay their debt account for deferred tax due to an event that would otherwise constitute receiving an end benefit in relation to a defined benefit interest. The instrument does not specify any conditions that must be satisfied before it is made, and it operates retrospectively to benefit those who would otherwise be liable for deferred tax. The Act does not extend or restrict application through subordinate instruments, and there are no stated exclusions, exemptions, or thresholds. The instrument is compatible with human rights as it does not engage any of the applicable rights or freedoms.

Key Provisions

The primary provision of the Taxation Administration Act 1953 (Meaning of End Benefit) Instrument 2013 (the Instrument) is the specification of family law superannuation payments as non-end benefits under section 133-130 of Schedule 1 to the Taxation Administration Act 1953 (the Act) (subsection 133-130(2)). This ensures that such payments do not trigger the liability to pay Division 293 tax that has been deferred to a debt account (subsection 133-130(3)). The Act defines family law superannuation payments as payments made in accordance with the Family Law Act 1975, the Family Law (Superannuation) Regulations 2001, or certain other regulations (subsection 307-5(7) of the Income Tax Assessment Act 1997). The Instrument imposes obligations on taxpayers to ensure that family law superannuation payments are not treated as end benefits, thereby avoiding the obligation to pay deferred Division 293 tax. It requires that these payments be identified and handled in accordance with the specified regulations and that they be clearly distinguished from other superannuation benefits. The Act does not impose specific conditions for the creation of this Instrument, but it does provide the mechanism for the Minister to specify such non-end benefits by legislative instrument. The Act does not explicitly outline offences, penalties, or consequences for breaches related to the classification of family law superannuation payments as non-end benefits. However, any failure to correctly classify these payments could potentially result in an individual being liable for the payment of deferred Division 293 tax, which was initially deferred. Division 293 of the Income Tax Assessment Act 1997 imposes a tax of 15 per cent on certain superannuation contributions for high-income earners, and the misclassification of family law superannuation payments could inadvertently trigger this tax liability. The Act provides for general penalties for non-compliance with tax laws, including fines and imprisonment, although specific penalties for this particular misclassification are not detailed in the Instrument.

Area of Law: Taxation Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Regulatory Standards; Civil Penalty Provisions

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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