Income Tax Assessment (1997 Act) Regulations 2021

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-30 - SUPERANNUATION  

Division 307 - Key concepts relating to superannuation benefits  

Subdivision 307-C - Components of a superannuation benefit  

SECTION 307-125.01   COMPONENTS OF MEMBER BENEFITS ACCRUING BEFORE 1 JULY 1999 PAID FROM THE MILITARY SUPERANNUATION AND BENEFITS SCHEME  

307-125.01(1)    
For the purposes of paragraph 307-125(4)(a) of the Act, subsection (2) specifies an alternative method for determining components of a superannuation benefit:

(a)    accruing before 1 July 1999; and

(b)    paid from the Military Superannuation and Benefits Scheme on or after 1 July 2007 in respect of a member who is below preservation age;

where the member chooses to use the alternative method.

307-125.01(2)    
The alternative method is a method chosen by the member which complies with subsection (3).

307-125.01(3)    
For the purposes of subsection (2), the maximum amount that the member may determine as a component of the person ' s member benefits accruing before 1 July 1999, whether by a single choice or cumulatively, may not exceed:

(a)    for the tax free component of the person ' s member benefits accruing before 1 July 1999 - the amount worked out under section 307-210 of the Act for the superannuation interest; and

(b)    for the taxable component of the person ' s member benefits accruing before 1 July 1999 - the amount worked out under section 307-215 of the Act for the superannuation interest.

Example:

A member of the Military Superannuation and Benefits Scheme has an amount of member benefits accruing before 1 July 1999 of $1,000. Just before the benefit is paid, the value of the tax free component is $800 and the taxable component is $200. Before reaching preservation age, the member takes a lump sum benefit of $900.

Under subsection (2), the member is able to determine the amount of the benefit that will be the tax free component and the amount that will be the taxable component of the benefit. However, subsection (3) prevents the member from treating more than $800 of the superannuation benefit as tax free.

Note:

A preserved superannuation benefit paid in respect of a member of the Military Superannuation and Benefits Scheme is paid in accordance with subsection 307-125(2) of the Act.

307-125.01(4)    
In this instrument:

Military Superannuation and Benefits Scheme
means the scheme that is established by clause 2 of the Military Superannuation and Benefits Trust Deed.

Note:

The Trust Deed is made under the Military Superannuation and Benefits Act 1991 .