We have received the following updated information from the Australian Taxation Office regarding the 2018 PAYG payment summary.

The changes to the information on the 2018 PAYG payment summary came about following the changes from 1 July 2017 to the way capped defined benefit income streams are taxed as a result of the introduction of the $1.6 million Transfer Balance Cap and the associated defined benefit income cap.

Many of the pensions paid by the Commonwealth Superannuation Corporation (CSC) are capped defined benefit income streams.

The taxation of these income streams has changed if:

• you are 60 years of age or older, or under 60 and in receipt of a death benefit income stream where the deceased was 60 or over at the  time of death; and
• the total income you receive from all of these income streams is in excess of your defined benefit income cap for the year.

Generally your defined benefit income cap for 2017/18 will be $100,000, although this may be reduced in some circumstances, including if you turn 60 during the year or you were over 60 and started to receive income from a capped defined benefit income stream for the first time during that year.

If your income from all of your capped defined benefit income streams exceeds your defined benefit income cap you may:

• need to include more of your pension income in your assessable income; and/or
• have a reduced entitlement to the tax offset on the untaxed element of your pension.

Superannuation funds no longer pre-populate payment summaries with your entitlement to the tax offset on your untaxed element as they don’t know if you have other income streams from other funds which will affect your entitlement to the offset. Your entitlement to the offset will need to be determined as part of lodging your income tax return.

myTax allows you to prepare your tax return using an integrated tool that prefills all of your payment summaries and provides a two click solution to ensure that you include the correct income and offset in your income tax return.

A stand-alone version of the tool that can be used at any time is available here or can be found by going to ato.gov.au and typing QC 55642 in the search box.

The instructions for the paper return were also updated for the 2017/2018 year. A PDF of the instructions is available at Individual tax return instructions 2018 PDF.  The guidance to help you understand if you need to include additional pension income in your return are on pages 15 and 16 and the guidance to help you calculate your entitlement to the offset is on page 41.

There are certain circumstances where your defined benefit income cap is reduced and the calculation of your additional assessable income and tax offset becomes more complex.

The ATO encourages you to use the stand-alone version of the tool or myTax if you received income from a capped defined benefit income stream and

• turned 60 during 2017-18; or
• were 60 years or older for the year but started to receive a capped defined benefit income stream for the first time during the year; or
• were 59 years or younger and their your capped defined benefit income stream was a death benefit income stream where the deceased member was 60 or over at the time of death.

If you are lodging a paper return you will need to go here for more detailed assistance in completing their return. You can also find these more detailed instructions by going to ato.gov.au and typing QC 54665 in the search box.

Please note, the following message in the August 2018 issue of SuperTime, “Your tax offset amount has already been reported to the ATO and is not included in your statement. The offset will still be applied to your pension, but now the ATO will calculate your offset and ensure that you still enjoy its benefits” was incorrect.  As explained in the above, CSC was not required to report your offset to the ATO and did not do so.

This information has now been updated on the CSC website here https://www.csc.gov.au/Members/News/Changes-to-your-2018-PAYG-pension-summary/

In summary:

If your only capped defined benefit income stream is from CSC and the income you received is less than your defined benefit income cap, you will still be entitled to a 10% offset on your untaxed element.

If you:

• use myTax, the offset amount will be calculated for you by the integrated tool using payment summary information reported to us;
• lodge a paper return, you will need to calculate and report this information to us in line with the instructions for the paper form.

If you need to lodge an amended tax return, the process for amending your tax return can be found here. You can also find the instructions by going to ato.gov.au and entering QC 54207 in the search box.

Transfer balance account details available on myGov

The ATO also informed SCOA that you can now go on line to look at your transfer balance cap information. The information available includes the current balance of your transfer balance account as well as details of each event that has been reported to and processed by the ATO that make up your transfer balance account.

This is particularly important for individuals who may have a capped defined benefit income stream and who are considering starting an account based pension, including a death benefit income stream, and want to make sure they don’t exceed their transfer balance cap. Individuals can print the information or download it and email it to their advisor.

Click here to see some screen shots which illustrate the type of transfer balance account information individuals are able to see on line for your information.

We hope this information is of assistance.  If you still have some questions, please call National Office on 02 6286 7977.

SCOA Australia
24 September 2018

The Acting President of SCOA Australia, John Blount, today announced that SCOA’s National Committee has recommended that the organisation cease operations by the end of June 2019.

SCOA AUSTRALIA CLOSURE STATEMENT

It is with much regret and a heavy heart that SCOA is announcing that SCOA Australia National Committee at its meeting on 9 August 2018 made the difficult in principle decision to close the organisation at the end of June 2019.

The Committee has had to confront the awkward reality of the future of SCOA Australia, given the age profile of its members and the effect of consequent declining membership.  The inexorable pressure of demographics and finances over a number of years have made this inevitable at some point; it has only been a matter of timing. Our present membership is ageing, and paid membership is falling by an average of around 11% p.a.

The changing nature of public sector retirement schemes, from the old CSS and PSS, has apparently diminished interest by many public servants in our core concerns, with all new government employees now joining the PSS accumulation scheme.  It is also the fact that the whole workplace context has changed, so that for many the public sector is no longer a life-long career.  The average duration of a PSS member is between 6-8 years.  Public sector superannuation arrangements are only one aspect of their overall superannuation and financial arrangements. Various strategies, including the creation of SCOA Australia as a national body in 2012, have slowed but failed to reverse this trend.

The perceived poor prospect for any significant indexation reform in the reasonably foreseeable future has not assisted.  Nor has our voice been strengthened by the falling membership numbers. All of this has been reflected in the persistent and increasing difficulty in filling voluntary positions at all levels (including an insufficiency of nominations for the full National Committee).

The National Committee has also continued to monitor SCOA’s financial situation.

SCOA’s income relies upon membership subscriptions.  These are no longer sufficient to cover SCOA Australia’s running costs, even after an ongoing program to reduce costs wherever possible.  Even taking into account our reserves, it did not appear possible to continue to operate effectively beyond sometime in 2020 at the very latest.

Unfortunately, all the information before the Committee led in the same direction and towards the inevitable conclusion. The Committee considered and rejected as impractical moving to a significantly scaled down operation.  To properly administer membership and to service members we need essentially the present sized operation.  The unfortunate reality is that there is simply not the critical mass to carry on meaningfully.

The view of the National Committee was that it would be more responsible to close in an orderly fashion while still reasonably effective and financially solvent, rather than to delay a year or two and end up in futility and possible insolvency. The Committee believes that it would not be fair or reasonable for SCOA to accept any further subscriptions or donations once this decision has been made.  This then led to the conclusion that SCOA cease operations on 30 June 2019.

The recommendation will be put to members through a Special Resolution in accordance with Rules 42.1 and 42.2, at a Special General Meeting which we anticipate would be held in Canberra in 2019.  Members will be kept informed in this regard in the next issues of SuperTime.

All the National Committee members are dismayed at this unfortunate turn of events.  We all knew SCOA had a limited life but we hoped we could at least reach its 100^th birthday in 2023.  However the continuing decline in membership has put paid to that hope.

Although SCOA has achieved a great deal for members over the years, we have to admit that governments of both persuasions have won out in their refusal to give us fair treatment, in particular with regard to indexation.  This is our biggest disappointment.  Our members are entitled to not trust the main parties again on this issue.

In spite of the fact that SCOA’s credibility must be adversely affected by news of imminent closure, we will continue to press both government and opposition with representations for fair treatment in indexation, taxation and some social security issues.  SCOA owes that to the many members both past and present who have faithfully supported SCOA and encouraged us in our efforts.

Thank you all for your many years of loyal support for this organisation.  We have more to be proud of than to regret.

Peter Illidge
PRESIDENT
SCOA Australia Incorporated

10 September 2018

Click here to read SCOA’s press release.

SCOA Australia has welcomed the announcement today by Prime Minister Scott Morrison to drop the policy to increase the age pension age to 70 as announced in the ill-fated 2014 Budget.

The Acting President, John Blount, said that our members are already doing it tough; having to wait another three years to access the extra income of a part-age pension would have made life even more difficult for many future CSS and PSS pensioners.

Click here to read the full text of the press release

Canberra 5 September 2018

SCOA Australia has today written to Opposition Leader Bill Shorten in similar terms as the letter sent to Prime Minister Scott Morrison to raise the issues of indexation and taxation of CSS and PSS pensions and to seek the ALP’s position on these issues.

Click here to read the letter to Bill Shorten

Canberra 29 August 2018

SCOA Australia has today written to Prime Minister Scott Morrison to congratulate him on his appointment as Prime Minister of Australia and to raise the issues of indexation and taxation of CSS and PSS pensions with the new Prime Minister.

Click here to read the letter to Prime Minister Scott Morrison

Canberra 27 August 2018.

SCOA Australia has today sent a letter to the Australian Taxation Office pointing out the many challenges that have arisen as a result of the changes made to the information included in the 2018 PAYG summaries and the 10% tax offset.

Click here to read the letter to the ATO.

Canberra 27 August 2018

Tax Help program

If you need help lodging your tax return, you may be eligible for the Tax Help program provided by the Australian Taxation Office.

Tax Help is a network of ATO-trained and accredited community volunteers who provide a free and confidential service to help people complete their tax returns online using myTax.

Tax Help is available from July to October in all capital cities and many regional areas across Australia.

Click here to read about the program and find out if you are eligible to access it https://www.ato.gov.au/Individuals/Lodging-your-tax-return/Tax-Help-program/

Canberra, 24 July 2018.

Many members contacted SCOA in early July 2018 after they received their payment summary from the Commonwealth Superannuation Corporation (CSC) and discovered that the amount showing the 10% tax offset was not included in the summary as it usually was.

We have received the following information from CSC in this regard:

So that your 2017-18 tax return is easier to complete, the Australian Taxation Office (ATO) has made some changes to what is reported on PAYG summaries—these changes apply to all superannuation funds, not just CSC. This means some of the information about your pension that used to be displayed on your summary is now reported directly to the ATO.

In particular, your tax offset amount has already been reported to the ATO and is not included on your statement. The offset will still be applied to your pension, but now the ATO will calculate your offset and ensure that you still enjoy its benefit.

The specific changes depend on your age.

If you are 60 or older:

• The ATO no longer requires the tax offset to be shown on the statement—we have already reported this amount to the ATO so you do not need to enter it yourself when completing your tax return.
• Your payment summary includes more information, including tax-free amounts. You may not have seen this information on your summary before, but it does not change the amount of tax you pay.

If you turned 60 last financial year:

• You will have received two payment summaries, one covering the time up until you turned 60, and one for the period after that.

NOTE

Some people have been asking for a replacement PAYG statement that includes the offset amount. However, because of the new ATO requirements, we aren’t able to issue a statement that shows the offset amount.

More information about these changes and why they were made is available on the ATO website, ato.gov.au or by phoning 13 28 61 as well as on the CSC website at https://www.csc.gov.au/Members/News/Changes-to-your-2018-PAYG-pension-summary/

Canberra 9 July 2018

The Australian Council of Public Sector Retiree Organisations (ACPSRO) today threw its support behind a call by the Defence Force Welfare Association (DFWA)’s call to have the Commonwealth Superannuation Corporation included in the Banking Royal Commission’s Terms of Reference.

Go to ACPSRO’s page to read the DFWA’s arguments, their open letter to the Prime Minister and ACPSRO’s letter to the Prime Minister.

Canberra 26 June 2018.

Following last week’s federal Budget, SCOA has provided a summary of the proposed measures that might affect some SCOA members.

SCOA will provide more information about the measures and the relevant legislation as it comes to hand, both on the website and in SuperTime.

CLICK HERE to read or download the budget summary.

Canberra 15 May 2018