Source: New places to play in Gungahlin
Amending transactions, balances, and events
When to amend
If you discover any material errors or omissions in the balances, contributions, or events you have reported, you must amend your reporting within 30 days of becoming aware of these errors under Section 390-115 of Schedule 1 to the Taxation Administration Act 1953 (TAA).
All monetary reporting errors are automatically considered material unless you’ve engaged with us to assess the specifics of a reporting issue as it relates to individual members and reporting years.
Materiality is the threshold above which missing or incorrect information is considered to have any impact on the decision-making of the user. For example, if a contribution has been incorrectly classified as an employer contribution and it should have been classified as personal, this impacts you, the member and us.
Even if the amount is small, if you’re aware of the error it must be corrected. You can’t make a decision based on an amount threshold as you don’t have the full details of the member’s taxation or financial position to understand the impact.
The obligation to report amendments has no time limitation. It exists regardless of when you become aware of the material error or omission, and is not altered by any subsequent events such as:
- closure of the member’s account
- commencement of a pension.
Example 1: amending errors on closed accounts
Debra was nearing retirement age and for the last 5 years she had made regular personal contributions to Ridgeway Super to increase her superannuation balance. She retired in August 2023 aged 60 and rolled out her entire balance to Summerleas Retirement Scheme. Unknown to Debra, the staff at Ridgeway Super had made errors in processing her contributions and had not reported any of the personal contributions it received for her.
Debra visited an accountant in September 2023 who realised she was entitled to a super co-contribution. She checked her records and contacted Ridgeway Super to ask why no co-contribution was received.
Ridgeway Super accepted that an error was made but told Debra that they could not amend their reporting because her account was now closed. Debra wrote to the ATO to complain about this refusal. We advised Ridgeway Super of its obligation to correct all material errors even after an account is closed and confirmed that amendments can be made to accounts that have been reported closed with us.
Ridgeway Super lodged the amendments more than 8 months after Debra first brought the error to their attention. We imposed a penalty on Ridgeway Super for failing to notify us within 30 days of becoming aware of a material omission.
We paid the co-contribution directly to Debra as she had retired.
End of example
Correcting systemic reporting errors
Ensure you have processes in place to identify and correct systemic reporting issues when you’re asked to correct an error for a member. Penalties may apply if you don’t take reasonable care.
If a member brings an error to your attention, you need to:
- correct the error for that member
- check to see if the same error impacts other members so you can proactively fix it for them as well.
Example 2: correcting systemic errors
In the previous example, Ridgeway Super checked whether the errors their staff made in processing Debra’s personal contributions had occurred for other members.
Ridgeway Super discovered another 3,000 members’ personal contributions weren’t reported to us. Ridgeway Super amended its reporting for these cases and developed new procedures to ensure the errors wouldn’t recur.
End of example
Only amend to correct a genuine error
Only amend your reporting where genuine errors have occurred. For example, you shouldn’t amend because a member has decided that they wish to change the amount or character of the contributions they made during the year to avoid an excess contributions tax liability.
Mistakes and returning contributions
In limited circumstances, you may be required to amend your reporting when the retrospective operation of the law causes a transaction to be unwound or become void. This may occur when you return contributions credited to a member’s account in restitution of a legal mistake of law or mistake of fact.
Contributions can’t be returned to a member because they regret making them or because they or their agents made an error in their decision to contribute.
Whether or not contributions have been returned is not determinative of whether or not they should be reported, or an amendment lodged to remove them from a previous report.
See ATO ID 2010/104Opens in a new window Excess contributions tax: restitution of a ‘mistaken’ contribution for an example of when a personal contribution will still be included in an individual’s non-concessional contributions for the financial year. This is where the trustee has repaid the contribution to the member in purported restitution of a mistaken payment when in fact there was no case for restitution on the grounds of mistake of law or of fact.
If you correctly return contributions in accordance with the law of restitution, you must amend your reporting so that the contributions aren’t counted towards the member’s contributions caps. However, in circumstances where the law of restitution doesn’t apply to unwind or void a transaction, you must still report the contributions (and not amend any previous reporting) even if they have been returned.
We apply considerable scrutiny to situations where contributions are returned to a member or they are re-characterised, after the member realises that they’ve exceeded a contributions cap. Understand your legal obligations in these situations and develop procedures and systems to ensure member requests of this nature are considered very carefully.
While we scrutinise these decisions, we recognise there are many circumstances where a decision to amend is correct and a failure to do so would be a failure to report correctly.
Example 3: provider administrative error
An employer made contributions to a provider for a number of employees in June 2022. The provider’s administrative staff misread the instructions the employer provided with the contributions and allocated too much to one member and too little to another. The error was discovered in December 2022, after the provider had reported to us for each of the affected members.
The provider had made a mistake of fact, to correct it they transferred amounts between the accounts of the affected members in December 2022. The reallocation of contributions was treated as having retrospective effect back to June 2022. Each member’s reporting was amended to reflect this.
The fund also needs to amend each member’s account balance as this will impact the calculation of total super balance for the member and what the member sees in ATO online services.
Example 4: member error in contribution classification
Walter, a self-employed investor, and businessman made a super contribution to Big Super without the involvement of any other person or entity, using a personal cheque drawing on a bank account in his own name.
In error, he entered this contribution on one of Big Super’s forms as a contribution made by an employer. He put his name down as both employer and employee and failed to indicate the nature of the contribution. He entered this despite a clear alert on the form that said, ‘All contributions will be treated as super guarantee contributions unless otherwise indicated’. Big Super recorded the contribution as an employer contribution and reported it as such to us.
Walter received an excess contributions tax assessment based on the reporting that indicated he had exceeded the concessional contributions cap. Walter asked Big Super to amend their reporting. He provided evidence that he had made the contribution himself. Using their internal records, Big Super also considered the obvious errors in the form Walter had given them and the cheque’s drawer.
Big Super agreed that the contribution had been mischaracterised by them when it was made based on Walter’s error. Even though Walter’s lack of care in completing the form was the source of the error, Big Super recognised its obligation to now amend the reporting involved, correcting what was now known to be a reporting error.
Example 5: amendment to contribution causing an amendment to account balance and accumulation phase reporting
In December 2022, a super fund realises that it has incorrectly recorded in its systems a $100,000 contribution from a member as $10,000 and had reported the $10,000 contribution to us on 30 May 2022. The fund reports an adjustment to the contribution by using the delta amount of $90,000 and the original details of the contribution. The fund also needs to amend the member’s balance as this will impact the calculation of total super balance for the member and what the member sees in ATO online services.
The fund reports the new balance with the effective date of the previous balance to overwrite the incorrect balance. The fund had also reported an accumulation phase value for this member which was different from the 30 June balance and therefore cancels that report and re-reports accordingly. All these amounts are re-reported within the 30-day period the fund must correct an error or omission.
End of example
Actioning amendments via different channels
Originally reported through MATS
For amounts relating to the 2018–19 year onwards, providers will correct reporting of contributions, annual amounts, acknowledged notices of intent and balances using member account transaction service (MATS).
Correcting the reporting of retirement phase events, personal injury and or structured settlement amounts, and accumulated phase value (APV) and retirement phase value (RPV), can only be done by cancelling the original lodgment and then lodging a new report with the correct information.
Correcting annual amounts and balances (excluding APV and RPV) can be done by overwriting the original or cancelling and re-reporting.
Originally reported through TBAR
Cancellations are most effective if completed through their original channel. However, anything reported on the transfer balance account report (TBAR) can be cancelled through MATS if both:
- a member account attribute service (MAAS) has been lodged for that account
- the information in the cancellation report exactly matches the original lodgment.
The new report with the correct information can be lodged using MATS.
If you need to correct retirement phase event reporting for an account which has never been on-boarded to MAAS, the re-reporting will need to occur through the original channel. We are exploring options for these amendments and will provide further guidance when available.
Originally reported through MCS
Amendments to anything reported on the member contributions statement (MCS) in the 2017–18 income year and prior years should be done using Online services for business. For more information, see Member contributions statement.