{"id":"F2022L01347","name":"Income Tax: Alternative method for calculating the tax free component and taxable component of a superannuation benefit paid during the 2022–23 financial year for recipients of certain pensions under the Defence Force Retirement and Death Benefits Act 1973 and the Trust Deed referred to in section 4 of the Military Superannuation and Benefits Act 1991","slug":"f2022l01347","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":329873,"registerId":"commonwealth-F2022L01347-current","compilationNumber":null,"startDate":"2026-04-08","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1. Name of instrument","sectionType":"part","heading":"1. Name of instrument","content":"## 1. Name of instrument\n\nThis determination is the Income Tax: Alternative method for calculating the tax free component and taxable component of a superannuation benefit paid during the 2022–23 financial year for recipients of certain pensions under the Defence Force Retirement and Death Benefits Act 1973 and the Trust Deed referred to in section 4 of the Military Superannuation and Benefits Act 1991.","sortOrder":0},{"sectionNumber":"2. Commencement","sectionType":"part","heading":"2. Commencement","content":"## 2. Commencement\n\nThis instrument commences on the day after it is registered on the Federal Register of Legislation.","sortOrder":1},{"sectionNumber":"3. Alternative method","sectionType":"part","heading":"3. Alternative method","content":"## 3. Alternative method\n\nFor subsection 307-125(5) of the ITAA 1997, this instrument specifies an alternative method for calculating the tax free component and taxable component of superannuation benefits specified in section 4 that are paid during the 2022–23 financial year. The alternative method is as follows:\n\n(1) The superannuation benefit is taken to be paid in a way such that the tax free component and the taxable component of the benefit bears the same proportion to the amount of the benefit that the corresponding component of the superannuation interest identified in subsection 3(2) bears to the value of the superannuation interest.\n\n(2) For the purposes of subsection 3(1), the superannuation interest is the superannuation interest supporting a pension specified in section 4. For the purposes of this section, assume that the pension is a superannuation income stream.\n\n(3) For the purposes of subsection 3(1), determine the value of the superannuation interest and the amount of the tax free component and the taxable component of the interest when the relevant pension commenced.\n\n(4) For the avoidance of doubt, the tax free component and taxable component amounts determined in accordance with the alternative method set out in subsection 3(1) are subject to any modification to the tax free component and taxable component that may arise due to the application of section 307-145 or section 307‑150 of the ITAA 1997.","sortOrder":2},{"sectionNumber":"4. Application","sectionType":"part","heading":"4. Application","content":"## 4. Application\n\nThis instrument applies to the following superannuation benefits paid in the 2022-23 financial year, including any benefits paid before the commencement of this instrument:\n\n(1) superannuation lump sums paid to an individual as a pension in accordance with subsection 31(1) or subsection 32(1) of the DFRDB Act that commenced on or after 20 September 2007;\n\n(2) superannuation lump sums paid to an individual (reversionary beneficiary) as a pension in accordance with subsection 39(1), subsection 42(1) or subsection 43(1) of the DFRDB Act, where the primary beneficiary received superannuation benefits as a pension in accordance with section 31 or subsection 32(1) that commenced on or after 20 September 2007;\n\n(3) superannuation lump sums paid to an individual (non-reversionary beneficiary) as a pension in accordance with subsection 43A(1) or 43A(2) or subsection 44(2) of the DFRDB Act that commenced on or after 20 September 2007;\n\n(4) superannuation lump sums paid to an individual as a pension in accordance with rule 27(1) or rule 28(1) of the MSBS Rules that commenced on or after 20 September 2007;\n\n(5) superannuation lump sums paid to an individual (reversionary beneficiary) as a pension in accordance with rule 42(1), rule 42(3), or rule 46(1) of the MSBS Rules, where the primary beneficiary received superannuation benefits as a pension in accordance with rule 27(1) or rule 28(1) that commenced on or after 20 September 2007.","sortOrder":3},{"sectionNumber":"5. Definitions","sectionType":"part","heading":"5. Definitions","content":"## 5. Definitions\n\nDFRDB Act means the Defence Force Retirement and Death Benefits Act 1973.\n\nITAA 1997 means the Income Tax Assessment Act 1997.\n\nMSBS Act means the Military Superannuation and Benefits Act 1991.\n\nMSBS Rules means the Military Superannuation and Benefits Rules set out in the Schedule to the Trust Deed referred to in section 4 of the MSBS Act.\n\nTerms in this instrument that are defined in the Income Tax Assessment Act 1997 have the same meaning as in that Act.\n\nTerms in this instrument that are defined in the Defence Force Retirement and Death Benefits Act 1973 and the Military Superannuation and Benefits Act 1991 have the same meaning as in those Acts, to the extent relevant.\n\n6. Repeals\n\nEach instrument that is specified in Schedule 1 to this instrument is repealed as set out in the applicable items in that Schedule.\n\nSchedule 1","sortOrder":4},{"sectionNumber":"Income Tax: Pre-1 July 2021 alternative ","sectionType":"part","heading":"Income Tax: Pre-1 July 2021 alternative method for calculating the tax free component and taxable component of a superannuation benefit for recipients of certain pensions under the Defence Force Retirement and Death Benefits Act 1973 and the Trust Deed referred to in section 4 of the Military Superannuation and Benefits Act 1991 (F2021L00901)","content":"## Income Tax: Pre-1 July 2021 alternative method for calculating the tax free component and taxable component of a superannuation benefit for recipients of certain pensions under the Defence Force Retirement and Death Benefits Act 1973 and the Trust Deed referred to in section 4 of the Military Superannuation and Benefits Act 1991 (F2021L00901)\n\n1 The whole of the instrument","sortOrder":5},{"sectionNumber":"Income Tax: Alternative method for calcu","sectionType":"part","heading":"Income Tax: Alternative method for calculating the tax free component and taxable component of a superannuation benefit paid during the 2021—22 financial year for recipients of certain pensions under the Defence Force Retirement and Death Benefits Act 1973 and the Trust Deed referred to in section 4 of the Military Superannuation and Benefits Act 1991 (F2022L00004)","content":"## Income Tax: Alternative method for calculating the tax free component and taxable component of a superannuation benefit paid during the 2021–22 financial year for recipients of certain pensions under the Defence Force Retirement and Death Benefits Act 1973 and the Trust Deed referred to in section 4 of the Military Superannuation and Benefits Act 1991 (F2022L00004)\n\n2 The whole of the instrument","sortOrder":6}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This is a routine annual renewal of a longstanding administrative determination. The scope remains tightly constrained to providing an alternative tax calculation method for specific DFRDB and MSBS pensions. It does not expand beyond the original purpose established in earlier iterations (2013 onwards). The repeal of previous years' instruments and replacement with a 2022–23 version represents standard temporal updating rather than scope creep."},"complexity_factors":["Multiple nested cross-references to external legislation (ITAA 1997, DFRDB Act 1973, MSBS Act 1991, and the MSBS Trust Deed Rules)","Five distinct categories of beneficiaries with subtly different eligibility conditions (primary beneficiaries, reversionary beneficiaries, non-reversionary beneficiaries) across two separate superannuation schemes","Specific date threshold (20 September 2007) that acts as a cutoff for application, requiring historical knowledge of scheme changes","Assumption-based legal fiction in section 3(2) where pensions are deemed to be 'superannuation income streams' for calculation purposes","Conditional logic requiring tracking of primary beneficiary status through to reversionary beneficiaries (e.g., section 4(2) and 4(5))","Interaction with modification rules in sections 307-145 and 307-150 of the ITAA 1997 noted as 'for avoidance of doubt' — indicating potential interpretive complexity","Repeal schedule removing two previous annual determinations, creating a temporal layering effect"],"plain_english_summary":"This determination sets a special, simplified method for 2022–23 to calculate the tax‑free and taxable portions of certain military pensions from the DFRDB and MSBS schemes. It affects retired ADF members and eligible beneficiaries whose pensions began on or after 20 Sep 2007, locking proportions at pension commencement to simplify tax reporting and provide certainty."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"This instrument continues a year‑specific alternative calculation approach for the same classes of DFRDB and MSBS pensions (those commencing on or after 20 September 2007) for the 2022–23 year, replacing prior year instruments. It does not expand the cohort beyond those pension types and commencement dates, but it does apply to benefits paid earlier in the financial year (including before the instrument’s registration)."},"complexity_factors":["Cross‑references to the Income Tax Assessment Act 1997 (notably subsection 307‑125(5) and modification rules in ss 307‑145 and 307‑150) require application of external statutory rules.","Requires valuation of the supporting superannuation interest 'when the relevant pension commenced' — which may need historical actuarial or accounting calculations.","Applies to multiple pension types (lump sums taken as pensions, reversionary and non‑reversionary beneficiaries, and MSBS rules) with different eligibility triggers and commencement dates.","Retrospective coverage within the 2022–23 financial year (including amounts paid before instrument commencement) creates filing, adjustment and timing issues for administrators and recipients.","Repeals prior year instruments (Schedule 1), so administrators must replace earlier methods with this year's specification and ensure consistency.","Dependencies on defined terms in three different Acts (ITAA 1997, DFRDB Act, MSBS Act) increase interpretive complexity and reliance on external definitions."],"plain_english_summary":"This instrument sets an alternative method for working out the tax‑free and taxable parts of certain Defence Force superannuation benefits paid in the 2022–23 year. It treats the benefit as split in the same proportion as the underlying superannuation interest at the time the pension began. It affects eligible DFRDB and MSBS pension recipients and the administrators/ATO who must apply the new proportioning, and therefore changes reported taxable amounts and tax obligations for those payments."}},"importantCases":[],"_links":{"self":"/api/acts/f2022l01347","history":"/api/acts/f2022l01347/history","analysis":"/api/acts/f2022l01347/analysis","conflicts":"/api/acts/f2022l01347/conflicts","importantCases":"/api/acts/f2022l01347/important-cases","documents":"/api/acts/f2022l01347/documents"}}