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Pension tax-free lump sum and ATO data matching a Warning

Pension tax-free lump sum and ATO data matching a Warning

Old May 20th 2020, 8:58 pm
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Default Pension tax-free lump sum and ATO data matching a Warning

Back in 2017 when a pension matured I took a tax-free lump sum.

Due to coronavirus stimulus measures I became eligible, just, for JobSeeker (dole) payments. By just, they raised the income threshold and we (wife and I) had an income just below the threshold according to my determination of our combined income.

After a couple of weeks I am notified that the claim has been rejected so I double check the claim and find that an entry is included for quite a sizeable sum (15k AUD) exists which I did not add.
After some thought the sum was relatively close to the tax-free lump sum (I received just over 14k AUD) from 3 years ago. I then did a dummy, not to be submitted claim as an exact copy of what I believe I had submitted to ensure that I hadn't somehow added the amount myself. Low and behold, the 15K was added automatically.

Long story cut short it very much appears that the ATO's data matching has captured this amount and treated it as an annual payment. e.g. it came up, in the claim, as :- Foreign Income and Assets
Income and Assets outside Australia
Type/ Description Employment income / UNK
Country of asset/income UNITED KINGDOM
Income GBP 15002 Annually
Your Share 100%
Your Partner's Share 0%
I have successfully argued the case in regard to JobSeeker and have now had my claim approved. However, Services Australia (formerly Centrelink) can only extract data they can't change the data as that is owned by the ATO.

I am currently requesting, by the way of making a complaint (can't see any other way), that the data be corrected as this could impact my entitlements when I reach retirement age (above pension matured early as it was a S32 buyout).

I've also reported this as a data breach with the Office of the Australian Information Commissioner (OAIC) as there could well be other's affected. Saying that I also intend to try to ascertain what process treated a one-off payment as an annual payment. I believe that, due to the difference between the amount recorded (15k) and the amount I received (14k) that the data came not from the transaction/money transfer but that the data may have been passed by Aviva to the ATO and that the ATO have used their exchange rates rather than the actual exchange rate.
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Old May 24th 2020, 8:03 am
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Default Re: Pension tax-free lump sum and ATO data matching a Warning

Check with an accountant. Did you declare it as although tax free in UK the ATO will tax it.
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Old May 24th 2020, 10:35 am
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Default Re: Pension tax-free lump sum and ATO data matching a Warning

Rammygirl, it's not about taxation, rather that the ATO took a one off payment as being an annual payment and have distributed that information to other agencies.

The ATO here do the data matching, store the captured data and allow other agencies access to the data for fraud detection benefit entitlement validation. In short the ATO are telling agencies (automatically) that I get 15K every year from the UK when I got the 15K once (fortunately the agency accepted my explanation).

The actual taxation side is a moot point as the amount plus all other income that year was below the income threshold for being taxed.

As for handling the issue. I believe that I have that under control (ATO have under 30 days to correct the data, else it goes higher).

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Old May 24th 2020, 10:42 am
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Default Re: Pension tax-free lump sum and ATO data matching a Warning

I
happens in UK too. One off bonuses are assumed for tax when not payg. You just need to apply to have it real assessed.
happens all the time. Here husband had instalments for year ahead based on a one off income boost. They changed it when informed.

Unfortunately as they pass on info to Centrelink this can cause issues but is well recognised.

you still need to declare though.
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