Purpose

This Departmental Instruction provides information about system changes made to profit assessment for early withdrawal from superannuation fund investments.

Background

Information about changes to the assessment rules for superannuation fund investments has previously been provided in:

• A Stateline 'Changes to Superannuation Rules' issued in July 2001; and
• A Stateline 'Changes to Profit Assessment Rules for Early Withdrawals from Super Fund Investments Effective from 1 July 2001' issued in September 2001 that advised procedures for handling cases manually pending system changes.

Interim Manual Procedures

Manual procedures entailed:

• State Office staff checking a client's age at the date of a withdrawal from a superannuation fund investment to ensure that profit is not added for any client aged 55 or older; and
• National Office staff identifying cases for referral to State Offices for manual processing for deletion of profit where the client would attain 55 years prior to the 12 month anniversary of the profit withdrawal date.

System Changes

System changes to PIPS PC, $FORT Processing and Advices have been completed with implementation occurring on 24 April 2002.  These changes fully replace the manual procedures previously advised.

PIPS PC

PIPS PC has the following changes:

• The Add Profit facility on the Managed Investment and Profit screens has been changed to prevent profit being added where a client has attained 55 years on or after 1/7/01;
• New warning messages will appear if profit is added to or present in the assessment with an expiry date prior to the current date.  These warning messages cater for profit expiry at age 55 or after 12 months as appropriate.
• Calculate History will automatically delete profit that has an expiry date prior to or on a History date.  Note, however, that Calculate History will only delete profit from the correct expiry date if the expiry date coincides with a History date; if not, the deletion will be from a later date, and another PIPS PC case will be needed to delete profit from the correct expiry date.  A warning message will appear whenever Calculate History deletes profit.

$FORT

The Profit Delete sub-program has been changed to ensure that profit is deleted from the earlier of 12 months from the date of the withdrawal or the date the person attains 55 years of age.

Advices

Minor wording changes have been made to advices to correctly refer to when the profit deletion has occurred.

NO Contact

• The National Office contact officer for these system changes is Peter Feinler (08) 8290 0441
• The National Office contact for policy advise on these cases is Ian Williams (02) 6289 6382