The ruling sets out the commissioner’s proposed compliance approach for the 2018–19 and later income years in determining when a contribution has been made to the superannuation provider where the NALI rules apply. The ATO noted it should be read in conjunction with the recent Law Companion Ruling LCR 2021/2 Non-arm’s length income – expenditure incurred under a non-arm’s length arrangement.

“This ruling is about contributions made to a superannuation fund, an approved deposit fund or a retirement savings account,” the ATO said.

“It explains the commissioner’s views as to the ordinary meaning of the word ‘contribution’ in so far as ‘contribution’ is used in relation to a superannuation fund, approved deposit fund or retirement savings account in the Income Tax Assessment Act 1997 (ITAA 1997).

“It also contains changes to reflect the removal of the maximum earnings test for the purpose of deducting personal contributions, which commenced from 1 July 2017. The addendum which makes these changes, when finalised, will be a public ruling for the purposes of the Taxation Administration Act 1953.”

Part A of the ruling considers the ordinary meaning of contribution, how a contribution can be made and when a contribution is made, according to the ATO. Part B of this ruling explores some aspects of the rules in Division 290 that apply if a superannuation contribution for an employee or a personal contribution is to be deducted.

In a recent BT podcast, BT head of financial literacy and advocacy Bryan Ashenden said that, importantly, aspects of this ruling are also relevant to the meaning of “contribution” in the Superannuation Industry (Supervision) Act 1993 (SISA) and the Superannuation Industry (Supervision) Regulations 1994 (SISR). However, it should be noted that the definition of “contribution” in the SISR modifies the ordinary meaning of the word “contribution”.

“For example, where funds are electronically transferred to the super fund, the contribution is deemed to be made when the funds are credited to the super provider’s account,” he said.

“While a personal cheque contribution is post-dated and presented and honoured with cash or its electronic equivalent, the contribution is deemed to be the date on the cheque as long as the cheque is promptly presented and honoured. The release provides many examples and is very worthwhile reviewing for your client’s particular circumstances.”

An updated version of this ruling has been issued as a draft for public comment until 27 August 2021.