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Tax confusion on CSS/PSS
The two large Commonwealth superannuation schemes — the PSS and the CSS — may fall outside the terms of the superannuation tax cuts announced in last month’s Federal Budget.
In a newsletter to members, the Community and Public Sector Union said that while the tax changes would apply to accumulation schemes such as PSSap, AGEST and ARF, the picture was far less clear with respect to defined benefit schemes such as the CSS and the PSS, and this was something that was being worked out with the Government.
“In the Budget material an ‘untaxed’ fund is described as a fund where no employer contribution is made until the benefit is payable and contributions or earning tax is paid,” the newsletter said. “Contributors to the CSS and the PSS pay tax on their contribution, and the earnings of the fund is taxed. What is not taxed is the bulk of the employer component, which is currently part of the Government’s unfunded liability.”
The union said it had met with PSS/CSS chief executive Steve Gibbs and officers of the Department of Finance and Administration, but failed to reach an understanding as to whether the CSS and the PSS were considered to be taxed or untaxed schemes.
AUTHOR
Mike Taylor
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