A recent case heard before the Administrative Review Tribunal (ART) has redefined what may be considered a superannuation pension and may have an impact on the ATO’s recent statements that such an income stream will cease when it fails to make minimum payments, two lawyers have noted.
Sladen principal Phil Broderick and special counsel Philippa Briglia said in the case of QWYN and Commissioner of Taxation (Taxation and business) [2025] ARTA 83, heard on 5 February, the ART determined regular disability payments described as a superannuation income stream were a super income stream for tax purposes and not a number of disability lump sums.
“The ART considered the second limb of the definition of income stream in the Income Tax Assessment Regulations 1997, which defined an income stream to be a pension within the meaning of the Superannuation Industry (Supervision) Act 1993 (SIS Act) that commenced before 20 September 2007 – as was the case here,”, Broderick and Briglia stated in a post on their firm’s website.
“Section 10(1) of the SIS Act defines a pension to include a benefit taken to be a pension for the regulations, such as an account-based pension.”
The two lawyers noted the ART ruled the definition would not only include pensions defined in the regulations, but also include those under their ordinary meaning, and thus included income streams even where they did not meet the criteria of the regulations.
“Therefore, the ART found the relatively fixed and regular payments received by the taxpayer from his disability payments from the super fund were a pension in accordance with the ordinary meaning of that term,” the pair added.
They pointed out this decision, while related to a unique set of circumstances and possibly limited in its relevance to other cases, may conflict with the ATO’s stance in Taxation Ruling (TR) 2013/5.
“It does raise a further question on the ATO’s view of pensions and, in particular, the ATO’s view that pensions cease as a result of failure to make minimum pension payments [under TR 2013/5],” they said.
“That is, here, the ART has confirmed that pensions have a common law meaning outside of that of the superannuation regulations. Such pensions will not cease if a minimum pension is not paid in a particular year.”
