Electronic Reporting Specification - Member Contributions Statement

1 Introduction

Who should use thESE INSTRUCTIONS

These instructions supplement the Member contributions statement (MCS) Electronic Reporting Specification version 10.0.0 (referred to in this document as the MCS specification) and are to be used with that specification in the development of software for the lodgment of electronic MCS in the approved form.

The impact of these additional instructions is only for MCS in relation to members with a defined benefit interest.

These instructions are notintended to be a guide to the relevant legislation.

WHY SUPPLEMENTARY INSTRUCTIONS WERE NEEDED

2013-14 MCS

Super CRT Alert 027/2014 issued in May 2014 which advised the regulations for calculating and reporting the ‘defined benefit contributions’ in the member contribution statements (MCS) for the 2013-14 and later years were made on 15 May 2014. The regulations and explanatory material can be found at

Thealert also advised that all defined benefit funds and their administrators are required to:

• Lodge all 2013-14 MCS by the due date 31 October 2014.

• If you have calculated the amount of the ‘Defined benefit contributions’ using the new regulations and have prepared the MCS based on that by the due date for lodgment then lodge the MCS with this field completed,

• If not, then you must zero fill the ‘Defined benefit contributions’ (6.121 in the specification) and lodge the MCS by 31 October 2014 and then amend the MCS as soon as you have calculated this amount, but by no later than 31 January 2015.

The Regulation provides that the amount of defined benefit contributions for an individual who is an accruing member with a funded benefit interest is the individual’s notional taxed contributions for the financial year but without the limiting the amount to the individual’s concessional contribution cap under grandfathered arrangements.

There are special rules for accruing members with interests other than funded benefit interests. Generally, these interests are in superannuation funds for Commonwealth, state and territory employees including constitutionally protected funds and certain public sector superannuation schemes.

2012-13 MCS

Super CRT Alerts 011/2014 and 014/2014 issued in March 2014 which provided updates regarding MCS reporting for Division 293 tax. Theyadvised the following:

The Government has made additional regulations on 19 February 2014to enable the assessment of Division 293 tax for high income members of defined benefits funds. The regulations are in respect of the 2013 MCS only. The new regulations are available here.

These regulations relate to ‘defined benefit contributions’ but only for the 2012-13 financial year. They prescribe an interim calculation method that relies upon the ‘notional taxed contributions’ amount that you have already reported. This means no further action is required for 2012-13. The ‘notional employer contributions’ field that you zero-filled for the 2012-13 MCS need not be amended.

2 Legal requirements

Reporting obligations

An MCS is a statement under either section 390-5 of schedule 1 of the Taxation Administration Act 1953 (TAA) or, for amendments, section 390-115 of the same Act. These require that a provider report accurate member information, including contributions information, in ‘the approved form’ to the ATO each year and also within 30 days when you identify an error or omission in your reporting.

The approved form for MCS electronic reporting is the MCS specification. As these instructions supplement and form part of the MCS specifications version 10.0.0 they also prescribe the approved form for correct reporting.

3Data field definitions and validation rules

Field definitions and edit rules

For the MCS specification version 10.0.0the requirement for field 6.121 Defined benefit contributions is modified as follows:

6.121 Defined benefit contributions–for each member with a defined benefit interest, the amount of any defined benefit contributions, worked out using the formula specified in the Income Tax Assessment Regulations 1997 for the purposes of Division 293 tax, including regulations 293-115.05 to 293-115.20.

In summary, these regulations provide for the following requirements:

Funded interests

For an accruing member with a funded benefit interest, this isthe amount ofthe notional taxed contributions you report for the financial year (that you calculatedunder Schedule 1A of the ITAA 1997 regulations for the purposes of the excess concessional contributions cap and reported at the Notional taxed contributions field) but withoutlimiting that amount to the member’s concessional contribution cap under grandfathered arrangements.

The amount musttherefore be equal to or greater than the amount reported at the Notional taxed contributions field.

Unfunded interests

For an accruing member with a defined benefit interest that is not a funded benefit interest, this isthe amountyou calculate using the method set out in Schedule 1AA of the ITAR 1997.

Providers reporting for these unfunded interests will need to report this amount even though there may be no requirement to report notional taxed contributions.

For a person who is a non-accruing member for the whole of the financial year, the amount of defined benefit contributions is nil andthis field must be zero-filled.

Previously the defined benefit contributionsfield was called Notional employer contributionsfor MCS lodgments for the 2013 financial year. For the 2013 financial year this field must be zero-filled.

For accounts that do not relate to a defined benefit interest this field must be zero-filled.

For the 2013-14 financial year you may zero fill this field for each member with a defined benefit interest and then amendthe MCS by 31January2015 to provide the information in accordance with the regulations.

For the 2013-14 financial year and later years this amount must be equal to or greater than the amount reported at the Notional taxed contributions field.This amount is nil for non-accruing members and accounts that do not relate to defined benefit interests.

If the Financial year field in the Provider identity data record is less than 2014, this field must be zero filled.

4More information

Superannuation contacts

For more information about the MCS and these supplementary instructions contact our Super Client Relationships Team by email

Software developers homepage

Software developers, both in-house and commercial, who are developing or updating electronic reporting software, should use this specification for developing the application.

The software developers homepage website at has been designed to facilitate a partnership between the software development industry and the ATO and provides the following:

• a self-testing model allowing software developers to check their product, package, program or system against Tax Office test scenarios or relevant format testing,
• access to information relevant to all software developers to assist in the development of tax-related software, and
• a software product register which tax agents and businesses can access to find products that will assist in meeting tax-related obligations.

Lodging the Declaration of Compliance automatically lists the product(s) on the software developers homepage Product Register. Software developers that have listed their product on the Product Register may direct users to the website at for confirmation that the product has met ATO requirements. Developers who do not need to register in order to list products may still receive emails detailing significant issues by using the subscription service available from the site. Registering or subscribing for updates is recommended for both in-house and commercial software developers.

For more information on the software developers homepage website, contact SILU:

• email , or
• phone 1300 139 052