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ATO to delay enforcement activity on EPCI calculation

Miranda Brownlee
31 July 2017 — 1 minute read

Following lobbying efforts from the Actuaries Institute regarding an ATO interpretation on the use of particular methods for calculating exempt current pension income (ECPI), the ATO has agreed it will delay enforcing its views for at least 12 months.

Speaking at the Class Connect Conference, Heffron SMSF Solutions head of customer Meg Heffron said the ATO and the Actuaries Institute have been at odds over whether an SMSF that was fully in pension phase for any part of the year can use the unsegregated method of all of its assets for the whole of that tax year.

Ms Heffron said the common practice for funds that have both pension and accumulation interests during the year, and where there is only a brief period where they are solely in pension phase, is to use the unsegregated method for all income earned in the year.


“We would normally just get an actuarial certificate for the whole year and apply it to all of the year’s income, but the ATO’s view is that you can’t do that,” said Ms Heffron.

Speaking to SMSF Adviser previously, Accurium general manager Doug McBirnie said the ATO’s interpretation will mean that funds have to use more complex methods for calculating tax exemptions.

This will require significant changes to SMSF administrators’ systems and processes. Tens of thousands of funds are likely to impacted each year, Mr McBirnie said.

Given the fact it has always been common practice to use the unsegregated method for calculating ECPI in these situations, Ms Heffron said the ATO has now confirmed it will allow professionals to continue using this method for at least the 2016/17 annual returns.

The Actuaries Institute is trying to push them to at least 2017/18 as well, she said.

“So in our practice that is exactly what we’ll be doing. We’re getting a percentage for the whole year, and applying it to all of the income,” she said.

“In the meantime, in my lobbying role, we’re trying to push either the ATO to change their mind, or Treasury to change the law.”


Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

ATO to delay enforcement activity on EPCI calculation
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