What is the Douglas Decision?

In 2020, the Federal Court ruled that from 1 July 2007, specific invalidity pension payments were classed as lump sums, not superannuation income stream benefits. ​

In response to this decision, the Australian Taxation Office (ATO) created the Veteran’ Superannuation (invalidity pension) Tax Offset (VSTO) to ensure that veterans are not disadvantaged by the new taxation treatment.  
 
Who is affected? 
You will be eligible for this tax offset if you are a veteran or their beneficiary and are receiving an invalidity pension payment that: 

• Started on or after 20 September 2007, and 

• Is paid by Commonwealth Superannuation Corporation (CSC) under either     

• the Defence Force Retirement and Death Benefits (DFRDB) scheme, or 

• the Military Superannuation and Benefits scheme (MSBS). 

 
What does it do? 
You will generally pay less tax under the Douglas Decision if: 

• You are a veteran under 60 years old, or 

• You are a veteran 60 years and older who either: 

• Receives a disability superannuation benefit (DSB), or  

• Has service days prior to 1 July 1983.  

 
You will generally pay more tax under the Douglas Decision if: 

• you don’t have service days before 1 July 1983 

• your invalidity pension is not classed as a DSB. 

 
You can learn more about the Douglas Decision here or get in touch with us on 07 4766 9688.  
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If you’re unsure if this applies to you, check out the ATO’s website or give us a call on 07 4766 9688. ​