Can my super fund record my tax file number, and what are they allowed to do with it?

In Plain English

Yes, your super fund can record your tax file number (TFN). According to the law, if you provide your TFN to your super fund, they are required to keep a record of it. They can use your TFN to:

• Accept various types of contributions to your super account.
• Ensure you're taxed correctly on contributions and when you start receiving benefits.
• Help locate any other super accounts you might have so you can consolidate them.
• Inform another superannuation provider of your TFN when your benefits are being transferred, unless you request them not to.
• Validate information about you with the Commissioner of Taxation.
• Locate amounts held for your benefit or consolidate your super accounts.

Your super fund must keep your TFN secure and is generally not allowed to use it as their own way to identify you (like an account number). They also have to destroy the record of your TFN after you cease to be a beneficiary, unless it's needed for another purpose.

Detailed Explanation

The Superannuation Industry (Supervision) Act 1993 and associated legislative instruments outline the rules for how superannuation entities handle Tax File Numbers (TFNs).

Recording your TFN:

• If you, as a beneficiary or applicant to become a beneficiary, quote your TFN to a trustee of an eligible superannuation entity or regulated exempt public sector superannuation scheme, the trustee is generally required to record it as soon as reasonably practicable after the quotation, according to sections 299J(2), 299K(2) and 299L(2) of the Superannuation Industry (Supervision) Act 1993.
• The Superannuation Industry (Supervision) Act 1993 requires the trustee to retain the record of your TFN until you cease to be a beneficiary (or applicant) and to destroy it as soon as reasonably practicable after that time (sections 299J(3), 299K(3) and 299L(3)). Failure to comply with these requirements can result in penalties (sections 299J(6), 299J(7), 299K(6), 299K(7), 299L(6) and 299L(7)).

Permitted uses of your TFN:

• The Superannuation Industry (Supervision) Tax File Number approval No. 1 of 2017 and the Retirement Savings Accounts Tax File Number approval No. 1 of 2017 outline the approved manner for superannuation providers to request and use your TFN.
• Your TFN can be used to accept permitted types of contributions, ensure correct taxation, and facilitate the location of other super accounts (Superannuation Industry (Supervision) Tax File Number approval No. 1 of 2017 and Retirement Savings Accounts Tax File Number approval No. 1 of 2017).
• Trustees can use your TFN to inform another superannuation provider when transferring your benefits, unless you provide a written request to the trustee not to disclose it (Superannuation Industry (Supervision) Act 1993 section 299M(2) and (3)).
• The trustee may use the TFN to validate information about you with the Commissioner of Taxation under section 299TD of the Superannuation Industry (Supervision) Act 1993 and section 143D of the Retirement Savings Accounts Act 1997.
• Trustees can use the TFN to locate amounts held for your benefit or to facilitate the consolidation of your superannuation accounts, as per section 299LA of the Superannuation Industry (Supervision) Act 1993 and section 137A of the Retirement Savings Accounts Act 1997.

Restrictions and Obligations:

• The Superannuation Industry (Supervision) Act 1993 and the Retirement Savings Accounts Act 1997 do not permit a trustee or RSA provider to adopt your TFN as their own identifier for you (e.g., as an account number). This is reinforced by Australian Privacy Principle 9.
• The Privacy (Tax File Number) Rule 2015 regulates the collection, storage, use, disclosure, security, and disposal of individuals’ TFN information. Superannuation and RSA providers are legally bound by this rule.
• The Superannuation Contributions Tax (Assessment and Collection) Regulations 2019 also address the use of TFNs in the context of superannuation contributions and reporting obligations.
• The Superannuation (Government Co-contribution for Low Income Earners) Regulations 2022 outlines how TFNs are used in relation to government co-contributions.

It's important to note that while you are not legally obligated to provide your TFN, not doing so may have financial consequences, such as the inability to accept certain types of contributions or potentially paying more tax (Superannuation Industry (Supervision) Tax File Number approval No. 1 of 2017 and Retirement Savings Accounts Tax File Number approval No. 1 of 2017).