WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Superannuation Contributions Surcharge (Consequential
Amendments) Bill 1997
Date Introduced: 13 February 1997
House: House of Representatives
Portfolio: Treasury
Commencement: Royal Assent
The main amendments in the Bill relate to:
- the provision and use of currently held Tax File Numbers for
purposes of the proposed superannuation surcharge;
- allowing regulated superannuation funds to borrow, subject to
certain conditions, to meet surcharge liability;
- giving the Superannuation Complaints Tribunal power to hear
complaints in respect of some activities of superannuation
providers in respect of the surcharge; and
- providing for interest to be payable where there has been an
overpayment of the surcharge.
The reader is referred to the Digest for the Superannuation
Contributions Surcharge (Assessment and Collection) Bill 1997.
Amendment of the Income Tax Assessment Act 1936
Regulations made under the Income Tax Assessment Act
1936 (ITAA) provide for a person in receipt of an eligible
termination payment (ETP), which are subject to concessional tax
treatment, to provide the Australian Taxation Office (ATO) with
their Tax File Number (TFN). Proposed section 202DJ of the ITAA,
which will be inserted by Item 3 of Schedule
1, provides that were a person is a beneficiary of
a superannuation fund or Retirement Savings Account (RSA) and has
provided the ATO with their TFN for the purposes of an ETP, the TFN
may be used for purposes of the surcharge.
Amendments to the proposed Retirement Savings Account Act
1997
The proposed Retirement Savings Account Act 1997 establishes a
regime for superannuation accounts to be offered where there is no
trust structure and aims to allow bodies, such as banks and credit
unions, to offer superannuation products. Schedule
2 of the Bill will amend the proposed Act to allow for the
collection of TFNs that have been provided under the proposed Act.
The amendments allow for TFNs that have been collected under the
proposed Act to also be used for purposes of the surcharge without
the RSA holder being required to provide their TFN specifically for
the purpose of the surcharge (under the surcharge scheme, if a
person has not provided their TFN they will be liable to the full
15% surcharge regardless of their income, although there are
provisions for any excess surcharge amount, plus interest, to be
repaid if a TFN is subsequently provided) (Items 1 to 18 of
Schedule 2).
Schedule 2 also contains transitional provisions that provide
that if a TFN has been provided for RSA purposes prior to the
commencement of Schedule 2, it will be taken to have also been to
have been provided for surcharge requirements (Item
19).
The Superannuation Industry (Supervision) Act 1993
(SIS) contains restrictions on the circumstances where regulated
superannuation funds may borrow. The main current exemptions relate
to funds borrowing on a short term basis to meet the need to
provide benefits to a member or to meet the costs of certain
financial transactions, such as forward exchange rate or interest
rate contracts. The measures aim to allow a fund to meet certain
short term liquidity problems without having to immediately
liquidate assets at a value potentially less than their normal
market value. Item 1 of Schedule 3 of the Bill
provides that a regulated superannuation fund may also borrow if
the following conditions are satisfied:
- the borrowing is to enable a trustee to pay a surcharge
liability;
- the period of the borrowing does not exceed 90 days; and
- the total amount borrowed does not exceed 10% of the value of
the assets of the fund.
These are the same conditions that apply to borrowings for the
purpose of paying a beneficiary.
The remainder of the Schedule will amend the SIS Act to allow
TFNs collected under the Act and currently used for superannuation
purposes, such as tracing the owners of lost funds, to also be used
for purposes of the surcharge.
Amendments to the Superannuation (Resolution of Complaints)
1993
The Superannuation Complaints Tribunal (the Tribunal) was
established under this Act in 1993 and is an independent body that
aims to provide a forum to determine complaints regarding certain
decisions and conduct of trustees and life insurers. The Tribunal
first tries to settle complaints by conciliation but also has the
power to review decisions and make determinations in relation to a
complaint. Schedule 4 of the Bill aims to extend
the jurisdiction of the Tribunal to complaints relating to
decisions in regard to the surcharge.
Item 5 will insert a new section 15CA into this
Act which provides that a person may make a complaint to the
Tribunal regarding the statement given to the ATO relating to the
member and containing certain information, the most important
relating to the members contributions and whether they are deducted
or undeducted contributions which is used to determine liability
for the surcharge. Complaints must be made within the prescribed
period. Such a complaint cannot be made until all reasonable
efforts have been made to resolve the complaint with the relevant
superannuation provider (Item 11).
The parties to a complaint will be the complainant, the relevant
superannuation provider and any other party which the Tribunal has
joined to the matter (Items 7 and 10).
Proposed section 24AA will require a superannuation provider
which has been given notice of a complaint to provide documents
that the provider considers relevant to the complaint to the
Tribunal, and also will allow the Tribunal to accept summaries of
relevant documents. If a third party has been joined to the
complaint, they may also be required to provide documents to the
Tribunal. It will be an offence, with a maximum penalty of 6 months
imprisonment, to fail to comply with the proposed section
(Item 12).
However, if a complaint is made about a statement provided to
the ATO, the ATO may act on the statement, although the person
involved may request the Tribunal to make an order to prevent the
ATO from acting on the statement (Items 15 and
16).
In relation to a complaint, the Tribunal may affirm the original
decision of the superannuation provider, remit the matter to the
provider to reconsider, vary the decision or substitute a new
decision (Item 20).
If an appeal is made to the Federal Court contesting a decision
of the Tribunal, the Court will be able to prevent the ATO from
acting on the Tribunal's decision (Item 21).
Amendments to the Taxation (Interest on Overpayments and
Early Payments) Act 1983
Schedule 5of the Bill will insert a new Part
IIC into this Act that deals with interest payable in respect of
cases where the amount of surcharge is later reduced. Proposed
section 8M provides that where an assessment of surcharge is made
under the proposed Superannuation (Assessment and Collection) Act
1997, the amount of assessed surcharge has been paid and there is a
subsequent amendment of the assessment (eg. where a TFN is
provided), interest will be payable on the difference between the
actual amount of surcharge payable, if any, and the originally
assessed amount. The rate of interest payable will be that for the
13 week Treasury Note calculated monthly (proposed section 8P).
Similar provisions are contained in proposed Part IID in
relation to the proposed Termination Payments Surcharge (Assessment
and Collection) Act 1997.
Chris Field
3 April 1997
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.
ISSN 1323-9031
Commonwealth of Australia 1996
Except to the extent of the uses permitted under the
Copyright Act 1968, no part of this publication may be
reproduced or transmitted in any form or by any means, including
information storage and retrieval systems, without the prior
written consent of the Parliamentary Library, other than by Members
of the Australian Parliament in the course of their official
duties.
Published by the Department of the Parliamentary Library,
1997.
This page was prepared by the Parliamentary Library,
Commonwealth of Australia
Last updated: 10 April 1997
Back to top