Bills Digest 127 1996-97
Superannuation Contributions Surcharge (Consequential Amendments) Bill
1997
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
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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
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