Bills Digest no. 47 2008–09
Superannuation (Departing Australia Superannuation Payments Tax)
Amendment Bill 2008
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
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date introduced:
25 September 2008
House: House of Representatives
Portfolio: Treasury
Commencement:
Sections 1 3 commence on
the day on which this Act receives the Royal Assent. Schedule 1
commences on a day fixed by proclamation, or 6 months after Royal
Assent, whichever occurs first.
Links:
The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
To make a number of consequential and transitional
amendments to legislation, to complement the recently introduced
Temporary Residents Superannuation Legislation Amendment Bill
2008.
The amendments in this
Bill are related to the proposed amendments to the
Superannuation (Unclaimed Money and Lost Members) Act 1999
(the S(UMLM) Act) through the recently introduced Temporary
Residents Superannuation Legislation Amendment Bill 2008 (the
Temporary Residents Bill).
The Bills Digest for the Temporary Residents
Bill should be consulted for information about the policy
background and the adoption of new measures to comply with the
objective set by the government.
The explanatory
memorandum says that this measure, along with other measures
contained in the Temporary Residents Bill, will have a positive
revenue impact to the government as follows:[1]
|
2007-08
|
2008-09
|
2009-10
|
2010-11
|
2011-12
|
|
Nil
|
$251m
|
$378m
|
$299m
|
$224m
|
Temporary residents are
currently able to claim their superannuation after permanently
departing Australia by applying for a Departing Australia
Superannuation Payment (DASP) from their superannuation fund. The
DASP is the value of their superannuation minus tax (which is
currently 30 per cent for the taxed element of a benefit and 40 per
cent for an untaxed element).
The provisions of this Bill make consequential
amendments to the Superannuation (Departing Australia
Superannuation Payments Tax) Act 2007 (the S(DASPT)
Act). Section 5 of the S(DASPT) Act sets out the rates of
tax on DASPs.Of note are the following amendments:
Item 1 amends section 3 of
the S(DASPT) Act to treat the meaning of excess untaxed
roll-over amount as the same as in the Income Tax
Assessment Act 1997.
Items 4 and 5 amend section 5
of the S(DASPT) Act to increase the tax amounts for DASPs to:
- 35 per cent tax for the element taxed in the fund of the
taxable component (currently 30 per cent), and
- 45 per cent tax for the element untaxed in the fund of the
taxable component (currently 40 per cent)
According the Explanatory Memorandum, the
rationale for this to [recover] some of the superannuation tax
concessions provided to departed temporary visa residents .[2]
Item 6 inserts a
proposed new subsection 5(2) which sets out the
tax for a new kind of payment, to be contained in
proposed section 20(H) the S(UMLM) Act.[3] The payment, called a
roll-over superannuation benefit , will be taxed at the following
rates:
- 45 per cent for the amount of the element that is not an excess
untaxed roll-over amount, and
- nil for the amount of the element that is an excess untaxed
roll-over amount.
The amendments in this Bill are essentially
minor and technical in nature, and are consequential to the
Temporary Residents Superannuation Amendment Bill 2008. The Bills
Digest for that Bill should be consulted for a fuller discussion of
the policy issues.
Kali Sanyal
17 October 2008
Bills Digest Service
Parliamentary Library
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