Income Tax Regulations (Amendment) (Cth)

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Statutory Rules 1994

No. 461 1

__________________

Income Tax Regulations 2(Amendment)

I, The Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Income Tax Assessment Act 1936.

Dated 20 December 1994.

 BILL HAYDEN

 Governor-General

By His Excellency’s Command,

PAUL ELLIOTT

Parliamentary Secretary

 to the Treasurer

for the Treasurer

____________

1.   Commencement

1.1 These Regulations are taken to have commenced on

  1 July 1994.

2.   Amendment

2.1   The Income Tax Regulations are amended as set out in these Regulations.

3.   New Part 5A

3.1   After Part 5, insert:

PART 5A—REASONABLE BENEFIT LIMITS

Division 1—Preliminary

Introductory

 “46.Divisions 2 and 3 of this Part are made, under section 140ZE of the Act, for transitional purposes only.

Interpretation

“47.

(1)  In this Part, unless the contrary intention appears:

‘HAS’, in relation to a person, subject to regulation 49, means the highest average annual salary of the person over any 3 consecutive financial years (including a financial year in which the person did not earn salary for the whole of the year) before the 1994-1995 financial year;

HAS-based lump sum RBL’, in relation to a person, means the amount worked out by multiplying the amount of the person’s HAS by the amount of the person’s lump sum reasonable benefit multiple;

HAS-based pension RBL’, in relation to a person, means the amount worked out by multiplying the amount of the person’s HAS by the amount of the person’s pension reasonable benefit multiple;

‘lump sum reasonable benefit multiple’, in relation to a person who is applying for a transitional RBL, subject to subregulation (2), means :

  • (a)

    if the eligible service period in relation to the ETP, pension or annuity commenced on or after 1 July 1990—the number obtained by dividing the sum of:

    • (i)

      7 times $46,640 or, if the person’s HAS is less than $46,640, 7 times the person’s HAS ; and

    • (ii)

      5 times the part (if any) of the person’s HAS that exceeds $46,640 but does not exceed $86,610; and

    • (iii)

      3 times the part (if any) of the person’s HAS that exceeds $86,610;

 by the person’s HAS; or

  • (b)

    in any other case—the number worked out using the formula:

 

(OLD SP

xOLD RBM) +(NEW SP xNEW RBM)

 where:

 ‘OLD SP’ means the number worked out by dividing the number of days in the relevant eligible service period that occurred before 1 July 1990 by the total number of days in the relevant eligible service period; and

 ‘OLD RBM’ means the multiple applicable to the benefit under Schedule 2A; and

 ‘NEW SP’ means the number worked out by dividing the number of days in the relevant eligible service period that occurred on or after 1 July 1990 by the total number of days in the relevant eligible service period; and

 ‘NEW RBM’ means the number that would be the person’s lump sum reasonable benefit multiple if the relevant eligible service period had commenced on or after 1 July 1990;

‘net business income’, in relation to a business the gross income of which in respect of a financial year exceeds all deductions for that year with respect to the business that are allowable deductions for the purposes of the Act (other than any deductions allowable under section 82AAC or 82AAT, or Division 16C of Part III, of the Act), means the amount of that excess;

‘net business losses’, in relation to a business where all deductions for the financial year commencing on 1 July 1990 or a later financial year with respect to the business that are allowable deductions for the purposes of the Act (other than any deductions allowable under section 82AAC or 82AAT, or Division 16C of Part III, of the Act) exceed the gross income of the business in respect of that year, means the amount of that excess;

‘pension reasonable benefit multiple’, in relation to a person who is applying for a transitional RBL, subject to subregulation (2), means:

  • (a)

    if the eligible service period in relation to the benefit commenced on or after 1 July 1990—the number worked out using the formula:

¥ 15

where:

‘M’ means the sum of:

 (i) 0.75 times $46,640 or, if the person’s HAS is less than $46,640, 0.75 times the person’s HAS; and

  • (ii)

    0.55 times the part (if any) of the person’s HAS that exceeds $46,640 but does not exceed $86,610; and

  • (iii)

    0.35 times the part (if any) of the person’s HAS that exceeds $86,610; or

  • (b)

    in any other case—the number worked out using the formula:

(OLD SP

¥OLD RBM) + (NEW SP¥NEW RBM)

where:

 ‘OLD SP’ means the number worked out by dividing the number of days in the relevant eligible service period that occurred before 1 July 1990 by the total number of days in the relevant eligible service period; and

 ‘OLD RBM’ means the multiple applicable to the benefit under Schedule 2A; and

 ‘NEW SP’ means the number worked out by dividing the number of days in the relevant eligible service period that occurred on or after 1 July 1990 by the total number of days in the relevant eligible service period; and

 ‘NEW RBM’ means the number that would be the person’s pension reasonable benefit multiple if the relevant eligible service period commenced on or after 1 July 1990;

‘salary’, subject to subregulations (3) and (4), means salary, wages, commissions, bonuses, fees, allowances or gratuities paid to a person during a financial year, and includes:

  • (a)

    subject to paragraph (k), other earnings; and

  • (b)

    the amount that would be the value of a benefit to which section 57, 57A or 58 of the Fringe Benefits Tax Assessment Act 1986 applies if that benefit were not an exempt benefit; and

  • (c)

    a payment made by a company by way of remuneration to a director of the company; and

  • (d)

    in the case of a person who is an Australian citizen, or a resident of Australia—any amounts paid to the person from a source outside Australia that would fall within this definition if they had been paid from a source in Australia;

but does not include:

  • (e)

    a distribution from a trust estate; or

  • (f)

    allowances to cover expenses incurred on behalf of the person’s employer or business; or

  • (g)

    any ETP; or

  • (h)

    a superannuation pension or an annuity; or

  • (j)

    a payment to which section 26AC or 26AD of the Act applies; or

  • (k)

    earnings on investments;

‘vested superannuation benefits’ has the meaning given by subregulation (5).

“(2)

For the purposes of the definitions of ‘lump sum reasonable benefit multiple’ and ‘pension reasonable benefit multiple’, if a person has more than 1 benefit entitlement, the person’s relevant eligible service period for transitional RBL purposes is taken to have started on the earliest date of the longest eligible service period in relation to the person’s benefit entitlements.

“(3)

For the purposes of the definition of ‘salary’ in subregulation (1):

  • (a)

    amounts to which paragraph (d) of that definition applies are to be converted into Australian currency at the rate that is the average of the exchange rates for the currency in which the foreign source amounts were paid at the start, and at the end, of the financial year in which the amounts were paid; and

  • (b)

    if a person carries on a business (either alone or in partnership with another person):

    • (i)

      the person’s salary is to be increased by the person’s share of the net business income; or

    • (ii)

      the person’s salary is to be decreased by the person’s share of the net business losses; and

  • (c)

    if:

    • (i)

      a person is an associate of the person’s employer; and

    • (ii)

      the person’s salary is greater or lesser than the amount (in this paragraph called the ‘arm’s length salary’) that would, in the opinion of the Commissioner, acting in accordance with subregulation (4), be the person’s salary if the person had not been an associate of the employer;

 the person’s salary for the purposes of this Part is taken to be the arm’s length salary.

“(4)

In determining the arm’s length salary under subregulation (3), the Commissioner is to have regard to:

  • (a)

    the nature of the work performed; and

  • (b)

    the hours worked; and

  • (c)

    the salary that would be payable to a person who is not an associate of the employer for performing similar work for similar hours; and

  • (d)

    any other relevant matters.

“(5)

Subject to subregulation (6), the amount of vested superannuation benefits in relation to a person is the sum of:

Lump sum benefit in

a superannuation fund or an ADF

  • (a)

    if the person has a benefit entitlement, in the form of a lump sum, in a superannuation fund or an ADF—the greatest of the following amounts:

    • (i)

      the RBL amount (worked out under section 140ZH of the Act) of the person’s accumulated benefit on 30 June 1994;

    • (ii)

      the RBL amount (worked out under that section) of the benefit payable to the person if he or she resigned on 30 June 1994;

    • (iii)

      the RBL amount (worked out under that section) of the benefit payable to the person if he or she became redundant on that date;

Deferred annuity held by a life assurance company or registered organisation

  • (b)

    if the person has a benefit entitlement, in the form of a deferred annuity, in a life assurance company or a registered organisation—the RBL amount (calculated under section 140ZI of the Act) of the benefit payable to the person if he or she commuted the entitlement on 30 June 1994;

Lump sum benefit

payable under a contract of employment

  • (c)

    if the person has a benefit entitlement, in the form of a lump sum, payable under a contract of employment—the greater of the following amounts:

    • (i)

      the RBL amount (worked out under section 140ZJ of the Act) of the benefit payable to the person under the contract if he or she resigned on 30 June 1994;

    • (ii)

      the RBL amount (worked out under that section) of the benefit payable to the person under the contract if he or she became redundant on that date;

Pension benefit in a superannuation fund

  • (d)

    if the person has a benefit entitlement, in the form of a pension that has not become payable, in a superannuation fund—the greatest of the following amounts:

    • (i)

      the RBL amount (worked out under section 140ZK of the Act) of the amount of the person’s accumulated benefit on 30 June 1994;

    • (ii)

      the RBL amount (worked out under that section) of the capital value of the benefit payable to the person if he or she resigned on 30 June 1994;

    • (iii)

      the RBL amount (worked out under that section) of the capital value of the benefit payable to the person if he or she became redundant on that date.

“(6)

For the purposes of subregulation (5), there must be added to an amount worked out in accordance with that subregulation in relation to a person the sum of adjusted RBL amounts of previous benefits in relation to the person, where that sum is worked out:

  • (a)

    in accordance with subsection 140ZA (4) of the Act; and

  • (b)

    on the basis that, in using the formula in the subsection to work out the portion, the ‘second-last quarter’ in the formula is the quarter ending on 30 June 1994; and

  • (c)

    on the basis that subsection 140ZA (5) of the Act does not apply.

“(7)

Unless the contrary intention appears, a term defined in section 140C of the Act and not defined in this regulation has the same meaning in this Part as it has, under that section, in Division 14 of Part III of the Act.

Rules for working out ETPs for transitional RBL purposes

 “48.Where a person has a benefit entitlement that is to be taken into account for transitional RBL purposes, the following rules apply in working out the person’s transitional RBL:

  • (a)

    if the benefit is in a superannuation fund or an ADF in the form of a lump sum—the payment of the lump sum to which the person would be entitled if he or she ceased on 30 June 1994 to be a member of the superannuation fund or ADF is taken to be the retained amount of an ETP;

  • (b)

    if the benefit is in a superannuation fund in the form of a pension—the entitlement to the pension that would accrue to the person if he or she ceased on 30 June 1994 to be a member of the fund is taken to commence on 1 July 1994;

  • (c)

    if the benefit is a deferred annuity in a life assurance company or a registered organisation—the lump sum to which the person would be entitled if he or she commuted the annuity entitlement on 30 June 1994 is taken to be the retained amount of an ETP;

  • (d)

    if the benefit is a lump sum payable under a contract of employment—the lump sum to which the person would be entitled if the employment terminated on 30 June 1994 is taken to be the retained amount of an ETP that is paid after 30 June 1994.

Special rules relating to HAS

“49.

(1)For the purposes of the definition of ‘HAS’ in subregulation 47 (1), where a person has earned salary but not during 3 consecutive financial years, that definition applies to:

  • (a)

    if the person has earned salary for at least 2 full consecutive financial years—the person’s average salary for those 2 years; or

  • (b)

    if the person has earned salary for at least one full financial year but less than 2 full consecutive financial years—the person’s salary for that financial year; or

  • (c)

    in any other case—the person’s final annualised salary.

“(2)

Subject to this regulation, if the period of a person’s HAS does not include the financial year 1993-1994:

  • (a)

    the HAS is multiplied by the index number for the quarter ending on 30 June 1994; and

  • (b)

    the product of that multiplication is divided by the index number for the last quarter in the period of the person’s HAS.

“(3)

Subregulation (2) does not apply to a person in relation to a benefit if that subregulation would result in a reduction of the person’s HAS.

“(4)

Where an amount worked out under subregulation (2) is not a multiple of $10, it is to be increased to the nearest multiple of $10.

“Division 2—Specific RBLs

Introductory

“50.

This Division applies subject to Division 1.

[NOTE: In particular, provisions in this Division concerning the amount of a person’s transitional RBL must be read subject to any applicable provision of regulations 47 to 49.]

Commissioner may determine RBLs at higher amount

“51.

The Commissioner may determine that, because of special circumstances, a person’s transitional lump sum RBL or transitional pension RBL is to be an amount that is higher than it would be under another provision of this Part.

RBLs—persons aged under 45 on 1 July 1994

“52.

(1)  In this regulation, ‘eligible person’ means a person born after 1 July 1949.

“(2)

An eligible person has a transitional lump sum RBL if:

  • (a)

    the amount of the person’s vested superannuation benefits as at 30 June 1994 exceeds $400,000; and

  • (b)

    the amount of the person’s HAS-based lump sum RBL exceeds $400,000.

“(3)

Subject to regulation 53B, if a person has a transitional lump sum RBL under subregulation (2), the amount of that RBL is the lesser of:

  • (a)

    the amount of the person’s vested superannuation benefits as at 30 June 1994; and

  • (b)

    the amount of the person’s HAS-based lump sum RBL.

“(4)

An eligible person has a transitional pension RBL if:

  • (a)

    the amount of the person’s vested superannuation benefits as at 30 June 1994 exceeds $800,000; and

  • (b)

    the amount of the person’s HAS-based pension RBL exceeds $800,000.

“(5)

Subject to regulation 53B, if a person has a transitional pension RBL under subregulation (4), the amount of that RBL is the lesser of:

  • (a)

    the amount of the person’s vested superannuation benefits as at 30 June 1994; and

  • (b)

    the amount of the person’s HAS-based pension RBL.

RBLs—persons aged at least 45, but under 50, on 1 July 1994

“53.

(1) In this regulation, ‘eligible person’ means a person born:

  • (a)

    after 1 July 1944; and

  • (b)

    on or before 1 July 1949.

“(2)

An eligible person has a transitional lump sum RBL if:

  • (a)

    the amount of the person’s HAS-based lump sum RBL exceeds $400,000; and

  • (b)

    an amount exceeding $400,000 is obtained by adding:

    • (i)

      the amount of the person’s vested superannuation benefit; and

    • (ii)

      the amount calculated in accordance with the following formula:

(HAS-based lump sum RBL - vested superannuation benefit) x N1826

 where N is the number of days by which the person’s age on 1 July 1994 exceeds the person’s age on his or her 45th birthday.

[NOTE: The number ‘1826’ in the formula is the number of days in the period commencing on 1 July 1944 and ending on 30 June 1949.]

“(3)

Subject to regulation 53B, if an eligible person has a transitional lump sum RBL under subregulation (2), the amount of that RBL is the lesser of:

  • (a)

    the amount worked out, in relation to the person, under paragraph (2) (b); and

(b)

the person’s HAS-based lump sum RBL.

“(4)

An eligible person has a transitional pension RBL if:

  • (a)

    the amount of the person’s HAS-based pension RBL exceeds $800,000; and

  • (b)

    an amount exceeding $800,000 is obtained by adding:

    • (i)

      the amount of the person’s vested superannuation benefit; and

    • (ii)

      the amount calculated in accordance with the following formula:

(HAS-based pension RBL - vested superannuation benefit) x N1826

 where N is the number of days by which the person’s age on 1 July 1994 exceeds the person’s age on his or her 45th birthday.

[NOTE: The number ‘1826’ in the formula is the number of days in the period commencing on 1 July 1944 and ending on 30 June 1949.]

“(5)

Subject to regulation 53B, if an eligible person has a transitional pension RBL under subregulation (4), the amount of that RBL is the lesser of:

  • (a)

    the amount worked out, in relation to the person, under paragraph (4) (b); and

  • (b)

    the person’s HAS-based pension RBL.

RBLs—persons aged at least 50 on 1 July 1994

“53A.

(1) In this regulation, ‘eligible person’ means a person born on or before 1 July 1944.

“(2)

An eligible person has a transitional lump sum RBL if the amount of the person’s HAS-based lump sum RBL exceeds $400,000.

“(3)

Subject to regulation 53B, if an eligible person has a transitional lump sum RBL under subregulation (2), the amount of that RBL is the amount of the person’s HAS-based lump sum RBL.

“(4)

An eligible person has a transitional pension RBL if the amount of the person’s HAS-based pension RBL exceeds $800,000.

“(5)

Subject to regulation 53B, if an eligible person has a transitional pension RBL under subregulation (4), the amount of that RBL is the amount of the person’s HAS-based pension RBL.

Amount of transitional RBLs

“53B.

(1)   If:

  • (a)

    an ETP is paid to a person on a day (the ‘ETP day’) occurring before the person’s 55th birthday; or

  • (b)

    a superannuation pension or annuity that does not meet the pension and annuity standards is paid to a person with a commencement day occurring before the person’s 55th birthday;

the person’s transitional lump sum RBL worked out in accordance with subregulation 52 (3), 53 (3) or 53A (3) is discounted by 2.5% for each whole year in the period:

  • (c)

    beginning on the birthday of the recipient immediately before the ETP day or the commencement day or, if the ETP day or the commencement day falls on the birthday of the recipient, on that birthday; and

  • (d)

    ending immediately before the day that is or will be the recipient’s 55th birthday.

“(2)

The amount of transitional lump sum RBL or transitional pension RBL that applies to a person under regulation 52, 53 or 53A (reduced, where applicable, under subregulation (1)) is:

  • (a)

    in the case of the 1994-1995 year of income—the amount of transitional lump sum RBL or transitional pension RBL; or

  • (b)

    in the case of a later year of income—the amount that, under subsection 140ZD of the Act would replace the amount of transitional lump sum RBL or transitional pension RBL, on the basis that the indexable amount for the purposes of that subsection is:

    • (i)

      the amount of transitional lump sum RBL or transitional pension RBL; or

    • (ii)

      if that amount has been previously altered in accordance with this paragraph, the amount or the latest amount (as the case requires) obtained by that alteration.

“(3)

This regulation applies subject to regulations 53C and 53D.

Reasonable benefit limit where amount in ADF, life assurance company or registered organisation

“53C.

(1) Where:

  • (a)

    the Commissioner is to make a determination under section 140R or 140T of the Act in relation to a benefit paid, or commencing to be paid, to the person; and

  • (b)

    on 15 February 1990 an amount was held in relation to the person by:

    • (i)

      an ADF, other than a continuously non-complying ADF, in respect of an amount deposited with the ADF on or before that date; or

    • (ii)

      a life assurance company or a registered organisation in respect of a rolled-over amount deposited with the company or organisation on or before that date;

the amount of the person’s transitional lump sum RBL or transitional pension RBL is the greater of:

  • (c)

    the amount of the person’s transitional lump sum RBL or transitional pension RBL, worked out in accordance with subregulation 53B (2);

and:

  • (d)

    subject to subregulations (2) and (3), if the person was at least 50 years old on 15 February 1990—the sum of:

    • (i)

      the aggregate of the rolled-over amounts held in ADFs, life assurance companies or registered organisations on behalf of the person on that day; and

    • (ii)

      the amount of earnings that have accrued after that day on those amounts while held in those funds, companies or organisations or in:

      • (A)

        other ADFs, life assurance companies or registered organisations; or

      • (B)

        superannuation funds; and

    • (iii)

      the amount of earnings on the amount referred to in subparagraph (ii); or

  • (e)

    in any other case—the aggregate of the rolled-over amounts held in ADFs, life assurance companies or registered organisations on behalf of the person on that day.

 “(2)For the purposes of subparagraph (1) (d) (ii), earnings are to be taken to accrue on amounts rolled-over to a superannuation fund and used to provide defined benefits at the rate of 10% annually.

“(3)

For the purposes of applying paragraph (1) (d) to a person, where:

  • (a)

    after 15 February 1990, an amount is paid out of a superannuation fund, an ADF, life assurance company or registered organisation in respect of the person; and

  • (b)

    after that day the person rolled-over an amount to the fund, company or organisation (not being an amount that was held in another ADF, life assurance company or registered organisation on behalf of the person on that day);

the amount referred to in paragraph (a) is taken to be applied first in reduction of the amount referred to in paragraph (b), and any earnings attributable to that amount, before being applied in reduction of the amount that was held in the fund, company or organisation on that day.

Reasonable benefit limit where recipient member of certain fund on 15 August 1989

 “53D. Where:

  • (a)

    the Commissioner is to make a determination under section 140R or 140T of the Act in relation to a superannuation pension that:

    • (i)

      has commenced to be paid to a person; and

    • (ii)

      is payable under rules that meet the pension and annuity standards; and

  • (b)

    the pension is payable by a superannuation fund of which the person was a member on 15 August 1989;

the amount of the person’s transitional lump sum RBL or transitional pension RBL is the greater of:

  • (c)

    the amount of the person’s transitional lump sum RBL or transitional pension RBL, worked out in accordance with subregulation 53B (2);

and:

  • (d)

    the capital value of the pension under the governing rules of the fund as at 15 August 1989.

Division 3—Procedure

Registration of transitional RBLs

“53E.

A person who, under regulation 52, 53 or 53A is an eligible person, must register a transitional RBL with the Commissioner:

  • (a)

    not later than 31 December 1996; or

  • (b)

    if in a particular case the Commissioner allows registration at a later date—by that date.

Form of registration

 “53F.Registration under regulation 53E must be in a form approved by the Commissioner for the purpose.

Division 4—Provisions under Division 14 of Part III of the Act

Interpretation

“53G.

In this Division:

‘SIS Regulations’ means the Superannuation Industry (Supervision) Regulations as in force from time to time.

Pension valuation factor (s. 140C of the Act)

“53H.

For the purposes of the definition of ‘pension valuation factor’ in section 140C of the Act, the factor mentioned in the definition is to be ascertained in accordance with Schedule 1B of the SIS Regulations.

Pension and annuity standards (s. 140L of the Act)

“53J.

For the purposes of section 140L of the Act, a pension or an annuity is treated as meeting the pension and annuity standards mentioned in that section if it meets the standards set out:

  • (a)

    in the case of a pension—in subsection 1.06 (2) of the SIS Regulations; or

  • (b)

    in the case of an annuity—in subsection 1.05 (2) of the SIS Regulations.

Payers of benefits—specified information (s. 140M of the Act)

“53K.

For the purposes of subsection 140M (1) of the Act, the information that a payer mentioned in that section must give to the Commissioner is the information specified in Schedule 2B.

Payers of ETPs that are rolled-over—specified information (s. 140Q of the Act)

“53L.

For the purposes of subsection 140Q (1) of the Act, the information that a payer mentioned in that section must give to the Commissioner is the information specified in Schedule 2B.

Interpretation of Schedules 2A and 2B

“53M.

So far as the provisions of Division 1 of Part 5A are relevant, those provisions apply:

  • (a)

    subject to clause 1 of Schedule 2A—in relation to that Schedule; and

  • (b)

    in relation to Schedule 2B.”.

4.   New Schedules 2A and 2B

4.1   After Schedule 2, insert the following Schedules:

 SCHEDULE 2ARegulation 47

CALCULATION OF OLD RBM

Interpretation

1.  In this Schedule:

‘account balance’, in relation to a member of a superannuation fund, means amounts allocated to the member under the governing rules of the fund, and includes:

  • (a)

    amounts that have not vested in the member; and

  • (b)

    if the fund is sponsored by the employer of the member:

    • (i)

      any amount paid by the employer in accordance with a prescribed agreement or award; and

    • (ii)

      the amount of the net earnings of the fund in respect of an amount referred to in subparagraph (i);

‘concessional component’ has the meaning given by section 27A of the Act;

‘converted pension multiple’, in relation to a superannuation pension that could become payable under the governing rules of the fund as at:

  • (a)

    25 May 1988; or

  • (b)

    the day when the fund was constituted (if the fund was constituted after 25 May 1988 but before 1 July 1990);

means the number worked out by multiplying the multiple applicable to the pension under the governing rules of the superannuation fund concerned by the pension valuation factor applicable to the pension as at the retirement age applicable to the fund;

‘defined benefit’ means a benefit defined in terms of, or in terms that include, either or both of the following amounts:

  • (a)

    the amount of the relevant person’s salary:

    • (i)

      at the date of the person’s retirement from the workforce; or

    • (ii)

      on a day before that date; or

    • (iii)

      averaged over a period of employment before retirement;

  • (b)

    a specified amount;

SCHEDULE 2A—continued

‘lump sum fund’ means a superannuation fund that is prohibited under its rules from:

  • (a)

    providing pensions; and

  • (b)

    rolling-over amounts to purchase annuities on behalf of members;

‘maximum fund multiple’, in relation to a person who is a member of a defined benefit superannuation fund, means the multiple that is the greatest of the following:

  • (a)

    the greatest lump sum multiple; or

  • (b)

    the greatest converted pension multiple; or

  • (c)

    the greatest combination of a lump sum multiple and a converted pension multiple;

that could have been applicable to the person at any time up to the retirement age of the fund under the governing rules of the fund as at:

  • (d)

    25 May 1988; or

  • (e)

    the day when the fund was constituted (if the fund was constituted after 25 May 1988 but before 1 July 1990);

‘member’, in relation to a superannuation fund, includes a person who has deferred any of his or her benefits in the fund;

‘private sector fund’ means a superannuation fund:

  • (a)

    to which section 23F of the Act would have applied on:

    • (i)

      25 May 1988; or

    • (ii)

      the day when the fund was constituted (if the fund was constituted after 25 May 1988 but before 1 July 1990);

 if that section had not been repealed; and

  • (b)

    that the Commissioner or the Insurance and Superannuation Commission had approved in writing to provide benefits for a person in excess of the reasonable benefit limits that were current as at 25 May 1988;

SCHEDULE 2A—continued

‘public sector fund’ means a superannuation fund established:

  • (a)

    by a law of the Commonwealth or of a State or Territory; or

  • (b)

    under the authority of:

    • (i)

      the Commonwealth or the government of a State or Territory; or

    • (ii)

      a municipal corporation, another local governing body or a public authority constituted by or under a law of the Commonwealth or of a State or Territory;

‘retirement age’, in relation to a person to whom a benefit is, or commences to be, paid means:

  • (a)

    in the case of a defined benefit:

    • (i)

      if the governing rules of the superannuation fund as at:

      • (A)

        25 May 1988; or

      • (B)

        the day when the fund was constituted (if the fund was constituted after 25 May 1988 but before 1 July 1990);

     specified a maximum retirement age—that age; or

    • (ii)

      where that defined benefit is based on a period of service:

      • (A)

        if the fund is not a lump sum fund—the age of the member at which the highest value is obtained by multiplying the pension multiple applicable to him or her under those rules on the relevant date under subparagraph (i) by the relevant pension valuation factor; or

      • (B)

        if the fund is a lump sum fund—the age of the member at which the greatest lump sum multiple is so applicable; or

      • (C)

        if the fund is not a lump sum fund but does not provide pension benefits—the age of the member at which the greatest lump sum multiple is so applicable; and

SCHEDULE 2A—continued

  • (b)

    in the case of a benefit that is not a defined benefit:

    • (i)

      if the governing rules of the superannuation fund as at:

      • (A)

        25 May 1988; or

      • (B)

        the day when the fund was constituted (if the fund was constituted after 25 May 1988 but before 1 July 1990);

     specified a maximum retiring age—that age; or

    • (ii)

      65 years;

‘salary’, in relation to a member of a superannuation fund, means any amount that is treated as salary of the member under the rules of the fund;

‘undeducted contributions’ has the meaning given by section 27A of the Act.

[NOTE: For the interpretation of this Schedule, see also regulation 53M.]

Base old RBM

2.Subject to the following provisions of this Schedule, the old RBM applicable to a person in relation to a benefit entitlement for transitional RBL purposes is:

  • (a)

    if the benefit is to be assessed against the lump sum RBL—7; or

  • (b)

    if the benefit is to be assessed against the pension RBL—11.25.

When greater old RBM applicable

3.(1)An old RBM greater than the old RBM specified in clause 2 may be applicable to a person in relation to a benefit entitlement in a public sector fund or a private sector fund if the person was a member of the fund on 30 June 1990.

(2)

An old RBM greater than the old RBM specified in clause 2 may also be applicable to a person in relation to a benefit entitlement if:

SCHEDULE 2A—continued

  • (a)

    the benefit:

    • (i)

      is payable by an ADF, a life assurance company, a registered organisation or a superannuation fund; and

    • (ii)

      consists, in whole or in part, of an ETP rolled-over from a public sector superannuation fund or a private sector fund (in this clause called the ‘original fund’); and

  • (b)

    the whole of the ETP, other than any part that consisted of undeducted contributions or concessional components, from the original fund was rolled-over; and

  • (c)

    the person was a member of the original fund on 30 June 1990 or ceased to be such a member after 15 February 1990 and before 1 July 1990.

Old RBM—defined benefits

4.The old RBM applicable to a person in relation to:

  • (a)

    a defined benefit entitlement in a defined benefit superannuation fund to which subclause 3 (1) applies; or

  • (b)

    a benefit entitlement in an ADF, a life assurance company, a registered organisation or a superannuation fund to which subclause 3 (2) applies where the benefit paid by the original fund referred to in that subclause was a defined benefit;

is the greater of:

  • (c)

    the person’s maximum fund multiple:

    • (i)

      as at 30 June 1990; or

    • (ii)

      if a higher maximum fund multiple was applicable to the person as at an earlier date—as at the earlier date; or

  • (d)

    the base old RBM.

Old RBM—non-defined benefits

5. (1)The old RBM applicable to a person in relation to a benefit entitlement in:

  • (a)

    a fund of a kind referred to in subclause 3 (1) that does not provide defined benefits; or

SCHEDULE 2A—continued

  • (b)

    an ADF, a life assurance company, a registered organisation or a superannuation fund to which subclause 3(2) applies where the original fund referred to in that subclause only provided benefits that are not defined benefits;

is the greater of:

  • (c)

    the multiple calculated under clause 6 or clause 7; or

  • (d)

    the base old RBM.

(2)

For the purposes of subclause (1), a fund:

  • (a)

    may calculate the old RBM for all of its members under either clause 6 or clause 7; and

  • (b)

    must make the calculation under one of those clauses.

Calculation method 1—non-defined benefits

6. (1) Subject to subclause (2), the calculation by method 1 is to be made in relation to a person using the formula:

1.08 x[P x 1.0185 x] +(1.08 x Q x 1.0185n);

 where:

 ‘P’ means:

  • (a)

    in the case of a person who is a member of the fund as a result of having deferred any of his or her benefits in that fund—0; or

  • (b)

    in any other case—the total proportion of the person’s salary (expressed as a decimal number) that was:

    • (i)

      contributed to the fund during the financial year ending on 30 June 1990 (including any employer contributions); or

    • (ii)

      the highest proportion contributed to the fund during any earlier financial year (including any employer contributions);

 whichever is the higher, and includes any amount paid by the employer in accordance with a prescribed agreement or award; and

SCHEDULE 2A—continued

‘Q’ means the number worked out:

  • (a)

    if that person:

    • (i)

      was a member of the fund on 1 July 1990; and

    • (ii)

      had deferred any of his or her benefits in the fund before 1 July 1990;

  • by 

     dividing the person’s account balance on 1 July 1990 by an amount obtained by:

    • (iii)

      multiplying the person’s salary on the date of deferral by the index number for the June quarter of the financial year that began on 1 July 1989; and

    • (iv)

      dividing the product of that multiplication by the index number for the March quarter of the financial year in which the benefits were deferred; or

  • (b)

    if the person ceased to be a member of the fund before 1 July 1990—by dividing the person’s account balance on the day when his or her membership ceased by his or her salary on the day when he or she ceased to be a member; or

  • (c)

    in any other case—by dividing the person’s account balance on 1 July 1990 by his or her salary on that day; and

‘n’ means the number of years in the period:

  • (a)

    beginning:

    • (i)

      if the person ceased to be a member of a superannuation fund before 1 July 1990—on the day when that person ceased to be a member of the fund; or

    • (ii)

      in any other case—on 30 June 1990; and

  • (b)

    ending at the end of the day when the person reaches the age that is his or her retirement age for the purposes of the fund;

 counting part of a year as a whole year.

SCHEDULE 2A—continued

(2)

If the governing rules of a superannuation fund of which a person is a member require the contributions to the fund in respect of the person to increase after 30 June 1990, the calculation is to be made in relation to that person by:

  • (a)

    adding together the amounts worked out, in accordance with subclause (3), in relation to the person separately in respect of each year from 1 July 1990 to the day on which he or she reaches the age that is his or her retirement age, counting part of a year as a whole year: and

  • (b)

    adding to the amounts referred to in paragraph (a) the amount specified in subclause (4).

(3)

The amount referred to in paragraph (2) (a) to be worked out in relation to a person in respect of a year (in this subclause called ‘relevant year’) is the amount worked out using the formula:

1.08 x P x 1.0185n + (1-i)

 where:

‘P’ means the proportion (expressed as a decimal  number) of the amount of the salary of the person,  being an amount that is assumed to increase by 8%  on each 1 July after 1 July 1990, that would be  required to be contributed to the fund under the rules  in respect of the relevant year; and

‘i’ means the lower of:

  • (a)

    the number of years in the period that:

    • (i)

      began on 1 July 1990; and

    • (ii)

      ended at the end of the relevant year; or

  • (b)

    n (as defined in subclause (1).

SCHEDULE 2A—continued

(4)

The amount referred to in paragraph (2) (b) is an amount worked out using the formula:

1.08 x Q x 1.0185n

where ‘Q’ and ‘n’ have the respective meanings given by subclause (1).

Calculation method 2—non-defined benefits

 7.The calculation by method 2 is to be made in relation to a person using the formula:

(Q x Asset Factor)

+(P x Contribution Factor x 100)

 where:

‘Q’ has the meaning given by subclause 6 (1); and

‘Asset Factor’ means the relevant factor ascertained using the table to this clause; and

‘P’ has the meaning given by clause 6; and

‘Contribution factor’ means the relevant factor ascertained using the following Table:

TABLE

FACTORS FOR CALCULATING HIGHER MULTIPLE

Years to retirement

Asset Factor

Contribution Factor

50

2.703

0.893

49

2.654

0.866

48

2.606

0.839

47

2.558

0.813

46

2.512

0.788

45

2.466

0.762

44

2.421

0.738

43

2.377

0.714

42

2.334

0.690

41

2.292

0.666

SCHEDULE 2A—continued

Years to retirement

Asset Factor

Contribution Factor

40

2.250

0.643

39

2.209

0.621

38

2.169

0.599

37

2.129

0.577

36

2.091

0.556

35

2.053

0.535

34

2.015

0.514

33

1.979

0.494

32

1.943

0.475

31

1.907

0.455

30

1.873

0.436

29

1.839

0.417

28

1.805

0.399

27

1.772

0.381

26

1.740

0.363

25

1.709

0.346

24

1.678

0.329

23

1.647

0.312

22

1.617

0.295

21

1.588

0.279

20

1.559

0.263

19

1.531

0.248

18

1.503

0.232

17

1.475

0.217

16

1.449

0.203

15

1.422

0.188

14

1.396

0.174

13

1.371

0.160

12

1.346

0.146

11

1.322

0.133

10

1.298

0.120

9

1.274

0.107

8

1.251

0.094

7

1.228

0.081

6

1.206

0.069

5

1.184

0.057

4

1.162

0.045

3

1.141

0.034

2

1.120

0.022

1

1.100

0.011

SCHEDULE 2A—continued

[Notes: 1. The years to retirement of a person is the number of years from 30  June 1990 until the day on which the person will reach the  retirement age of the fund.

 2. Where the number of years to retirement of the person includes a  part of a year, the factor to be obtained using the table is the factor  applicable to the next higher year.]

Mixed benefits

8.If a defined benefit superannuation fund could have provided a combination of defined benefits and other benefits to a person under the governing rules of the fund, as at:

  • (a)

    25 May 1988; or

  • (b)

    the day when the fund was constituted (if the fund was constituted after 25 May 1988 but before 1 July 1990);

the old RBM applicable to a person to whom a benefit is paid, or commences to be paid, by the fund is the greater of:

  • (c)

    the sum of:

    • (i)

      the person’s maximum fund multiple; and

    • (ii)

      the multiple that would be calculated under clause 6 or 7; or

  • (d)

    the greater of the numbers calculated under clauses 4 and 5.

Adjustment of old RBM for early retirement

9.

If the age at which the person may retire under the rules of the fund is less than 55, the old RBM of the person is the number worked out using the formula:

 A

1 - (0.025 x B)

 where:

‘A’ is the number that would have been the old RBM of the person under this Schedule if this clause did not apply; and

SCHEDULE 2A—continued

‘B’ is the number of whole years between the age at which the person may retire under the rules of the fund and 55 years.

Conversion to multiple of HAS

10.If a fund specifies benefits payable to a member in terms of the member’s final salary or in similar terms, the multiple of salary is, for the purposes of this Schedule, to be converted into a multiple of the person’s HAS using the formula:

M x 1.08 (1.5 - K)

 where:

‘K’ is the number of years used under the governing rules of the fund from the midpoint of the averaging period for calculating the multiple of salary until the end of that period; and

‘M’ is the multiple of salary used under those rules.

______________

 SCHEDULE 2B Regulations 53K, 53L

 and 53M

INFORMATION TO BE GIVEN TO THE COMMISSIONER

Interpretation

1.

For the purposes of this Schedule, a pension is an allocated pension if:

  • (a)

    the rate of payment of the pension; or

  • (b)

    the basis for variations in the rate of payment of the pension;

is not fully defined in the relevant trust deed.

[NOTES: 1. This definition is based on the definition of “allocated pension” in s. 9 of the Social Security Act 1991; 2. For the interpretation of this Schedule, see also regulation   53M.]

Specified information

2.

For the purposes of regulations  53K, 53L and 53M, the following information is specified:

A.Recipient information:

Name of person who received the benefit

Address of that person

Tax file number of that person (if known)

Date of birth of that person (if known)

Where the benefit was paid by an employer of the person—

 whether the person is an associate of the employer

 

B.Payer information:

Name of Payer

Address of Payer

Tax file number of payer

SCHEDULE 2B—continued

Where the payer is a superannuation fund, an approved deposit fund,  a life assurance company, a registered organisation or an  employer of the recipient—specify which applies

C.Benefit information (ETPs; superannuation pensions (other than allocated pensions); annuities and allocated pensions):

So much of the following information as the Commissioner, by notice in writing, requests:

1.

In the case of ETPs:

Date on which the ETP was made

Details of the eligible service period to which the ETP relates

Amount of the ETP

Components of the ETP as specified in subsection 27AA of the Act

If the ETP is a result of the commutation or residual capital value of an earlier pension or annuity:

 the commencement day of the earlier benefit; and

 whether the earlier benefit was a pension or annuity

If the ETP was rolled-over, the date and amount of the roll-over

Whether the ETP is a death benefit within the meaning of section  27AAA of the Act

2.

In the case of superannuation pensions (other than allocated pensions):

Commencement day of the pension

Details of the eligible service period to which the pension relates

Annual value of the pension

Term of the pension

Undeducted purchase price

Whether the pension is a disability superannuation pension

Amount of residual capital value, if any

Where the payer is a superannuation fund - whether the person was a member of that fund as at 15 August 1989

Level of reversion, if any, that applies to the pension

Rate of indexation, if any, that applies to the pension

Whether the pension is a rebatable superannuation pension

Whether the pension meets the pension and annuity standards

SCHEDULE 2B—continued

3.

In the case of annuities and allocated pensions:

Commencement day of the annuity or allocated pension

Amount of ETP rolled-over to buy or establish the annuity or  allocated pension

Components of the ETP as specified in subsection 27AA of the Act rolled-over to buy or establish the annuity or allocated pension

Details of the eligible service period to which the annuity or  allocated pension relates

Whether the annuity or allocated pension meets the pension and  annuity standards

4.

In any case:

Any further information that the Commissioner, by notice in writing, reasonably requests for the purposes of subsection 140M (1) or 140Q (1) of the Act

____________________________________________________________

NOTES

1. Notified in the Commonwealth of Australia Gazette on 30 December 1994.

2. Statutory Rules 1936 No. 94 as amended by 1939 Nos. 6 and 42; 1940 Nos. 138 and 289; 1941 Nos. 120 and 327; 1942 Nos. 339 and 553; 1943 Nos. 80, 127 and 151; 1944 Nos. 90 and 124; 1945 Nos. 12, 85, 169 and 192; 1946 No. 135; 1947 Nos. 77 and 173; 1948 Nos. 115 and 162; 1949 Nos. 25 and 50; 1950 Nos. 63 and 101; 1951 Nos. 136 and 157; 1952 Nos. 89, 90 and 102; 1953 Nos. 55 and 88; 1954 Nos. 11, 99 and 112; 1955 No. 23; 1956 Nos. 34, 35 and 96; 1957 Nos. 39 and 74; 1958 Nos. 27 and 70; 1959 Nos. 25 and 81; 1960 Nos. 44 and 74; 1962 Nos. 15, 44 and 112; 1963 Nos. 53 and 92; 1964 Nos. 74, 121 and 134; 1965 Nos. 133 and 187; 1966 No. 156; 1967 Nos. 112 and 126; 1968 No. 1; 1969 No. 68; 1970 Nos. 43, 126, 168 and 213; 1971 Nos. 120 and 148; 1972 Nos. 48, 50 and 137; 1973 No. 266; 1974 Nos. 193, 226 and 267; 1975 Nos. 88, 89, 99, 101 and 213; 1976 Nos. 115, 188 and 212; 1977 Nos. 77, 107 and 248; 1978 Nos. 85 and 193; 1979 Nos. 126 and 239; 1980 Nos. 86, 137 and 149; 1981 Nos. 116 and 360; 1982 Nos. 115, 128, 267 and 280; 1983 Nos. 79, 87, 111, 213 and 319; 1984 Nos. 172, 286, 408, and 416; 1985 Nos. 21, 148, 274 and 278; 1986 No. 325 and Acts Nos. 28, 49 and 112, 1986; Statutory Rules 1987 Nos. 92 and 120; 1988 Nos. 196, 208, 262, 381, 382, 383 and 384 and Act No. 97, 1988; Statutory Rules 1989 Nos. 67, 80, 115, 123, 124, 141, 250 and 358; 1990 Nos. 19, 126, 151, 152, 192, 347, 390, 398 and 468; 1991 Nos. 20, 121, 156, 158, 240, 300, 301,

NOTES—continued

 390 and 391; 1992 Nos. 38, 129, 216, 313 and 449; 1993 Nos. 15, 46, 47, 65, 91, 159, 202, 216, 275, 288 and 370; 1994 Nos. 95, 96, 127, 174, 195, 219, 399, 412 and 460.

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