EXPLANATORY STATEMENT
Parliamentary Contributory Superannuation Act 1948
Parliamentary Superannuation Age Factors (Surcharge)Determination 2015 (No. 1)
Authority for the Determination
The Parliamentary Contributory Superannuation Scheme (PCSS) provides superannuation benefits for parliamentarians who entered Parliament before 9 October 2004. The PCSS is established by the Parliamentary Contributory Superannuation Act 1948 (PCS Act).
The Parliamentary Superannuation Age Factors (Surcharge) Determination 2015 (No. 1) (the Determination) is made under subsection 22A(1) of the PCS Act. The Determination also revokes a previous Determination made under that subsection. This revocation is authorised by subsection 33(3) of the Acts Interpretation Act 1901 which provides, among other things, that where an Act confers power to make an instrument the power shall, unless the contrary intention appears, be construed as including a power, exercisable in like manner, to revoke the instrument. No such contrary intention appears in the PCS Act.
Purpose of the Determination
The superannuation contributions surcharge (surcharge) is an additional tax on certain contributions made to a superannuation fund after 20 August 1996 and before 1 July 2005. The PCS Act gives retiring parliamentarians the option of having a lump sum amount taken from their PCSS entitlements to pay their surcharge liability, resulting in a reduction in the parliamentarian’s PCSS pension. The reduction is calculated using age factors determined by the Parliamentary Retiring Allowances Trust. The most current factors are contained in the Determination.
Legislative Instruments Act 2003
The Determination is a legislative instrument for the purposes of section 5 of the Legislative Instruments Act 2003 (LIA). However, as the Determination is an instrument relating to superannuation, it is exempted from disallowance by item 39 of the table in subsection 44(2) of the LIA.
Consultation
Consistent with paragraph 18(2)(a) of the LIA, consultation was considered unnecessary as the Regulation is of a minor or machinery nature and does not substantially alter existing arrangements. Actuarial advice was obtained regarding the factors included in the Determination. This advice was obtained from the Australian Government Actuary, consistent with the requirements of subsection 22A(1) of the PCS Act.
Statement of Compatibility with Human Rights
Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires a Statement of Compatibility with Human Rights for all legislative instruments subject to disallowance under section 42 of the LIA. As mentioned above, the Determination is exempt from disallowance which means that a Statement of Compatibility with Human Rights is not required.
Commencement
The Determination commences on the day after it is registered on the Federal Register of Legislative Instruments.
Overview
The Parliamentary Superannuation Age Factors (Surcharge) Determination 2015 (No. 1) was introduced to address the need for updated age factors used in the calculation of superannuation contributions surcharge for retiring parliamentarians under the Parliamentary Contributory Superannuation Scheme. This Determination is made under subsection 22A(1) of the Parliamentary Contributory Superannuation Act 1948, which provides for the creation of such instruments to establish the necessary factors for calculating the surcharge. The determination revokes a previous Determination, authorised by subsection 33(3) of the Acts Interpretation Act 1901, which allows for the revocation of instruments unless otherwise specified. The purpose of this Determination is to ensure that the factors used for calculating the surcharge are up to date and actuarially sound, as advised by the Australian Government Actuary. This Determination was not subject to disallowance, and therefore, a Statement of Compatibility with Human Rights was not required. The Determination came into effect on the day after it was registered on the Federal Register of Legislative Instruments.
Scope and Application
The Parliamentary Superannuation Age Factors (Surcharge) Determination 2015 (No. 1) applies to the Parliamentary Contributory Superannuation Scheme (PCSS), which provides superannuation benefits for parliamentarians who entered Parliament before 9 October 2004. The determination is made under subsection 22A(1) of the Parliamentary Contributory Superannuation Act 1948 (PCS Act), which authorises the establishment of age factors for calculating reductions in pension entitlements for retiring parliamentarians who choose to pay their superannuation contributions surcharge through a reduction in their PCSS pension. The determination revokes a previous determination made under the same subsection and is not subject to disallowance under the Legislative Instruments Act 2003 due to its superannuation-related nature. The determination applies to the Commonwealth jurisdiction and its scope is limited to the calculation of age factors for the PCSS. The determination does not apply to any other superannuation schemes or retirement benefits. The surcharge to which the determination relates is an additional tax on certain contributions made to a superannuation fund between 20 August 1996 and 1 July 2005.
Key Provisions
The Parliamentary Superannuation Age Factors (Surcharge) Determination 2015 (No. 1) is an instrument made under the Parliamentary Contributory Superannuation Act 1948 (PCS Act). Specifically, it is authorised by subsection 22A(1) of the PCS Act, which allows for the setting of age factors for calculating the reduction in PCSS pensions when a surcharge liability is paid. These age factors are used to determine the reduction in pension entitlements for retiring parliamentarians who opt to use a lump sum from their PCSS entitlements to pay the superannuation contributions surcharge (sections 2 and 3). The surcharge is an additional tax on certain superannuation contributions made between 20 August 1996 and 1 July 2005.
The PCS Act imposes obligations on retiring parliamentarians who have the option to use their PCSS entitlements to pay the surcharge. These obligations include the requirement to be aware of the applicable age factors, which are detailed in the Determination (section 2). The Parliamentary Retiring Allowances Trust, which administers the PCSS, must also use the age factors in the Determination when calculating the reduction in pension entitlements for those parliamentarians who choose to pay the surcharge from their PCSS entitlements (section 3). The Determination also revokes a previous Determination made under subsection 22A(1) of the PCS Act, as authorised by subsection 33(3) of the Acts Interpretation Act 1901 (section 4).
There are no direct offences, penalties, or civil or criminal consequences specified within the Determination itself. However, the surcharge itself is a tax liability, and failure to pay this tax could result in penalties under the taxation laws, including interest on the unpaid tax and potential prosecution in the case of wilful default. The Determination operates within the legislative framework and ensures that the appropriate age factors are applied to calculate pension reductions for parliamentarians paying the surcharge from their PCSS entitlements.