EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance
Public Governance, Performance and Accountability Act 2013
PGPA Act Determination (Superannuation Clearing House Special Account 2020)
Purpose of this determination
This determination is made under subsections 78(1) and 78(3) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) to establish the Superannuation Clearing House Special Account 2020 (the special account).
The purpose of this special account is to hold amounts received from small business employers to make superannuation contributions for the benefit of their employees. After receiving the amounts, the Australian Taxation Office (ATO), in administering the Small Business Superannuation Clearing House, will pay the amounts to nominated superannuation funds, superannuation schemes or retirement savings accounts (RSAs) on behalf of the employers.
Section 24 of the Superannuation Guarantee (Administration) Regulations 2018 lists the ATO as an approved clearing house for the purposes of subsection 79A(3) of the Superannuation Guarantee (Administration) Act 1992. Under the Superannuation Guarantee (Administration) Act 1992, employers are required to make contributions to superannuation funds, superannuation schemes or RSAs on behalf of employees. Instead of making contributions to superannuation funds, superannuation schemes or RSAs directly, employers can make the payments to an approved clearing house, which then distributes the payments to the superannuation fund, scheme or RSA nominated by the employee.
Through the Small Business Superannuation Clearing House, the ATO makes contributions to the RSA, superannuation fund or superannuation scheme on behalf of the employer, as the employer’s agent. The purposes of the special account also cover incorrect payments that are attributable to an error in the instructions the relevant employer has provided to the ATO as well repayments of amounts an employer has incorrectly paid to the ATO for the purposes of the Special Account.
The Small Business Superannuation Clearing House service was previously provided through Medicare Australia from 1 July 2010 until April 2014. From April 2014, the function transferred to the ATO, as detailed in the 2013-14 Mid-Year Economic and Fiscal Outlook measure titled ‘Reducing superannuation compliance costs for small business’.
There is currently a Superannuation Clearing House Special Account (SBSCH special account), established by the Financial Management and Accountability Determination 2010/05 – Superannuation Clearing House Special Account Establishment 2010, which is due to sunset on 1 October 2020 under section 50 of the Legislation Act 2003. The special account is intended to effectively replace the SBSCH special account, and allow the ATO to continue to administer the Small Business Superannuation Clearing House.
Once the special account is established, the determination that established the SBSCH special account will be revoked and an amount equivalent to the amount standing to the credit of the SBSCH special account immediately before its repeal will be credited to the special account as its opening balance.
The operating context of special accounts
A special account may be established by a determination made by the Minister for Finance (under section 78 of the PGPA Act) or by an Act (see section 80 of the PGPA Act).
A special account is an appropriation mechanism that sets aside amounts within the Consolidated Revenue Fund (CRF) for spending on specified purposes. The purposes of a special account are set out in the establishing determination or Act.
In accordance with section 81 of the Constitution, all revenues or moneys raised or received by the Commonwealth Executive Government form one CRF. Section 83 of the Constitution provides that such money may not be drawn from the Treasury except under an appropriation made by law.
- A special account enables revenues or moneys raised or received to be set aside for the purposes of that special account.
- Expenditure for the purposes of a special account is supported by an appropriation in the PGPA Act: subsection 78(4) for a special account established by a determination or subsection 80(1) for a special account established by an Act.
Special account determinations
Special account determinations are legislative instruments for the purposes of the Legislation Act 2003. Special account determinations may be varied or revoked by a subsequent determination made under subsection 78(3) of the PGPA Act.
In accordance with subsection 79(3) of the PGPA Act, the Finance Minister must table a copy of such determinations in each House of the Parliament. Subsection 79(4) of the PGPA Act provides that special account determinations are subject to disallowance by either House of the Parliament.
The disallowance period starts on the day a special account determination is tabled in the House and ends on the fifth sitting day of the House after the determination was tabled in that House.
If neither House passes a resolution to disallow a special account determination, under subsection 79(5) it commences on the day immediately after the last day on which it could have been disallowed. The Commissioner of Taxation will be the accountable authority responsible for the special account on commencement of this determination.
Human Rights
A Statement of Compatibility with Human Rights is not required for this determination. 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 Legislation Act 2003. While determinations made or varied under subsections 78(1) or 78(3) of the PGPA Act are subject to disallowance under section 79 of the PGPA Act, subsection 79(2) provides that they are not subject to disallowance under section 42 of the Legislation Act 2003. As such, a Statement of Compatibility with Human Rights is not required.
Consultation
Counsel from the Australian Government Solicitor within the Attorney-General’s Department, the Australian Taxation Office and the Department of the Treasury were consulted in the preparation of this determination.