PGPA Act Determination (Superannuation Clearing House Special Account 2020)

Administered by Department of Finance

Legislation au F2020L01004 In force Legislative Instrument

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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 titledReducing 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.  

Overview

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) was enacted to establish a framework for the management and accountability of the Commonwealth's financial resources. The Act aims to ensure that the government operates effectively, efficiently, and in accordance with the law. One of its key provisions is the ability to establish special accounts to hold funds for specified purposes, which is intended to provide more flexibility and control over the allocation of funds. The PGPA Act Determination (Superannuation Clearing House Special Account 2020) was introduced to establish the Superannuation Clearing House Special Account 2020, which is intended to replace the existing Superannuation Clearing House Special Account that is due to sunset on 1 October 2020. 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, allowing the Australian Taxation Office (ATO) to continue administering the Small Business Superannuation Clearing House. The determination was made under subsections 78(1) and 78(3) of the PGPA Act by the Minister for Finance and is subject to disallowance by either House of the Parliament. The establishment of the special account addresses the need to continue the Small Business Superannuation Clearing House service, which enables small business employers to make superannuation contributions through an approved clearing house, in this case, the ATO. The special account will hold funds received from employers and distribute them to the nominated superannuation funds, schemes, or retirement savings accounts on behalf of the employers. This mechanism provides a streamlined process for small businesses to meet their superannuation obligations, reducing compliance costs and administrative burdens. The special account will also cover incorrect payments attributable to employer errors and repayments of incorrectly paid amounts. By replacing the existing special account, the new determination ensures the continuity of the Small Business Superannuation Clearing House service and maintains the framework for managing superannuation contributions for small businesses.

Scope and Application

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) Determination (Superannuation Clearing House Special Account 2020) applies to the Commonwealth of Australia and is established to create a Superannuation Clearing House Special Account 2020, which will hold amounts received from small business employers for superannuation contributions on behalf of their employees. The Australian Taxation Office (ATO) administers the Small Business Superannuation Clearing House and will use the funds to make contributions to nominated superannuation funds, schemes or retirement savings accounts. This determination is made under the authority of the Minister for Finance, and it is intended to replace the existing Superannuation Clearing House Special Account (SBSCH special account) that is due to sunset on 1 October 2020. The purposes of the special account include handling incorrect payments due to employer errors and facilitating repayments of amounts erroneously paid to the ATO. The special account is an appropriation mechanism that sets aside amounts within the Consolidated Revenue Fund for spending on these specified purposes. This determination is a legislative instrument subject to disallowance by either House of the Parliament, but it does not require a Statement of Compatibility with Human Rights as it is not subject to disallowance under section 42 of the Legislation Act 2003.

Key Provisions

The Public Governance, Performance and Accountability Act 2013 PGPA Act Determination (Superannuation Clearing House Special Account 2020) primarily establishes the Superannuation Clearing House Special Account 2020 (sections 1-3). This account is intended to hold funds received from small business employers for the purpose of making superannuation contributions on behalf of their employees (section 2). The Australian Taxation Office (ATO) administers this service, distributing the funds to nominated superannuation funds, schemes, or retirement savings accounts (RSAs) as specified by employees (section 2). The account also manages incorrect payments resulting from employer errors and repayments of incorrectly paid amounts (section 2). The service was previously managed by Medicare Australia until April 2014, when it transferred to the ATO (section 3). This new account replaces the previous Superannuation Clearing House Special Account (SBSCH special account), established in 2010, which is set to sunset on 1 October 2020 (sections 3-4). The Act imposes several obligations on the parties involved. Employers must remit contributions to the ATO instead of directly to superannuation funds or schemes (Superannuation Guarantee (Administration) Act 1992, section 24). Employers must also ensure that their employees provide the necessary instructions to the ATO for the correct distribution of funds (Superannuation Guarantee (Administration) Act 1992, section 79A). The ATO, as the accountable authority, is responsible for the administration and operation of the Small Business Superannuation Clearing House, including the correct distribution of funds to the specified accounts (PGPA Act, section 78). The Commissioner of Taxation will be responsible for managing the special account upon the commencement of this determination (section 6). Failure to comply with the obligations and requirements set out in the Act may result in civil or criminal consequences. Under the Superannuation Guarantee (Administration) Act 1992, employers who fail to make the required superannuation contributions may face penalties, including fines and imprisonment (section 79). The specific penalties are detailed in the Superannuation Guarantee (Administration) Regulations 2018. Additionally, the PGPA Act provides for financial penalties for breaches of the Act or its regulations (section 101). These penalties may include fines for individuals and corporations, depending on the severity and nature of the breach. Furthermore, the Act may also provide for the recovery of any amounts improperly drawn from the special account (section 81).

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.