Superannuation Budget Measures Act 2004

Administered by Department of Finance

Legislation au C2004A01341 In force Act

Legislation content

 

 

 

 

 

 

Superannuation Budget Measures Act 2004

 

No. 106, 2004

 

 

 

 

 

An Act to amend laws relating to superannuation, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Extension of the Government’s superannuation co‑contribution

Superannuation (Government Co‑contribution for Low Income Earners) Act 2003

Schedule 2—Superannuation surcharge

Part 1—Amendments related to reduction of the surcharge rate

Superannuation Contributions Tax Imposition Act 1997

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997

Termination Payments Tax Imposition Act 1997

Part 2—Amendments related to reduction of the surcharge cap

Defence Force Retirement and Death Benefits Act 1973

Parliamentary Contributory Superannuation Act 1948

Superannuation Act 1976

Superannuation Contributions Tax (Application to the Commonwealth—Reduction of Benefits) Act 1997

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997

Part 3—Application

 

 

Superannuation Budget Measures Act 2004

No. 106, 2004

 

 

 

An Act to amend laws relating to superannuation, and for related purposes

[Assented to 30 June 2004]

The Parliament of Australia enacts:

1  Short title

  This Act may be cited as the Superannuation Budget Measures Act 2004.

2  Commencement

  This Act commences on the day on which it receives the Royal Assent.

3  Schedule(s)

  Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.


Schedule 1—Extension of the Government’s superannuation co‑contribution

 

Superannuation (Government Co‑contribution for Low Income Earners) Act 2003

1  Subsection 9(1)

Repeal the subsection, substitute:

 (1) The amount of the Government co‑contribution in respect of a person for an income year is:

 (a) for the 2003‑04 income year—an amount equal to the sum of the eligible personal superannuation contributions the person makes during the income year; and

 (b) for the 2004‑05 income year or a later income year—an amount equal to 150% of the sum of the eligible personal superannuation contributions the person makes during the income year.

2  Subsection 10(1)

Omit “an income year”, substitute “the 2003‑04 income year”.

3  After subsection 10(1)

Insert:

 (1A) The amount of the Government co‑contribution in respect of a person for the 2004‑05 income year or a later income year must not exceed the maximum amount worked out using the following table:

 

Maximum Government co‑contribution

Item

Person’s total income for the income year

Maximum amount

1

the lower income threshold or less

$1,500

2

more than the lower income threshold but less than the higher income threshold

$1,500 reduced by 5 cents for each dollar by which the person’s total income for the income year exceeds the lower income threshold

4  Subsection 10(2)

Omit “Subsection (1)”, substitute “Subsections (1) and (1A)”.

5  Subsections 10A(2) and (3)

Repeal the subsections, substitute:

 (2) The lower income threshold for an income year is:

 (a) for the 2003‑04 income year—$27,500; or

 (b) for the 2004‑05 income year or a later income year before the 2007‑08 income year—$28,000; or

 (c) for the 2007‑08 income year—$28,000 multiplied by the indexation factor for that income year; or

 (d) for a later income year—the amount of the lower income threshold for the previous income year multiplied by the indexation factor for that later income year.

 (3) The higher income threshold for an income year is:

 (a) for the 2003‑04 income year—$40,000; or

 (b) for the 2004‑05 income year or a later income year before the 2007‑08 income year—$58,000; or

 (c) for the 2007‑08 income year or a later income year—the sum of:

 (i) the lower income threshold for that income year; and

 (ii) $30,000.

6  Application of amendments

The amendments made by this Schedule apply to the 2004‑05 income year and later income years.


Schedule 2—Superannuation surcharge

Part 1—Amendments related to reduction of the surcharge rate

Superannuation Contributions Tax Imposition Act 1997

1  Subsection 5(1AA) (definition of maximum surcharge percentage)

Repeal the definition, substitute:

maximum surcharge percentage means:

 (a) for the 2003‑2004 financial year—14.5%; and

 (b) for the 2004‑2005 financial year—12.5%; and

 (c) for the 2005‑2006 financial year and later financial years—10%.

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997

2  Subsection 5(1A) (definition of maximum surcharge percentage)

Repeal the definition, substitute:

maximum surcharge percentage means:

 (a) for the 2003‑2004 financial year—14.5%; and

 (b) for the 2004‑2005 financial year—12.5%; and

 (c) for the 2005‑2006 financial year and later financial years—10%.

Termination Payments Tax Imposition Act 1997

3  Subsection 5(1AA) (definition of maximum surcharge percentage)

Repeal the definition, substitute:

maximum surcharge percentage means:

 (a) for the 2003‑2004 financial year—14.5%; and

 (b) for the 2004‑2005 financial year—12.5%; and

 (c) for the 2005‑2006 financial year and later financial years—10%.


Part 2—Amendments related to reduction of the surcharge cap

Defence Force Retirement and Death Benefits Act 1973

4  Paragraphs 6C(3)(c) and (d)

Repeal the paragraphs, substitute:

 (c) 12.5% of the employer‑financed component of any part of the benefits payable to the member that accrued in the 2004‑2005 financial year;

 (d) 10% of the employer-financed component of any part of the benefits payable to the member that accrued after 30 June 2005.

Parliamentary Contributory Superannuation Act 1948

5  Paragraphs 4E(3)(c) and (d)

Repeal the paragraphs, substitute:

 (c) 12.5% of the employer‑financed component of any part of the benefits payable to the person that accrued in the 2004‑2005 financial year;

 (d) 10% of the employer-financed component of any part of the benefits payable to the person that accrued after 30 June 2005.

Superannuation Act 1976

6  Paragraphs 80A(3)(c) and (d)

Repeal the paragraphs, substitute:

 (c) 12.5% of the employer‑financed component of any part of the benefits payable to the person that accrued in the 2004‑2005 financial year;

 (d) 10% of the employer-financed component of any part of the benefits payable to the person that accrued after 30 June 2005.

Superannuation Contributions Tax (Application to the Commonwealth—Reduction of Benefits) Act 1997

7  Paragraphs 4(2A)(c) and (d)

Repeal the paragraphs, substitute:

 (c) 12.5% of the employer‑financed component of any part of the benefits payable to the member that accrued in the 2004‑2005 financial year;

 (d) 10% of the employer-financed component of any part of the benefits payable to the member that accrued after 30 June 2005.

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997

8  Subparagraphs 15(6)(b)(iii) and (iv)

Repeal the subparagraphs, substitute:

 (iii) 12.5% of the employer‑financed component of any part of the benefits payable to the member that accrued in the 2004‑2005 financial year;

 (iv) 10% of the employer-financed component of any part of the benefits payable to the member that accrued after 30 June 2005.

9  Subparagraphs 15(6AA)(d)(iii) and (iv)

Repeal the subparagraphs, substitute:

 (iii) 12.5% of the employer‑financed component of any part of the benefits that would have been payable to the member but for the payment split and that accrued in the 2004‑2005 financial year;

 (iv) 10% of the employer-financed component of any part of the benefits that would have been payable to the member but for the payment split and that accrued after 30 June 2005.

10  Subparagraphs 15(6A)(b)(iii) and (iv)

Repeal the subparagraphs, substitute:

 (iii) 12.5% of the employer‑financed component of any part of the value of the age retirement benefits of the member when the fund ceased to be a constitutionally protected superannuation fund that accrued in the 2004‑2005 financial year;

 (iv) 10% of the employer-financed component of any part of the value of the age retirement benefits of the member when the fund ceased to be a constitutionally protected superannuation fund that accrued after 30 June 2005.


Part 3—Application

11  Application of amendments

(1) The amendments made by Part 1 of this Schedule apply in relation to liability to surcharge in respect of the 2004‑05 financial year and later financial years.

(2) The amendments made by items 4 to 9 of this Schedule apply in relation to benefits that become payable on or after 1 July 2004.

(3) The amendment made by item 10 of this Schedule applies in relation to superannuation funds that cease to be constitutionally protected superannuation funds on or after 1 July 2004.

 

 

 

[Minister’s second reading speech made in—

House of Representatives on 13 May 2004

Senate on 15 June 2004]

(74/04)

 

 

Overview

The Superannuation Budget Measures Act 2004, enacted by the Parliament of Australia, aims to amend existing laws concerning superannuation and related financial aspects. This legislation was introduced to address specific gaps in superannuation legislation, particularly around government co-contributions and superannuation surcharges. The policy objective behind the Act is to support low-income earners by extending the government's co-contribution scheme and to reduce the financial burden on superannuation funds by gradually lowering the maximum surcharge rates. These measures are designed to ensure that superannuation remains a viable and accessible retirement savings option for a broader section of the population while also providing some relief to superannuation funds from excessive financial penalties.

Scope and Application

The Superannuation Budget Measures Act 2004 applies to various superannuation-related laws and regulations in Australia, with the primary aim of amending laws relating to superannuation and associated financial measures. It directly affects individuals who are eligible for or receiving government co-contributions for superannuation, employers contributing to superannuation funds, and trustees of superannuation funds. The Act specifically addresses the Government's superannuation co-contribution scheme, altering the amount and conditions for the co-contribution for low-income earners starting from the 2004-05 income year, and reduces the maximum surcharge percentage for financial years from 2004-05 onwards. This Act has a Commonwealth jurisdictional reach, impacting national superannuation policies and their implementation. There are no explicit exclusions or exemptions stated in the Act; however, the application of the amendments is clearly defined to ensure they affect only the specified income years and financial years. The Act also extends its application through subordinate instruments, which may further detail the implementation and enforcement of the amended provisions.

Key Provisions

The Superannuation Budget Measures Act 2004 (C2004A01341) contains significant amendments to various superannuation-related laws, primarily focusing on the government's co-contribution scheme and the superannuation surcharge. The key operative sections of the Act include the extension of the government's co-contribution for low-income earners and the reduction of both the surcharge rate and the surcharge cap. These amendments are outlined in Schedule 1 and Schedule 2 of the Act, respectively. The Act specifies new rates and thresholds for the government co-contribution, which applies to income years starting from 2004-05, and modifies the maximum surcharge percentages and caps for financial years beginning from 2004-05. The obligations and requirements imposed by the Act primarily concern the calculation and application of the government co-contribution and the superannuation surcharge. For the government co-contribution, eligible low-income earners are entitled to a government contribution of up to 150% of their personal superannuation contributions, subject to income thresholds and caps. Employers and super funds must ensure that the correct amount of co-contribution is calculated and applied. For the superannuation surcharge, the Act mandates that the maximum surcharge percentage is reduced to 10% for financial years starting from 2005-06, and the surcharge cap is adjusted for certain superannuation benefits. Employers and super funds must comply with these new rates and caps when calculating and applying the surcharge. The Act imposes specific penalties and consequences for breaches of its provisions. While the Act does not explicitly state penalties for non-compliance, breaches of superannuation laws generally attract penalties under the Superannuation Industry (Supervision) Act 1993 (Cth). These penalties can include fines and imprisonment for serious or repeated breaches. Additionally, trustees and other responsible persons may be subject to disqualification from managing superannuation funds, and entities may be liable for compensation for losses suffered by members of the super fund due to non-compliance. The maximum penalties for offences under the Superannuation Industry (Supervision) Act 1993 (Cth) include fines of up to $21,000 for individuals and $105,000 for corporations, as well as potential imprisonment terms.

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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.