Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2002 (No. 1) 2002 No. 217
EXPLANATORY STATEMENT
STATUTORY RULES 2002 No. 217
Issued by authority of the Minister for Revenue and Assistant Treasurer
Superannuation Contributions Tax (Assessment and Collection) Act 1997
Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2002 (No. 1)
Section 42 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Act specifies how the superannuation contributions surcharge is assessed and collected.
Recent amendments to the Family Law Act 1975 and related legislation will in future allow superannuation to be split between couples on the breakdown of a marriage. The Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001 (the amending Act) inserted a new section 10A into the Act which sets out the surcharge consequences of a superannuation interest being split.
Section 10A only applies where the split of the superannuation occurs in circumstances specified in the Regulations.
The purpose of the Regulations is to specify that the surcharge consequences of a superannuation interest being split pursuant to section 10A of the Act would apply to all types of splits envisaged under the Family Law legislation. This will be achieved by referring in the regulations to the types of splits mentioned in Division 2.2 of the Family Law (Superannuation) Regulations.
Details of the Regulations are set out in the Attachment.
The Regulations would commence on the commencement of the Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001, which received Royal Assent on 18 September 2001, and which is expected to commence in late December 2002.
ATTACHMENT
Superannuation Contributions Tax (Assessment and Collection) Regulations 2002 (No. 1)
Explanation of the amendments
Regulation 1 - specifies the name of the Regulations as the Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2002 (No. 1)
Regulation 2 - provides that the Regulations would commence on the commencement of the Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001. That Act in turn commences at the same time as the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001 which commences on a date to be proclaimed or 18 months after Royal Assent (which would be 28 December 2002).
Regulation 3 - provides that Schedule 1 amends the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997.
Schedule 1 amendments
Item 1 of Schedule 1 - inserts a new Regulation 20 into the Regulations.
Section 10A of the Act sets out the surcharge consequences of superannuation being split on marriage breakdown (in particular section 10A specifies who is liable to pay surcharge when a surcharge assessment is issued after a split has taken effect but in respect of a period before the split took effect). Section 10A will apply in situations where a new interest in a fund is created for the non-member spouse, or if an amount is transferred or rolled over to another fund for the non-member spouse, but only if the new interest or transfer/rollover occurs in circumstances specified in the regulations.
The intent is to refer in the regulations to all circumstances where the Family Law legislation envisaged such new interests or transfers/rollovers would occur. These circumstances are already referred to in Division 2.2 of the Family Law Regulations in the context of determining what payments are not 'splittable payments' under the Family Law Act 1975.
Accordingly new Regulation 20 specifies the circumstances for the purposes of section 10A by providing a cross link to the circumstances in which new interests and transfers/rollovers for the non-member spouse are relevant for the purposes of Division 2.2 of the Family Law Regulations (broadly this is where a new interest is created, or amount transferred or rolled over for the non-member spouse under the Superannuation Industry (Supervision) Regulations or Retirement Savings Account Regulations or under the governing rules of the superannuation entity).
Overview
The Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2002 (No. 1) were enacted to address the policy gap arising from recent amendments to the Family Law Act 1975 and related legislation, which introduced the ability to split superannuation interests between spouses upon the breakdown of a marriage. This legislative update was issued under the authority of the Minister for Revenue and Assistant Treasurer, pursuant to Section 42 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997. The objective of these regulations is to ensure that the surcharge consequences of splitting superannuation interests, as outlined in the new Section 10A of the Act, apply to all types of splits envisaged by the Family Law legislation. These regulations were designed to align with the Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001, which received Royal Assent on 18 September 2001 and is set to commence in late December 2002. The regulations achieve this by referring to the specific circumstances outlined in Division 2.2 of the Family Law (Superannuation) Regulations, thereby ensuring that the new provisions effectively cover all relevant scenarios.
Scope and Application
The Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2002 (No. 1) pertains to the regulations under the Superannuation Contributions Tax (Assessment and Collection) Act 1997, which governs how the superannuation contributions surcharge is assessed and collected. These regulations were prompted by the recent amendments to the Family Law Act 1975 and related legislation, which allow for the splitting of superannuation interests between couples upon the breakdown of a marriage. Specifically, these regulations address the surcharge consequences of such splits, as outlined in the newly inserted section 10A of the primary Act. This new section will apply to the creation of new interests or transfers/rollovers for the non-member spouse, provided these actions occur in circumstances specified by the regulations. The Regulations aim to align the surcharge implications with the types of splits envisioned under the Family Law legislation, ensuring that the surcharge consequences are clearly defined and applicable in all relevant situations. The regulations will commence concurrently with the commencement of the Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001, expected in late December 2002.
Key Provisions
The Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2002 (No. 1) (the Regulations) are designed to address the implications of splitting superannuation interests between spouses upon the breakdown of a marriage, as provided for by recent amendments to the Family Law Act 1975. Regulation 2 ensures that these Regulations will commence on the same date as the Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001, which is expected to be in late December 2002. Regulation 3 and the subsequent Schedule 1 amendments introduce a new Regulation 20 into the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997. This new regulation aims to clarify the circumstances under which the surcharge consequences outlined in section 10A of the Act will apply. Specifically, section 10A deals with the liability for paying the surcharge when an assessment is issued after the superannuation split but pertains to a period before the split.
These Regulations impose specific obligations on trustees of superannuation funds and on the parties involved in a superannuation split. Trustees must ensure that any new interest created in a fund or any amount transferred or rolled over to another fund for a non-member spouse adheres to the circumstances specified in the Regulations. This is crucial to determine when the surcharge consequences of section 10A apply. The obligations extend to accurately documenting and reporting the details of these splits to the relevant authorities to comply with the new requirements. The parties involved in the split, such as the trustees and the spouses, must ensure that the split occurs under the conditions specified in the Regulations to avoid any unintended consequences.
Failure to comply with the provisions of these Regulations can result in significant consequences. The Act imposes penalties for non-compliance, which may include financial penalties or other enforcement actions. For instance, trustees who fail to report superannuation splits correctly may face financial penalties as stipulated by the Act. Additionally, individuals who are liable for the surcharge but fail to pay it could face further legal consequences, including potential civil or criminal proceedings. The specific penalties for breaches of the Regulations are not detailed in the explanatory statement, but they are generally aligned with the penalties outlined in the Superannuation Contributions Tax (Assessment and Collection) Act 1997.