Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Amendment Regulations 2003 (No. 1)

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Legislation au F2003B00142 Regulations Not in force Legislative Instrument

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Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Amendment Regulations 2003 (No. 1) 2003 No. 131

EXPLANATORY STATEMENT

STATUTORY RULES 2003 No. 131

Issued by authority of the Minister for Revenue and Assistant Treasurer

Superannuation Contributions Tax (Assessment and Collection) Act 1997

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

Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2003 (No. 1)

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Amendment Regulations 2003 (No. 1)

Section 42 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (A&C Act) and section 37 of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (the CPF Act), provide that the Governor-General may make Regulations prescribing matters required or permitted by the respective Acts to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the respective Acts.

Paragraph 8(5)(a) of the A&C Act and paragraph 9(6)(a) of the CPF Act provide that the actuarial value of the benefits that accrued to, and the value of the administration expenses and risk benefits provided in respect of, a member of a defined benefits superannuation scheme for the 1999-2000 financial year and later financial years is an amount worked out by an eligible actuary using the method set out in the Regulations.

Section 13 of the A&C Act requires superannuation providers to give statements to either the Commissioner or to other superannuation providers on specific matters and any other matters required by the Regulations. Section 12 of the CPF Act requires constitutionally protected superannuation providers to give information to the Commissioner on specific and any other matters required by the Regulations.

In the May 2001 Budget the Government announced changes to the A&C Act and the Termination Payments Tax (Assessment and Collection) Act 1997 to make the transition arrangements that applied to employer eligible termination payments permanent. Consequently, from 19 August 2001 only the portion of an employer eligible termination payment that accrued after 20 August 1996 has been liable to:

a)       the superannuation contributions surcharge, if the termination payment is rolled over into a superannuation fund; or

b)       the termination payments surcharge, if the termination payment is retained by the taxpayer.

These changes were implemented by the Superannuation Contributions Taxes and Termination Payments Tax Legislation Amendment Act 2001 (which also similarly amended the CPF Act), and received Royal Assent on 15 August 2001. As a result, amendments were required to the regulations made under the A&C Act and the CPF Act.

The purpose of the proposed regulations is to reflect changes to the A&C Act and the CPF Act, making permanent the transition arrangements applying to the liability of employer eligible termination payments to either the superannuation contributions surcharge or the termination payments surcharge.

In particular the proposed regulations amend:

•       the method for calculating the amount of surchargeable contributions for a member of a defined benefit scheme; and

•       the contributed amounts information to be given to the Commissioner of Taxation and/or another superannuation provider.

Details of the amending regulations are set out in the Attachment.

The regulations commenced on gazettal.

ATTACHMENT

Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2003 (No. 1)

Explanation of the Amendments

Regulation 1 specifies the name of the regulations as the Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2003 (No. 1).

Regulation 2 provides that the regulations commence on gazettal.

Regulation 3 provides that Schedule 1 amends the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997.

Schedule 1 - Amendments

Item 1 - amends clause 2 of Schedule 2 by removing from the formula for working out the amount of surchargeable contributions, reference to 'specified roll-over amount' to reflect changes in terminology in the Superannuation Contributions Tax (Assessment and Collection) Act 1997.

Item 2 - amends clause 2 of Schedule 2 by amending the definition of H so that it now includes the post 20 August 1996 component of any eligible termination payment that is rolled over into the scheme on or after 20 August 2001.

Item 3 - amends clause 2 of Schedule 2 by omitting the definition H(1) that is now superfluous.

Item 4 - substitutes a new description of the information to be reported under item 506 of Schedule 3.

Item 5 - substitutes a new description of the information to be reported under item 215 of Schedule 4.

Item 6 - substitutes a new description of the information to be reported under item 405 of Schedule 5.

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Amendment Regulations 2003 (No. 1)

Explanation of the Amendments

Regulation 1 specifies the name of the regulations as the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Amendment Regulations 2003 (No. 1).

Regulation 2 provides that the regulations commence on gazettal.

Regulation 3 provides that Schedule 1 amends the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Regulations 1997.

Schedule 1 - Amendments

Item 1 - amends clause 2 of Schedule 1 by removing from the formula for working out the amount of surchargeable contributions, reference to 'specified roll-over amount' to reflect changes in terminology in the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997.

Item 2 - amends clause 2 of Schedule 1 by amending the definition of H so that it now includes the post 20 August 1996 component of any eligible termination payment that is rolled over into the scheme on or after 20 August 2001.

Item 3 - amends clause 2 of Schedule 1 by omitting the definition H(1) that is now superfluous.

Item 4 - substitutes a new description of the information to be reported under item 506 of Schedule 2.

 

Overview

The Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2003 (No. 1) and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Amendment Regulations 2003 (No. 1) were enacted to address the need to make permanent the transition arrangements applying to the liability of employer eligible termination payments to either the superannuation contributions surcharge or the termination payments surcharge. These regulations were issued by authority of the Minister for Revenue and Assistant Treasurer and were introduced following the changes made to the Superannuation Contributions Tax (Assessment and Collection) Act 1997 and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 through the Superannuation Contributions Taxes and Termination Payments Tax Legislation Amendment Act 2001. The policy objective of these regulations was to amend the method for calculating the amount of surchargeable contributions for a member of a defined benefit scheme and to update the contributed amounts information to be given to the Commissioner of Taxation and/or another superannuation provider. The regulations were designed to ensure that the changes in the relevant Acts were reflected in the regulations, thereby maintaining consistency in the administration and collection of superannuation contributions tax.

Scope and Application

The Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2003 (No. 1) and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Amendment Regulations 2003 (No. 1) apply to the persons and entities subject to the Superannuation Contributions Tax (Assessment and Collection) Act 1997 and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997, respectively. These Acts primarily concern superannuation providers and trustees who must adhere to the regulations to ensure compliance with the respective Acts. The regulations pertain to the calculation of surchargeable contributions for members of defined benefit schemes and the information that must be reported to the Commissioner of Taxation and/or other superannuation providers. They have a national jurisdictional reach within Australia, impacting entities across all states and territories. The regulations make permanent the transition arrangements that apply to the liability of employer eligible termination payments to either the superannuation contributions surcharge or the termination payments surcharge, effective from 19 August 2001. These changes were necessitated by the Superannuation Contributions Taxes and Termination Payments Tax Legislation Amendment Act 2001, which received Royal Assent on 15 August 2001. The regulations extend the application of the Acts by clarifying the method for calculating surchargeable contributions and updating the information reporting requirements. The regulations commenced on gazettal and do not contain specific exclusions or thresholds; however, they are subject to further modification through subordinate instruments.

Key Provisions

The Superannuation Contributions Tax (Assessment and Collection) Amendment Regulations 2003 (No. 1) and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Amendment Regulations 2003 (No. 1) amend existing regulations to reflect legislative changes made by the Superannuation Contributions Taxes and Termination Payments Tax Legislation Amendment Act 2001. Section 42 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (A&C Act) and section 37 of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (the CPF Act) provide the basis for these regulations, which aim to prescribe matters required or permitted by the respective Acts, as well as those necessary or convenient for their implementation. The regulations adjust the method for calculating the amount of surchargeable contributions for members of defined benefit schemes, particularly concerning employer eligible termination payments accrued after 20 August 1996. These regulations impose specific obligations on superannuation providers. Under section 13 of the A&C Act and section 12 of the CPF Act, they must provide statements to the Commissioner of Taxation or other superannuation providers on specified matters and any other matters required by the Regulations. These statements include updated information on contributed amounts and the revised method for calculating surchargeable contributions, particularly in relation to post-20 August 1996 components of eligible termination payments. Failure to comply with the requirements set out in these regulations may result in civil or criminal consequences. While specific penalties are not detailed in the explanatory statement, non-compliance with superannuation legislation generally can lead to penalties under the respective Acts. These penalties can include fines and, in severe cases, imprisonment for wilful or reckless breaches. The precise penalties for non-compliance would be determined by the applicable sections of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997, which are not detailed in the regulations themselves but would be referenced in the main Acts.

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