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

Administered by Department of the Treasury

Legislation au C2004A05278 In force Act

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

Act No. 184 of 1997 as amended

This compilation was prepared on 16 August 2005
taking into account amendments up to Act No. 102 of 2005

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General’s Department, Canberra

 

 

 

Contents

1 Short title [see Note 1]

2 Commencement [see Note 1]

3 Interpretation

4 Imposition of superannuation contributions surcharge

5 Rate of superannuation contributions surcharge

6 Surchargeable contributions threshold

7 Indexation

Notes

 

An Act to impose a superannuation contributions tax on members of constitutionally protected superannuation funds and to declare the rate of the tax

1  Short title [see Note 1]

  This Act may be cited as the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997.

2  Commencement [see Note 1]

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

3  Interpretation

  Expressions used in this Act that are defined by the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 have the same meanings as in that Act.

4  Imposition of superannuation contributions surcharge

  The superannuation contributions surcharge that is payable on a member’s surchargeable contributions for a financial year under the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 is imposed by this Act.

Note: Surcharge is not payable for the financial year that began on 1 July 2005 or a later financial year—see subsection 8(1) of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997.

5  Rate of superannuation contributions surcharge

 (1A) In this section:

higher income amount means:

 (a) for the 2003‑2004 financial year—$114,981; and

 (b) for the 2004‑2005 financial year—that amount as indexed under section 7.

lower income amount means:

 (a) for the 2003‑2004 financial year—$94,691; and

 (b) for the 2004‑2005 financial year—that amount as indexed under section 7.

maximum surcharge percentage means:

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

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

 (1) Unless subsection (4) applies, if the member’s adjusted taxable income for a financial year (relevant adjusted taxable income) is not less than the lower income amount but is less than the higher income amount, the rate of the superannuation contributions surcharge that applies to the member for that year is the percentage (calculated to 5 decimal places) of the member’s surchargeable contributions for that year worked out using the formula:

where:

A is:

 (2) If the percentage calculated under subsection (1) for a financial year would, if it were worked out to 6 decimal places, end with a number greater than 4, the number so calculated is increased by 0.00001.

 (3) If the member’s adjusted taxable income for a financial year is equal to, or greater than, the higher income amount, the rate of the superannuation contributions surcharge that applies to the member for that year is the maximum surcharge percentage of the member’s surchargeable contributions for that year.

 (4) If:

 (a) the member has not quoted his or her tax file number to the Commissioner in connection with the operation or the possible future operation of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997; and

 (b) the Commissioner has not, after taking all reasonable steps, found out the member’s tax file number; and

 (c) the Commissioner has written a letter to the member at the member’s last‑known address telling the member that, if the member does not quote his or her tax file number, the rate of surcharge that will apply to the member for a financial year (the relevant financial year) may be the maximum surcharge percentage of the member’s surchargeable contributions for that year;

the following provisions have effect:

 (d) if contributed amounts in respect of contributions began to be paid for or by the member to a superannuation provider before 7 May 1997 and the member’s surchargeable contributions for the relevant financial year exceed the surchargeable contributions threshold—the rate of surcharge that applies in respect of the member’s surchargeable contributions for the relevant financial year is the maximum surcharge percentage of those contributions;

 (e) if contributed amounts in respect of contributions began to be paid for or by the member to a superannuation provider before 7 May 1997 and the member’s surchargeable contributions for the relevant financial year do not exceed the surchargeable contributions threshold—the rate of surcharge that applies in respect of the member’s surchargeable contributions for the relevant financial year is nil;

 (f) subject to subsection (5), if no contributed amounts in respect of contributions began to be paid for or by the member to a superannuation provider before 7 May 1997—the rate of surcharge that applies in respect of the member’s surchargeable contributions for the relevant financial year is the maximum surcharge percentage of those contributions.

 (5) If:

 (a) the Commissioner has written a letter to a member as mentioned in paragraph (4)(c); and

 (b) the member has not quoted his or her tax file number as mentioned in paragraph (4)(a) within 3 months after the letter was sent;

paragraph (4)(f) does not apply in respect of the member unless the Commissioner has, after that period, written a further letter to the member:

 (c) to an address determined by the Commissioner as most appropriate for the letter to reach the member; and

 (d) in the same terms as the earlier letter.

6  Surchargeable contributions threshold

Surchargeable contributions threshold for the 1996‑97 financial year

 (1) The surchargeable contributions threshold for the 1996‑97 financial year is $2,000.

Surchargeable contributions for a later financial year

 (2) The surchargeable contributions threshold for a financial year (the relevant financial year) after the 1996‑97 financial year is the amount worked out using the formula:

where:

previous threshold means the surchargeable contributions threshold for the financial year immediately before the relevant financial year.

indexation factor means the number worked out under subsections 10(4) and (5) of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 for the relevant financial year.

current charge percentage means the number that is specified in subsection 19(2) of the Superannuation Guarantee (Administration) Act 1992 for the quarter beginning on 1 July of the relevant financial year.

previous charge percentage means the number that is specified in subsection 19(2) of the Superannuation Guarantee (Administration) Act 1992 for the quarter beginning on 1 July of the financial year immediately before the relevant financial year.

7  Indexation

Indexation of certain amounts for 2004‑05 financial year

 (1) Section 5 applies in relation to an indexing financial year as if each indexable amount were replaced by the amount worked out using the formula:

where:

previous indexable amount means the indexable amount for the financial year immediately before the indexing financial year.

relevant indexation factor means the indexation factor for the indexing financial year.

Rounding off of indexed amounts

 (2) If an amount worked out under subsection (1) is an amount of dollars and cents:

 (a) if the number of cents is less than 50—the amount is to be rounded down to the nearest whole dollar; or

 (b) otherwise—the amount is to be rounded up to the nearest whole dollar.

Indexation factor

 (3) The indexation factor for an indexing financial year is the number calculated, to 3 decimal places, using the formula:

where:

current March year means the period of 12 months ending on 31 March immediately before the indexing financial year.

previous March year means the period of 12 months immediately before the current March year.

Rounding up of indexation factor

 (4) If the number calculated under subsection (3) for a financial year would, if it were worked out to 4 decimal places, end with a number greater than 4, the number so calculated is increased by 0.001.

Change in index numbers

 (5) If, at any time, whether before or after the commencement of this Act, the Australian Statistician has published or publishes an index number for a quarter in substitution for an index number previously published for the quarter, the publication of the later index number is to be disregarded.

Indexable amounts to be published

 (6) The Commissioner must publish before, or as soon as practicable after, the start of the 2004‑05 financial year the indexable amounts as replaced under subsection (1) for that year.

Definitions

 (7) In this section:

indexable amount means:

 (a) an amount stated in section 5; or

 (b) if that amount has previously been altered under this section—the altered amount.

indexing financial year means the 2004‑05 financial year.

index number, for a quarter, means the estimate of full‑time adult average weekly ordinary time earnings for the middle month of the quarter published by the Australian Statistician.

Note: For the purposes of this section, Australian Statistician means the Australian Statistician referred to in subsection 5(2) of the Australian Bureau of Statistics Act 1975.

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

Note 1

The Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 as shown in this compilation comprises Act No. 184, 1997 amended as indicated in the Tables below.

For all relevant information pertaining to application, saving or transitional provisions see Table A.

Table of Acts

Act

Number
and year

Date
of Assent

Date of commencement

Application, saving or transitional provisions

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

184, 1997

7 Dec 1997

7 Dec 1997

 

Taxation Laws Amendment (Superannuation) Act (No. 2) 2002

51, 2002

29 June 2002

Schedule 1 (items 191, 192): 1 July 2003
Schedule 1 (item 202(5), (6)): Royal Assent

Sch. 1 (item
202(5), (6))

Superannuation (Surcharge Rate Reduction) Amendment Act 2003

112, 2003

12 Nov 2003

Schedule 1: 1 July 2003
Remainder: Royal Assent

Sch. 1 (item 32)

Superannuation Budget Measures Act 2004

106, 2004

30 June 2004

30 June 2004

Sch. 2 (item 11(1))

Superannuation Laws Amendment (Abolition of Surcharge) Act 2005

102, 2005

12 Aug 2005

12 Aug 2005

—

Table of Amendments

ad. = added or inserted      am. = amended      rep. = repealed      rs. = repealed and substituted

Provision affected

How affected

Note to s. 4...............

ad. No. 102, 2005

S. 5....................

am. No. 112, 2003; No. 106, 2004; No. 102, 2005

S. 6....................

am. No. 51, 2002

Subhead. to s. 7(1).........

am. No. 112, 2003; No. 102, 2005

S. 7....................

am. No. 112, 2003; No. 102, 2005

Table A

Application, saving or transitional provisions

Taxation Laws Amendment (Superannuation) Act (No. 2) 2002 (No. 51, 2002)

Schedule 1

202  Application of amendments made by Part 2

(5) Subject to subitem (6), the amendments made by items 189 to 192 apply in relation to surcharge imposed by the Superannuation Contributions Tax Imposition Act 1997 and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 for the 2003‑2004 financial year and later financial years.

(6) However, for the 2003‑2004 year, the amount that is the previous charge percentage (which is a number that relates to the 2002‑2003 year) is to be determined as if the amendments made by items 190 and 192 had not been made.

 

Superannuation (Surcharge Rate Reduction) Amendment Act 2003
(No. 112, 2003)

Schedule 1

32  Application of amendments made by Part 1

The amendments made by Part 1 apply in relation to liability to surcharge in respect of the 2003‑04 financial year and later financial years.

Note: The Acts amended by Part 1 continue to apply in relation to liability to surcharge in respect of financial years that ended before 1 July 2003 as if the amendments made by Part 1 had not been made.

 

Superannuation Budget Measures Act 2004 (No. 106, 2004)

Schedule 2

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.

 

 

Overview

The Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 was enacted to address the need for a targeted tax measure on superannuation contributions that aimed to redistribute the tax burden more fairly among different income groups. This Act was introduced by the Australian Parliament and sought to impose a surcharge on superannuation contributions for certain members, particularly those who were members of constitutionally protected superannuation funds. The policy objective was to discourage excessive contributions by higher income earners and to generate additional revenue from those who could afford to contribute more. The Act establishes the rate of the superannuation contributions surcharge and provides for the indexation of certain thresholds and rates to account for inflation and changes in earnings. This Act complements the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 by imposing the actual tax and setting out the rates at which it applies. It ensures that the surcharge is applied in a structured and progressive manner, targeting those with higher incomes while providing a threshold below which no surcharge is imposed. The Act has been subject to amendments over the years, reflecting changes in economic conditions and policy priorities, such as the reduction of surcharge rates and adjustments to the indexation mechanisms.

Scope and Application

The Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 applies to members of constitutionally protected superannuation funds, specifically targeting those who make surchargeable contributions. The Act imposes a superannuation contributions surcharge on these members, with the rate varying depending on their adjusted taxable income and certain conditions such as the quoting of tax file numbers. The surcharge is applicable from the 1996-97 financial year onwards, with thresholds and rates subject to indexation and changes via amending acts. The Act’s application is limited to financial years starting from 1 July 2005, as per the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997. Amendments made through subordinate instruments have extended or modified the application of the Act, particularly for financial years starting from 1 July 2003 and later. The Act does not apply to financial years commencing on or after 1 July 2005, as per section 8(1) of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997.

Key Provisions

The Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (the "Act") establishes a surcharge on superannuation contributions made by members of constitutionally protected superannuation funds. Section 4 of the Act imposes a superannuation contributions surcharge on such members, which is payable under the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997. The rate of this surcharge varies depending on the member's adjusted taxable income and whether their contributions commenced before 7 May 1997. For the 2003-2004 financial year, the surcharge is 14.5% for members with adjusted taxable incomes between $94,691 and $114,981, and 12.5% for those with incomes of $114,981 or more. For the 2004-2005 financial year, the surcharge is 12.5% for members with adjusted taxable incomes between $102,847.91 and $124,955.87, and 10.5% for those with incomes of $124,955.87 or more. Members who have not quoted their tax file number and the Commissioner has not been able to determine it after reasonable steps are subject to the maximum surcharge percentage if their contributions began before 7 May 1997. The Act imposes several obligations on the parties it governs. Members of constitutionally protected superannuation funds must ensure their contributions do not exceed the specified thresholds, and they must provide their tax file number to the Commissioner if requested. The Commissioner is required to calculate and impose the surcharge according to the member's income and contribution history. Additionally, the Commissioner must publish the indexable amounts for the 2004-2005 financial year before or as soon as practicable after the start of that financial year. Breaching the provisions of this Act can lead to civil and criminal consequences. For instance, failure to quote a tax file number when required can result in the imposition of the maximum surcharge percentage, as outlined in section 5(4). While the Act does not explicitly state penalties for non-compliance, breaches of tax laws generally can attract penalties under the Taxation Administration Act 1953, which includes fines up to $22,200 for individuals and greater penalties for corporations. Additionally, wilful neglect or fraud can lead to criminal charges under the Crimes Act 1914, with penalties including fines and imprisonment.

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Area of Law
Taxation Law
Instrument
Act
Concepts
Commencement Provisions
Offence Provisions
Regulatory Standards
Rate of superannuation contributions surcharge
Indexation

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