Superannuation (Excess Concessional Contributions Charge) Act 2013
No. 116, 2013
An Act to impose a charge on excess concessional contributions, and for related purposes
Contents
1 Short title
2 Commencement
3 Imposition
4 Rate of charge for a day
5 Base interest rate
Superannuation (Excess Concessional Contributions Charge) Act 2013
No. 116, 2013
An Act to impose a charge on excess concessional contributions, and for related purposes
[Assented to 29 June 2013]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Superannuation (Excess Concessional Contributions Charge) Act 2013.
2 Commencement
This Act commences on the day this Act receives the Royal Assent.
3 Imposition
Charge payable under section 95‑10 in Schedule 1 to the Taxation Administration Act 1953 is imposed.
4 Rate of charge for a day
The rate of the charge for a day is:
where:
base interest rate has the meaning given by section 5.
5 Base interest rate
(1) The base interest rate for a day depends on which quarter of the year the day is in. For each day in a quarter in the second column of the table, it is the monthly average yield of 90‑day Bank Accepted Bills published by the Reserve Bank of Australia for the month in the third column of the table.
Base interest rate |
Item | For days in this quarter... | the monthly average yield of 90‑day Bank Accepted Bills for this month applies... |
1 | 1 January to 31 March | the preceding November |
2 | 1 April to 30 June | the preceding February |
3 | 1 July to 30 September | the preceding May |
4 | 1 October to 31 December | the preceding August |
(2) If the monthly average yield of 90‑day Bank Accepted Bills for a particular month in the third column of the table in subsection (1) is not published by the Reserve Bank of Australia before the beginning of the relevant quarter, assume that it is the same as the last monthly average yield of 90‑day Bank Accepted Bills published by the Reserve Bank of Australia before that month.
(3) The base interest rate must be rounded to the second decimal place (rounding .005 upwards).
[Minister’s second reading speech made in—
House of Representatives on 19 June 2013
Senate on 24 June 2013]
Overview
The Superannuation (Excess Concessional Contributions Charge) Act 2013 was enacted by the Parliament of Australia to address the problem of excessive concessional contributions in superannuation accounts. The Act was assented to on 29 June 2013 and came into effect on the same day. Its primary objective is to impose a charge on excess concessional contributions, thereby aligning with the broader policy aim of ensuring that superannuation funds are used appropriately and in compliance with legislative guidelines. This Act supplements the existing provisions under the Taxation Administration Act 1953 by imposing a specific charge for days where excess contributions are identified. The charge rate is determined based on the base interest rate, which is derived from the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia.
Scope and Application
The Superannuation (Excess Concessional Contributions Charge) Act 2013 applies to individuals and entities that make excess concessional contributions to superannuation funds, effectively targeting those who exceed the concessional contribution cap for a given financial year. This Act is a Commonwealth legislation and its jurisdiction extends across Australia, as it is intended to regulate superannuation practices uniformly under federal law. It imposes a charge on excess concessional contributions, thereby providing a financial incentive to adhere to the prescribed contribution limits. The Act provides detailed provisions for determining the base interest rate used in calculating the charge, which varies depending on the quarter of the financial year. Notably, this Act does not specify any exclusions or exemptions, thereby applying broadly to all relevant superannuation contributions. Additionally, the application of this Act may be further defined or extended through subordinate instruments as deemed necessary by relevant authorities.
Key Provisions
The Superannuation (Excess Concessional Contributions Charge) Act 2013 imposes a charge on excess concessional contributions to superannuation funds, aiming to regulate and tax these contributions appropriately. The primary sections relevant to this purpose include the imposition of the charge (section 3), the rate of the charge for a day (section 4), and the base interest rate (section 5). Section 3 of the Act imposes a charge payable under section 95-10 in Schedule 1 to the Taxation Administration Act 1953. This means that a financial charge will be levied on certain excess contributions made to superannuation funds. The rate of this charge for a day is specified in section 4, and it varies depending on the quarter of the year. Section 5 outlines the base interest rate, which is determined by the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia, and it varies quarterly.
The Act imposes certain obligations and requirements on the parties it governs. Firstly, it mandates that the base interest rate, which is integral to calculating the daily charge, must be determined according to the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia. If the monthly average yield for a particular month is not published, the last known monthly average yield before that month is used. This requirement ensures that the interest rate applied is as accurate and timely as possible, reflecting current financial market conditions. Additionally, section 5(3) specifies that the base interest rate must be rounded to the second decimal place, with any amount of 0.005 or more rounding upwards.
Failure to comply with the provisions of this Act may result in legal consequences. While the Act does not explicitly list offences or penalties, it is part of the broader framework of the Taxation Administration Act 1953, under which penalties for non-compliance can be severe. In the context of the Taxation Administration Act, penalties may include fines, interest on unpaid taxes, and in severe cases, criminal charges. The specific penalties and consequences would depend on the nature and extent of the breach, as well as any additional provisions outlined in the related legislation. The financial charge imposed by this Act is a means to ensure that excess concessional contributions are appropriately regulated and taxed.