EXPLANATORY STATEMENT
SELECT LEGISLATIVE INSTRUMENTS 2005 No. 140
Issued by authority of the Minister for Revenue
and Assistant Treasurer
Superannuation (Government Co-contribution for Low Income Earners) Act 2003
Superannuation (Government Co-contribution for Low Income Earners) Amendment Regulations 2005 (No. 1 )
Section 55 of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (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 purpose of the Regulations is to ensure that the co-contribution reporting requirements continue to operate to allow the Commissioner of Taxation (the Commissioner) to determine co‑contribution entitlements following the cessation of the application of the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997 (the SCT Regulations).
The Regulations were required due to the abolition of the superannuation surcharge from the 2005-06 financial year onwards, which was announced in the 2005-06 Budget. The SCT Regulations set out the information required for the Commissioner to determine a surcharge liability. Some of the information was also used to make a determination to pay a co-contribution, as the Superannuation (Government Co‑contribution for Low Income Earners) Regulations 2004 (the Principal Regulations) contained several references to the SCT Regulations.
Therefore, elements of the SCT Regulations needed to be incorporated into the Principal Regulations, to ensure that the Commissioner continued to be legally entitled to obtain all the necessary information to determine co-contribution payments, following the cessation of the superannuation surcharge. The Regulations also remove references to the SCT Regulations from regulation 10 and Schedules 4, 5 and 6 to the Principal Regulations.
Details of the Regulations are set out in the Attachment.
The Act specified no conditions that needed to be met before the power to make Regulations was exercised.
The Regulations commenced on 1 July 2005.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Consultation was not undertaken because the instrument is of minor or machinery nature, does not alter existing arrangements and was required as a matter of urgency.
ATTACHMENT
Details of the Superannuation (Government Co-contribution for Low Income Earners) Amendment Regulations 2005 (No. 1 )
Regulation 1 specifies the name of the regulations as the Superannuation (Government Co-contribution for Low Income Earners) Amendment Regulations 2005 (No. 1 ).
Regulation 2 provides that the regulations commence on 1 July 2005.
Regulation 3 provides that Schedule 1 amends the Superannuation (Government Co‑contribution for Low Income Earners) Regulations 2004 (the Principal Regulations).
Schedule 1 – Amendments
Item [1]
Subregulation 10(2) states that the information that is required in a co‑contribution statement is that listed in Part 1 of Schedule 4. The Regulations substitute the reference to Part 1 of Schedule 4 to the Principal Regulations with a reference to Parts 1, 2 and 3 of Schedule 4 (see Item [5] below). These Parts update the prescribed information required in the co‑contribution statement.
Item [2]
Subregulation 10(3) prescribes further information that is required for financial years that start on or after 1 July 2004. The Regulations substitute the reference to Part 2 of Schedule 4 with a reference to the new Part 4 of Schedule 4 (see Item [5] below).
Item [3]
Subregulation 10(4)
Subregulation 10(4) sets out the prescribed date for notification of co‑contribution details to the Australian Taxation Office by superannuation providers by reference to section 43 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997. This subregulation has been substituted to provide the prescribed notification dates as:
- 31 March immediately following the financial year for self managed superannuation funds; and
- 31 October immediately following the financial year in any other case.
The description of funds that are able to lodge information at a later date has been modified from that contained in the Superannuation Contributions Tax (Assessment and Collection) Act 1997. It now refers to self managed superannuation funds rather than superannuation funds who self assess their superannuation surcharge liabilities. This modification is necessary because, for surcharge purposes, the Commissioner is required to determine, in writing, a self assessing superannuation provider. With the abolition of the surcharge the Commissioner cannot make these determinations for financial years after 30 June 2005.
Item [4]
Regulation 18 provides that in cases where the superannuation provider is unable to give the Commissioner a member’s tax file number, the provider must give a statement to the Commissioner that contains information set out in Schedule 6 to the Principal Regulations. Subregulation 18(1) has been amended to reflect the changes in the numbering of the Schedules to the regulations (see Item [5] below).
Item [5]
Schedules 4 to 6
Schedules 4 to 6 have been omitted and replaced by new Schedules 4 and 5. Schedules 4 and 5 now contain all the information required by superannuation providers and such other information that is necessary to make a co‑contribution. Employer information is no longer required due to the cessation of the superannuation surcharge and has not been included in Schedules 4 and 5.
Schedule 6 has been reserved for further use.
Overview
The Superannuation (Government Co-contribution for Low Income Earners) Act 2003 was enacted by the Parliament of Australia to address the gap in superannuation savings for low-income earners by providing a government co-contribution. The objective of this legislation is to encourage and support low-income earners to save more for their retirement by matching their voluntary superannuation contributions. The Act was introduced to create an incentive for low-income earners to participate in the superannuation system, thereby improving their retirement outcomes. The Superannuation (Government Co-contribution for Low Income Earners) Amendment Regulations 2005 (No. 1) were subsequently enacted to ensure the co-contribution reporting requirements remained effective following the abolition of the superannuation surcharge from the 2005-06 financial year. These regulations were necessary to update the reporting requirements and remove references to the superseded Superannuation Contributions Tax (Assessment and Collection) Regulations 1997, ensuring the Commissioner of Taxation could continue to determine co-contribution entitlements accurately.
Scope and Application
The Superannuation (Government Co-contribution for Low Income Earners) Act 2003 applies to low-income earners who participate in superannuation and are eligible for government co-contributions. This Act is designed to enhance the retirement savings of low-income earners by providing financial incentives through government contributions. The legislation primarily targets individuals who meet the income thresholds set out in the Act and their superannuation funds. The geographic reach of the Act is national, applying across Australia, as it is a Commonwealth Act. The Act’s application is facilitated and further defined through subordinate legislation, specifically the Superannuation (Government Co-contribution for Low Income Earners) Amendment Regulations 2005 (No. 1), which were necessitated by the abolition of the superannuation surcharge from the 2005-06 financial year. These Regulations ensure the co-contribution reporting requirements continue to function correctly, allowing the Commissioner of Taxation to determine co-contribution entitlements without the previously used surcharge information. The Regulations update the information required in co-contribution statements and the notification dates for superannuation providers, reflecting the changes brought about by the cessation of the surcharge.
Key Provisions
The Superannuation (Government Co-contribution for Low Income Earners) Amendment Regulations 2005 (No. 1) (the Regulations) were made under section 55 of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003. These Regulations aim to ensure that co-contribution reporting requirements remain effective following the cessation of the superannuation surcharge from the 2005-06 financial year. The primary changes introduced by the Regulations involve updating the information required in co-contribution statements and modifying notification dates for superannuation providers.
Section 3 of the Regulations amends the Superannuation (Government Co-contribution for Low Income Earners) Regulations 2004 (the Principal Regulations) to update the prescribed information required in co-contribution statements. Subregulation 10(2) now refers to Parts 1, 2, and 3 of Schedule 4, which list the updated information needed. Additionally, subregulation 10(3) now refers to Part 4 of Schedule 4 for financial years starting on or after 1 July 2004, providing further information necessary for determining co-contributions. These changes ensure that the Commissioner of Taxation has access to the necessary information to determine co-contribution entitlements following the abolition of the superannuation surcharge.
Furthermore, subregulation 10(4) updates the prescribed notification dates for superannuation providers to notify the Australian Taxation Office of co-contribution details. For self-managed superannuation funds, the notification date is now 31 March following the financial year, while for other cases, it is 31 October following the financial year. This change was necessary due to the abolition of the superannuation surcharge, which previously allowed for different notification dates based on self-assessment of surcharge liabilities.
Subregulation 18(1) also has been amended to reflect the changes in the numbering of the Schedules to the regulations, ensuring consistency and clarity in the reporting requirements. Schedules 4 to 6 have been omitted and replaced by new Schedules 4 and 5, which now contain all the information required by superannuation providers and such other information that is necessary to make a co-contribution. Employer information has been removed from these schedules due to the cessation of the superannuation surcharge.
The Regulations impose several obligations on the parties they govern. Superannuation providers must now comply with the updated information requirements set out in Schedules 4 and 5 and adhere to the new notification dates specified in subregulation 10(4). If a superannuation provider is unable to provide the Commissioner with a member’s tax file number, they must provide a statement containing the information set out in Schedule 6, as amended by subregulation 18(1).
Failure to comply with these obligations can lead to civil or criminal consequences. While the Act itself does not explicitly outline offences or penalties for non-compliance with the Regulations, non-compliance with reporting requirements under superannuation laws can generally result in civil penalties. For example, failure to lodge required information can result in penalties under the Taxation Administration Act 1953, which may include fines and other monetary penalties. Additionally, significant or deliberate non-compliance could potentially lead to criminal charges under the Criminal Code Act 1995, with penalties including fines and imprisonment. The exact penalties depend on the nature and extent of the breach, but they can be substantial, underscoring the importance of compliance with the reporting requirements outlined in the Regulations.