EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 331
Subject - Superannuation Industry (Supervision) Act 1993
Superannuation Industry (Supervision) Amendment Regulations 2007
(No. 4)
Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993 (the Act) provides; in part, 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 Superannuation Industry (Supervision) Regulations 1994 (the Principal Regulations) set out the contribution and benefit accrual standards, set out a member’s minimum benefit and prescribe those schemes which are exempt public sector superannuation schemes.
The purpose of the Regulations is to declare an Australian Capital Territory (ACT) superannuation scheme as an exempt public sector superannuation scheme (EPSSS) to enable scheme members to benefit from the Government’s Simplified Superannuation reforms announced in the 5 September 2006 statement A Plan to Simplify and Streamline Superannuation – Outcomes of Consultation.
Under the Income Tax Assessment Act 1997, superannuation income streams paid to members aged 60 or more are eligible for a 10 per cent tax offset, if they are paid from an untaxed complying superannuation fund or public sector superannuation scheme. A public sector superannuation scheme is either a regulated superannuation fund or an EPSSS.
For the purposes of the definition of an EPSSS, specific schemes are listed in the Principal Regulations.
The Supreme Court Act 1933 (ACT) makes provision for the payment of superannuation income streams to former members of the ACT judiciary. These payments are made from an untaxed scheme. Before these regulations commenced, the scheme established under the Supreme Court Act 1933 was neither a regulated superannuation fund nor listed as an EPSSS.
The Regulations list the scheme as an EPSSS to enable recipients of superannuation income streams paid in accordance with the Supreme Court Act 1933 to access the 10 per cent tax offset.
Details of the Regulations are set out in the Attachment A.
The Act specifies no conditions that need to be met before the power to make the proposed Regulations may be exercised.
The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Authority: Subsection 353(1) of the
Income Tax Assessment Act 1997
ATTACHMENT A
Details of Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 4)
Regulation 1 specifies the name of the regulations as the Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 4).
Regulation 2 provides that the regulations commence on the day after they are registered.
Regulation 3 provides that Schedule 1 amends the Superannuation Industry (Supervision) Regulations 1994 (SISR).
Schedule 1 Amendments
Item 1 prescribes the Supreme Court Act 1933 (ACT) in Part 3 of Schedule 1AA to the SISR. As a consequence, the scheme established under the Supreme Court Act 1933 is an exempt public sector superannuation scheme. This provides recipients (aged 60 and above) of superannuation income streams paid in accordance with the Supreme Court Act 1933 with access to the 10 per cent tax offset available under the Income Tax Assessment Act 1997.
Overview
The Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 4) were enacted to address a gap in the classification of superannuation schemes under the Superannuation Industry (Supervision) Act 1993, allowing for the simplification and streamlining of superannuation as announced in the 5 September 2006 statement, "A Plan to Simplify and Streamline Superannuation – Outcomes of Consultation". This legislative instrument was introduced by the Australian Government to ensure that the superannuation scheme established under the Supreme Court Act 1933 in the Australian Capital Territory was recognised as an exempt public sector superannuation scheme (EPSSS). This recognition was crucial to enable recipients of superannuation income streams from this scheme, particularly those aged 60 and above, to benefit from the 10 per cent tax offset available under the Income Tax Assessment Act 1997. The regulations were made under the authority of subsection 353(1) of the Superannuation Industry (Supervision) Act 1993 and commenced on the day after they were registered on the Federal Register of Legislative Instruments.
Scope and Application
The Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 4) amends the Superannuation Industry (Supervision) Regulations 1994 to classify a superannuation scheme established under the Supreme Court Act 1933 (ACT) as an exempt public sector superannuation scheme (EPSSS). This amendment aims to ensure that former members of the ACT judiciary who receive superannuation income streams from this scheme can benefit from the 10 per cent tax offset available under the Income Tax Assessment Act 1997, provided they are aged 60 or more. The regulations were made under the authority of subsection 353(1) of the Superannuation Industry (Supervision) Act 1993, which allows the Governor-General to make regulations necessary or convenient for carrying out or giving effect to the Act. The amendment came into effect on the day after the regulations were registered on the Federal Register of Legislative Instruments, and they are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Key Provisions
The Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 4) contain specific provisions that declare an Australian Capital Territory (ACT) superannuation scheme as an exempt public sector superannuation scheme (EPSSS) under the Superannuation Industry (Supervision) Act 1993 (the Act). This amendment enables scheme members to benefit from the government’s Simplified Superannuation reforms, specifically by providing them access to a 10 per cent tax offset on superannuation income streams, as outlined under the Income Tax Assessment Act 1997. This is applicable to members aged 60 or more, provided the income streams are paid from an untaxed complying superannuation fund or public sector superannuation scheme (sections 1-3).
These regulations impose obligations on the entities governed by them, primarily by ensuring that the scheme established under the Supreme Court Act 1933 (ACT) is recognised as an EPSSS. This recognition is crucial as it aligns the scheme with the Simplified Superannuation reforms, facilitating easier access to tax benefits for the relevant members. The amendment ensures that former members of the ACT judiciary, who receive superannuation income streams from this untaxed scheme, can now avail themselves of the 10 per cent tax offset (section 1, Schedule 1, Item 1).
Under the Act, there are no specific offences or penalties outlined for breaches of these regulations. However, the non-compliance with these regulations might lead to financial repercussions for the members who are not able to claim the tax offset due to the scheme not being recognised as an EPSSS. This might also involve administrative or procedural penalties if such non-compliance is identified and addressed by the relevant authorities (section 353(1)).