EXPLANATORY STATEMENT
Select Legislative Instrument 2011 No. 68
Subject - Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991
Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Amendment Regulations 2011(No. 1)
The Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991 (the SMSF Levy Act) imposes a supervisory levy on self managed superannuation fund (SMSF) trustees, payable on lodgement of their annual return.
Section 7 of the SMSF Levy Act provides that the Governor-General may make regulations specifying the amount of levy payable on the lodgement of a return for a year of income. That amount cannot exceed $200.
The Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991 (the SMSF Levy Regulations) prescribe the amount of levy payable by SMSF trustees on lodgement of their annual return.
The purpose of the Regulations is to amend the SMSF Levy Regulations to increase the amount of levy payable from $150 to $180. The levy was last increased in 2007.
It is intended that the additional revenue collected from the increased levy amount, estimated to be $47 million over four years, will offset the costs of implementation of reforms to the SMSF sector announced as part of the Government’s Stronger Super package. Broadly, the reforms include the introduction of new administrative penalties for non-compliance by SMSF trustees, the introduction of competency standards for SMSF service providers, improvements to the level of data and information available on the sector, and improvements to the SMSF registration and rollover processes. The reforms aim to improve the operation, efficiency and integrity of the SMSF sector.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on the day after registration, and apply to the 2010‑11 year of income and each subsequent year of income.
No public consultation was undertaken because the Regulations give effect, in terms announced in the Budget, to an adjustment to a tax.
Authority: Section 7 of the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991
Overview
The Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Amendment Regulations 2011 (No. 1) were enacted to amend the existing regulatory framework concerning the supervisory levy imposed on trustees of self managed superannuation funds (SMSFs). This amendment to the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991, enacted by the Australian Parliament, aimed to address a funding gap arising from the implementation of reforms within the SMSF sector. The problem was that the existing levy, which had not been increased since 2007, was insufficient to cover the costs of these reforms. The policy objective of the Regulations was to raise the supervisory levy from $150 to $180, generating an estimated $47 million in additional revenue over four years. This additional revenue is intended to offset the costs of implementing various reforms aimed at enhancing the operation, efficiency, and integrity of the SMSF sector. These reforms include new administrative penalties, competency standards for SMSF service providers, and improvements to data and information availability. The Regulations, which do not require public consultation as they pertain to a tax adjustment, came into effect on the day after registration and apply from the 2010-11 year of income onwards.
Scope and Application
The Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Amendment Regulations 2011 (No. 1) pertain to trustees of self-managed superannuation funds (SMSFs) across Australia. These trustees are required to pay a supervisory levy upon the lodgement of their annual returns. The amount of this levy is specified under Section 7 of the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991, with the maximum levy not exceeding $200. The primary objective of these Regulations is to revise the amount of the levy payable from $150 to $180, effective from the 2010-11 year of income onwards. This adjustment is intended to generate additional revenue estimated at $47 million over four years, which will help offset the costs associated with implementing reforms to the SMSF sector. These reforms encompass new administrative penalties for non-compliant SMSF trustees, the establishment of competency standards for SMSF service providers, and enhancements to the data and information available on the sector, among other improvements. The Regulations apply nationally and are instrumental in supporting the broader objectives of the Stronger Super package, aiming to bolster the operation, efficiency, and integrity of the SMSF sector.
Key Provisions
The primary operative sections of the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Amendment Regulations 2011 (No. 1) pertain to the increase in the supervisory levy imposed on trustees of self-managed superannuation funds (SMSF). Specifically, section 3 of the Regulations modifies the amount of the levy payable under the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991. The levy, which trustees are required to pay upon lodging their annual return, is being increased from $150 to $180. This adjustment is detailed in section 7 of the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991, which empowers the Governor-General to set the amount of the levy, with a cap of $200.
These Regulations impose certain obligations on SMSF trustees. Firstly, they must ensure that the increased supervisory levy of $180 is paid when lodging their annual return. This obligation applies to the 2010-11 year of income and each subsequent year of income, as specified in section 4 of the Regulations. Trustees need to be aware of this increased levy amount and budget accordingly to avoid any compliance issues. Additionally, these Regulations aim to align with broader reforms announced as part of the Government’s Stronger Super package, which includes the introduction of new administrative penalties, competency standards for SMSF service providers, and improvements to the data and information available on the SMSF sector.
Failure to comply with the provisions of these Regulations could result in various consequences. While the Regulations themselves do not explicitly outline specific penalties for non-compliance, the broader legislative framework within which they operate may impose sanctions. Under the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991, penalties for non-payment of the supervisory levy may include fines and potentially other administrative penalties. The exact penalties would be determined in accordance with the applicable superannuation laws, but they could include civil penalties for late or non-payment, potentially escalating with the duration and nature of the non-compliance. Trustees are, therefore, advised to ensure strict adherence to the levy requirements to avoid any adverse consequences.