Tax Laws Amendment (2009 Budget Measures No. 1) Act 2009

Administered by Department of the Treasury

Legislation au C2009A00062 In force Act

Select Document

No. 62, 2009

An Act to amend the law relating to taxation and superannuation, and for related purposes

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Exemption of income derived from foreign service

Income Tax Assessment Act 1936

Schedule 2—Government Co‑contribution for Low Income Earners

Superannuation (Government Co‑contribution for Low Income Earners) Act 2003

Schedule 3—Excess contributions tax

Income Tax Assessment Act 1997

Income Tax (Transitional Provisions) Act 1997

Tax Laws Amendment (2009 Budget Measures No. 1) Act 2009

No. 62, 2009

An Act to amend the law relating to taxation and superannuation, and for related purposes

[Assented to 29 June 2009]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Tax Laws Amendment (2009 Budget Measures No. 1) Act 2009.

2 Commencement

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

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Exemption of income derived from foreign service

Income Tax Assessment Act 1936

1 After subsection 23AG(1)

Insert:

(1AA) However, those foreign earnings are not exempt from tax under this section unless the continuous period of foreign service is directly attributable to any of the following:

(a) the delivery of Australian official development assistance by the person’s employer;

(b) the activities of the person’s employer in operating a public fund covered by item 9.1.1 or 9.1.2 of the table in subsection 30‑80(1) of the Income Tax Assessment Act 1997 (international affairs deductible gift recipients);

(c) the activities of the person’s employer, if the employer is exempt from income tax because of paragraph 50‑50(c) or (d) of the Income Tax Assessment Act 1997 (prescribed institutions located or pursuing objectives outside Australia);

(d) the person’s deployment outside Australia as a member of a disciplined force by:

(i) the Commonwealth, a State or a Territory; or

(ii) an authority of the Commonwealth, a State or a Territory;

(e) an activity of a kind specified in the regulations.

2 Application

(1) The amendment made by this Schedule applies to foreign earnings derived on or after 1 July 2009 from foreign service performed on or after 1 July 2009.

(2) Subitem (3) applies to:

(a) foreign earnings derived before 1 July 2009 from foreign service performed before, on or after 1 July 2009; and

(b) foreign earnings derived on or after 1 July 2009 from foreign service performed before 1 July 2009.

(3) Disregard the amendment made by this Schedule in determining whether the foreign earnings are exempt from tax under subsection 23AG(1) of the Income Tax Assessment Act 1936.

Schedule 2—Government Co‑contribution for Low Income Earners

Superannuation (Government Co‑contribution for Low Income Earners) Act 2003

1 Paragraph 9(1)(b)

Omit “the 2004‑05 income year or a later income year”, substitute “the 2004‑05 income year, the 2005‑06 income year, the 2006‑07 income year, the 2007‑08 income year or the 2008‑09 income year”.

2 Paragraph 9(1)(b)

Omit “year.”, substitute “year; and”.

3 At the end of subsection 9(1)

Add:

(c) for the 2009‑10 income year, the 2010‑11 income year or the 2011‑12 income year—an amount equal to the sum of the eligible personal superannuation contributions the person makes during the income year; and

(d) for the 2012‑13 income year or the 2013‑14 income year—an amount equal to 125% of the sum of the eligible personal superannuation contributions the person makes during the income year; and

(e) for the 2014‑15 income year or a later income year—an amount equal to 150% of the sum of the eligible personal superannuation contributions the person makes during the income year.

4 Subsection 10(1A)

5 After subsection 10(1A)

Insert:

(1B) The amount of the Government co‑contribution in respect of a person for the 2009‑10 income year, the 2010‑11 income year or the 2011‑12 income year must not exceed the maximum amount worked out using the following table:

Maximum Government co‑contribution
Item	Person’s total income for the income year	Maximum amount
1	the lower income threshold or less	$1,000
2	more than the lower income threshold but less than the higher income threshold	$1,000 reduced by 3.333 cents for each dollar by which the person’s total income for the income year exceeds the lower income threshold

(1C) The amount of the Government co‑contribution in respect of a person for the 2012‑13 income year or the 2013‑14 income year must not exceed the maximum amount worked out using the following table:

Maximum Government co‑contribution
Item	Person’s total income for the income year	Maximum amount
1	the lower income threshold or less	$1,250
2	more than the lower income threshold but less than the higher income threshold	$1,250 reduced by 4.167 cents for each dollar by which the person’s total income for the income year exceeds the lower income threshold

(1D) The amount of the Government co‑contribution in respect of a person for the 2014‑15 income year or a later income year must not exceed the maximum amount worked out using the following table:

Maximum Government co‑contribution
Item	Person’s total income for the income year	Maximum amount
1	the lower income threshold or less	$1,500
2	more than the lower income threshold but less than the higher income threshold	$1,500 reduced by 5 cents for each dollar by which the person’s total income for the income year exceeds the lower income threshold

6 Subsection 10(2)

Omit “Subsections (1) and (1A) has”, substitute “Subsections (1), (1A), (1B), (1C) and (1D) have”.

7 Application

The amendments made by this Schedule apply to the 2009‑10 income year and later income years.

Schedule 3—Excess contributions tax

Income Tax Assessment Act 1997

1 Subsection 292‑20(2)

Repeal the subsection (not including the notes), substitute:

(2) Your concessional contributions cap is:

(a) for the 2007‑2008 *financial year—$50,000; or

(b) for the 2008‑2009 financial year—$50,000; or

(d) for the 2010‑2011 financial year or a later financial year—the amount worked out by indexing annually the amount mentioned in paragraph (c).

2 Subsection 292‑85(2)

Repeal the subsection, substitute:

(2) Your non‑concessional contributions cap is:

(a) for the 2007‑2008 *financial year—the amount that is 3 times your *concessional contributions cap for the year; and

(b) for the 2008‑2009 financial year—the amount that is 3 times your concessional contributions cap for the year; and

(c) for the 2009‑2010 financial year or a later financial year—the amount that is 6 times your concessional contributions cap for the year.

3 Paragraph 292‑170(6)(b)

Omit “apart from this subsection”, substitute “disregarding this subsection and subsection (8)”.

4 At the end of section 292‑170

Add:

(8) Despite subsection (1), your notional taxed contributions for the *financial year in respect of the *defined benefit interest are equal to your *concessional contributions cap for the financial year if:

(a) this Subdivision applies in relation to you because you have a defined benefit interest in a financial year; and

(b) disregarding this subsection, the notional taxed contributions for the financial year in respect of the defined benefit interest exceed your concessional contributions cap for the financial year; and

(i) you held the defined benefit interest in a *superannuation fund on 12 May 2009; or

(ii) all the requirements in subsection (9) are satisfied; and

(d) the conditions (if any) specified in the regulations are satisfied; and

(e) the financial year is the 2009‑2010 financial year or a later financial year.

(9) For the purposes of subparagraph (8)(c)(ii), the requirements are as follows:

(a) you held a *defined benefit interest (the original interest) in a *superannuation fund (the original fund) on 12 May 2009;

(b) the defined benefit interest mentioned in paragraph (8)(a) (the current interest) is in a different superannuation fund (the current fund);

(i) was transferred directly to the current interest after 12 May 2009; or

(ii) was transferred to another *superannuation interest after 12 May 2009, and was later transferred to the current interest (whether directly or through a series of transfers between superannuation interests);

(d) your rights to accrue future benefits under the current interest are equivalent to your rights to accrue future benefits under the original interest;

(e) either:

(i) the notional taxed contributions mentioned in paragraph (8)(b) do not exceed what they would have been if the transfer mentioned in paragraph (c) had not taken place; or

(ii) the conditions (if any) specified in the regulations are satisfied;

(f) the conditions (if any) specified in the regulations are satisfied.

5 Paragraph 960‑285(2)(a)

Repeal the paragraph, substitute:

(a) firstly:

(i) if the amount is mentioned in item 9 in section 960‑265 (concessional contributions cap)—multiplying the amount for the 2009‑2010 financial year by its *indexation factor mentioned in subsection (3A); or

(ii) otherwise—multiplying the amount for the 2007‑2008 income year or financial year by its indexation factor mentioned in subsection (4); and

6 Subsection 960‑285(3)

Omit “subsection (4)”, substitute “subsection (3A) or (4)”.

7 After subsection 960‑285(3)

Insert:

Indexation factor

(3A) For indexation of the amount on an annual basis in accordance with subparagraph (2)(a)(i), the indexation factor is:

8 Subsection 960‑285(4) (heading)

Repeal the heading.

9 Subsection 960‑285(4)

After “annual basis”, insert “in accordance with subparagraph (2)(a)(ii)”.

10 Subsection 960‑285(5)

Omit “subsection (4)”, substitute “subsection (3A) or (4)”.

Income Tax (Transitional Provisions) Act 1997

11 Subsection 292‑20(2)

Repeal the subsection, substitute:

(2) Despite section 292‑20 of the Income Tax Assessment Act 1997, your concessional contributions cap for that financial year is:

(a) if the year is the 2007‑2008 financial year—$100,000; or

(b) if the year is the 2008‑2009 financial year—$100,000; or

(d) if the year is the 2010‑2011 financial year—$50,000; or

(e) if the year is the 2011‑2012 financial year—$50,000.

Note: This amount is not indexed.

[Minister’s second reading speech made in—

House of Representatives on 27 May 2009

Senate on 15 June 2009]

(110/09)

Overview

The Tax Laws Amendment (2009 Budget Measures No. 1) Act 2009 was enacted by the Parliament of Australia to address issues relating to taxation and superannuation, as well as related matters. The Act aims to introduce amendments to existing tax laws to support budget measures announced in the 2009 federal budget. It modifies the Income Tax Assessment Act 1936, the Superannuation (Government Co‑contribution for Low Income Earners) Act 2003, and the Income Tax Assessment Act 1997, among others, to implement changes in tax treatment of foreign service income, adjustments to government co-contributions for low-income earners' superannuation, and modifications to the excess contributions tax regime. The Act's amendments are designed to provide targeted support and adjustments to various tax provisions, ensuring compliance with the latest fiscal policy objectives.

Scope and Application

The Tax Laws Amendment (2009 Budget Measures No. 1) Act 2009 amends the law relating to taxation and superannuation in Australia. The Act applies to individuals, employers, and superannuation funds, particularly focusing on the tax treatment of income derived from foreign service, the government co-contribution for low-income earners in superannuation, and the caps on concessional and non-concessional contributions to superannuation. It is applicable nationwide, as it is a Commonwealth Act. The Act applies to foreign service income derived on or after 1 July 2009, with specific transitional provisions for income derived before this date. It also modifies the income years for which the government co-contribution is applicable, extending the eligibility period and adjusting the contribution amounts for certain income years. For superannuation contributions, the Act sets new caps and indexation rules for concessional and non-concessional contributions effective from the 2009-2010 financial year onwards. The Act allows for further specification and adjustments through regulations, thereby extending its application beyond the primary legislative text.

Key Provisions

The Tax Laws Amendment (2009 Budget Measures No. 1) Act 2009 makes several significant amendments to existing tax legislation, particularly concerning income derived from foreign service, superannuation, and the imposition of an excess contributions tax. These amendments are spread across three schedules within the Act. The first schedule modifies the Income Tax Assessment Act 1936 to restrict the tax exemption on income derived from foreign service. Under section 23AG, such income is exempt from tax unless the continuous period of foreign service is directly attributable to certain activities, such as the delivery of Australian official development assistance, activities of certain public funds, or the person's deployment as a member of a disciplined force. These changes apply to foreign earnings derived from service performed on or after 1 July 2009. The second schedule amends the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 to extend the eligibility period for the Government co-contribution to superannuation. The amendments broaden the income years for which individuals can receive the co-contribution, with varying contribution rates based on the income year. For instance, for the 2009-10 to 2011-12 income years, the Government co-contribution is equal to the sum of eligible personal superannuation contributions. For the 2012-13 to 2013-14 income years, it is 125% of the sum, and for the 2014-15 income year and later, it is 150%. Additionally, the Act sets maximum limits on the Government co-contribution based on the individual's total income for the income year. These amendments apply to income years starting from the 2009-10 year. The third schedule amends the Income Tax Assessment Act 1997 to impose an excess contributions tax. It introduces caps on concessional and non-concessional contributions, with specific amounts for the 2007-2008 to 2009-2010 financial years and indexation for later years. It also modifies the calculation of notional taxed contributions for defined benefit interests, ensuring they do not exceed the concessional contributions cap for certain financial years. Furthermore, the Act introduces transitional provisions for the concessional contributions cap for the 2007-2008 to 2011-2012 financial years. The Act imposes specific obligations on taxpayers, superannuation funds, and employers to ensure compliance with the new tax rules. For example, taxpayers must accurately report income derived from foreign service and ensure it meets the criteria for exemption. Superannuation funds and employers must adhere to the new contribution limits and rules for the Government co-contribution. Additionally, taxpayers with defined benefit interests must comply with the new rules regarding notional taxed contributions. Failure to comply with these obligations can result in financial penalties and other legal consequences. Breaches of the new tax provisions can result in significant penalties and consequences. For instance, under the Income Tax Assessment Act 1997, individuals who fail to comply with the excess contributions tax rules may be subject to penalties, including the imposition of tax and interest on the excess contributions. The maximum penalties for serious tax offences can be substantial, often based on the degree of negligence or intentional disregard of the tax laws. Additionally, persistent non-compliance or failure to report income accurately can lead to criminal charges, resulting in fines and potential imprisonment. Therefore, it is crucial for taxpayers and entities governed by these provisions to understand and adhere to the new rules to avoid these adverse consequences.

Area of Law: Taxation Law
Instrument: Act
Concepts: Commencement Provisions; Definitions & Interpretation; Offence Provisions; Regulatory Standards

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

Legislation content

Overview

Scope and Application

Key Provisions

Legal classification tags

Interactions

Authorises

All Versions