Commonwealth Numbered Acts

SUPERANNUATION LEGISLATION AMENDMENT (SUPERANNUATION CONTRIBUTIONS TAX) ACT 1997 NO. 187, 1997 - SCHEDULE 1--Amendment

1 Subsection 3(1) (definition of accumulated contributions )

Repeal the definition, substitute:

accumulated contributions , in relation to a person who has ceased to be an eligible employee, means the sum of:

(a) the person's accumulated basic contributions; and

(b) the person's accumulated supplementary contributions (if any);

2 Subsection 3(1)

Insert:

surcharge debt account , in relation to a person, means the surcharge debt account kept for the person by the Board under section 16 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 .

3 Subsection 3(1)

Insert:

surcharge deduction amount , in relation to a person to or in respect of whom benefits become payable under this Act, means the surcharge deduction amount that is specified in the determination made by the Board, under section 80A, in relation to the person.

4 Subsection 42(5A)

After "other than", insert "the Superannuation Contributions Tax (Assessment and Collection) Act 1997 ,".

5 Paragraph 55(1)(a)

Omit "or (3)", substitute ", (3) or (5)".

6 Paragraph 55(1)(b)

After "(1)", insert "or (1A)".

7 At the end of paragraph 55(2)(a)

Add "or (5)".

8 Paragraph 55(2)(b)

After "(1)", insert "or (1A)".

9 Subsection 56(1)

Omit "subsection (2)", substitute "subsections (2) and (5)".

10 Subsection 56(2)

Before "the annual rate", insert "then, subject to subsection (5),".

11 Subsection 56(3)

Before "the annual rate", insert "then, subject to subsection (5),".

12 Subsection 56(4)

Before "the annual rate", insert "then, subject to subsection (5),".

13 At the end of section 56

Add:

(5) If:

(a) a person is entitled to standard age retirement pension by virtue of subsection 55(1) or (2); and

(b) the person's surcharge debt account is in debit when the pension becomes payable to the person; and

(c) the person does not make an election under section 80B or 80C;

14 Subsection 57(1)

Before "the annual rate", insert "then, subject to subsection (1A),".

15 After subsection 57(1)

Insert:

(1A) If:

(a) a person is entitled to additional age retirement pension by virtue of section 55; and

(b) the person's surcharge debt account is in debit when the pension becomes payable to the person; and

(c) the person makes an election under section 80C;

16 Paragraph 59(1)(b)

After "(1)", insert "or (1A)".

17 Section 60

Before "the annual rate", insert "then, subject to subsection (2),".

18 At the end of section 60

Add:

(2) If:

(a) the person's surcharge debt account is in debit when standard early retirement pension becomes payable to the person; and

(b) the person does not make an election under section 80B or 80C;

19 Subsection 61(1)

Before "the annual rate", insert "then, subject to subsection (1A),".

20 After subsection 61(1)

Insert:

(1A) If:

(a) a person is entitled to additional early retirement pension by virtue of section 59; and

(b) the person's surcharge debt account is in debit when the pension becomes payable to the person; and

(c) the person makes an election under section 80C;

21 Subsection 62(2)

After "Subject to", insert "subsection (2CA) and".

22 Subsection 62(2A)

After "Subject to", insert "subsection (2CA) and".

23 Subsection 62(2B)

After "the person is", insert "(subject to subsection (2CA))".

24 Subsection 62(2C)

After "the person is", insert "(subject to subsection (2CA))".

25 After subsection 62(2C)

Insert:

(2CA) If the person's surcharge debt account is in debit when the lump sum benefit becomes payable to the person, the lump sum benefit to which the person is entitled is equal to the difference between:

(a) the lump sum benefit to which the person would be entitled if this subsection did not apply to the person; and

(b) the person's surcharge deduction amount.

Omit "subsection (3)", substitute "subsections (3) and (4A)".

27 Subsection 67(3)

Before "the annual rate", insert "then, subject to subsection (4A),".

28 Subsection 67(4)

Before "the annual rate", insert "then, subject to subsection (4A),".

29 After subsection 67(4)

Insert:

(4A) If the surcharge debt account of a person to whom this section applies is in debit when invalidity pension becomes payable to the person, the annual rate of the pension to which the person is entitled is the rate worked out as provided in subsection 80D(1).

30 Subsection 68(2)

Omit "subsection (3)", substitute "subsections (3) and (4A)".

31 Subsection 68(3)

Before "the annual rate", insert "then, subject to subsection (4A),".

32 Subsection 68(4)

Before "the annual rate", insert "then, subject to subsection (4A),".

33 After subsection 68(4)

Insert:

(4A) If:

(a) a person makes an election under subsection (1); and

(b) the person's surcharge debt account is in debit when invalidity pension becomes payable to the person; and

(c) the person does not make an election under section 80B;

34 Subsection 69(2)

Before "the lump sum", insert "then, subject to subsection (3),".

35 After subsection 69(2)

Insert:

(3) If:

(a) a person makes an election under subsection (1); and

(b) the person's surcharge debt account is in debit when invalidity benefit becomes payable to the person;

(c) the amount that would be payable to the person under subsection (2) if this subsection did not apply to the person; and

(d) the person's surcharge deduction amount.

Before "the annual rate", insert "then, subject to subsection (4A),".

37 Subsection 70(3)

Before "the annual rate", insert "then, subject to subsection (4A),".

38 Subsection 70(4)

Before "the annual rate", insert "then, subject to subsection (4A),".

39 After subsection 70(4)

Insert:

(4A) If the surcharge debt account of a person to whom this section applies is in debit when invalidity pension becomes payable to the person, the annual rate of the pension to which the person is entitled is the rate worked out as provided in subsection 80D(1).

40 Subsection 71(2)

Before "the annual rate", insert "then, subject to subsection (4A),".

41 Subsection 71(3)

Before "the annual rate", insert "then, subject to subsection (4A),".

42 Subsection 71(4)

Before "the annual rate", insert "then, subject to subsection (4A),".

43 After subsection 71(4)

Insert:

(4A) If:

(a) a person makes an election under subsection (1); and

(b) the person's surcharge debt account is in debit when invalidity pension becomes payable to the person; and

(c) the person does not make an election under section 80B;

44 Subsection 72(2)

Before "the lump sum", insert "then, subject to subsection (3),".

45 After subsection 72(2)

Insert:

(3) If:

(a) a person makes an election under subsection (1); and

(b) the person's surcharge debt account is in debit when invalidity pension becomes payable to the person;

(c) the amount that would be payable to the person under subsection (2) if this subsection did not apply to the person; and

(d) the person's surcharge deduction amount.

Omit "The", substitute "Subject to subsection (3), the".

47 At the end of section 73

Add:

(3) If the person's surcharge debt account is in debit when invalidity benefit becomes payable to the person, the lump sum benefit to which the person is entitled is an amount equal to the difference between:

(a) the amount that would be payable to the person under subsection (2) if this subsection did not apply to the person; and

(b) the person's surcharge deduction amount.

Add "and subsection 68(4A) did not apply to him or her".

49 Subparagraph 77(2)(a)(ii)

After "71(1)", insert "and subsection 71(4A) did not apply to him or her".

50 Subparagraph 78(2)(a)(i) (at the end of the definition of A )

Add "and if subsection 68(4A) did not apply to him or her".

51 Subparagraph 78(2)(b)(iii) (at the end of the definition of A )

Add "and if subsection 71(4A) did not apply to him or her".

52 At the end of Division 5 of Part V

Add:

80A Surcharge deduction amount (1) If:

(a) benefits become payable to or in respect of a person who has ceased to be an eligible employee; and

(b) the person's surcharge debt account is in debit when those benefits become so payable;

(2) In making the determination, the Board must have regard to the following:

(a) the amount by which the person's surcharge debt account is in debit when those benefits become payable;

(b) the value of the employer-financed component of those benefits;

(c) the value of the benefits that, for the purpose of working out (under the Superannuation Contributions Tax (Assessment and Collection) Act 1997 ) the notional surchargeable contributions factors applicable to the person, were assumed to be likely to be payable to the person on his or her ceasing to be an eligible employee;

(d) whether the person has or had qualified for his or her maximum benefit entitlement under this Act;

(e) any other matter that the Board considers relevant.

80B Election not to have pension adjusted to take surcharge deduction amount into account A person:

(a) who, by virtue of an election ( first election ) under this Act, is entitled to a lump sum benefit under section 65, 68 or 71; and

(b) whose surcharge debt account is in debit when the benefit becomes payable to him or her;

80C Election to have additional retirement pension adjusted to take surcharge deduction amount into account A person:

(a) who is entitled to additional age retirement pension (see sections 55 and 57) or additional early retirement pension (see sections 59 and 61); and

(b) whose surcharge debt account is in debit when the benefit becomes payable to him or her;

80D Calculation of certain pension rates (1) The following rates of pension:

(a) the annual rate at which standard age retirement pension is payable to a person under subsection 56(5);

(b) the annual rate at which standard early retirement pension is payable to a person under subsection 60(2);

(c) the annual rate at which invalidity pension is payable to a person under subsection 67(4A), 68(4A), 70(4A) or 71(4A);

where:

basic pension rate means the annual rate at which the pension to which the person is entitled would be payable to the person if the person's surcharge debt account were not in debit when the pension becomes payable.

conversion factor means the factor that is applicable to the person under the determination made by the Board under subsection 154AB(1).

surcharge deduction amount means the person's surcharge deduction amount.

(2) The following rates of pension:

(a) the annual rate at which additional age retirement pension is payable to a person under subsection 57(1A);

(b) the annual rate at which additional early retirement pension is payable to a person under subsection 61(1A);

where:

basic pension rate means the annual rate at which the pension to which the person is entitled would be payable to the person if the person's surcharge debt account were not in debit when the pension becomes payable.

conversion factor means the factor that is applicable to the person under the determination made by the Board under subsection 154AB(2).

surcharge deduction amount means the person's surcharge deduction amount.

53 Subsection 84(2)

After "(2)", insert "or (3) (as the case may be)".

54 Subsection 87(2)

After "(2)", insert "or (3) (as the case may be)".

55 After subsection 92(1)

Insert:

(1A) If a spouse makes an election under subsection (1), the spouse may, at the same time, by notice in writing to the Board, elect not to have any pension payable to him or her adjusted to take the eligible employee's surcharge deduction amount into account.

56 Subsection 99(2)

After "(2)", insert "or (3) (as the case may be)".

57 Subsection 101(2)

After "(2)", insert "or (3) (as the case may be)".

58 Subsection 110P(1)

Omit ", equal to the accumulated employer contributions in respect of the person,".

59 After subsection 110P(1)

Insert:

(1A) If:

(a) the person's surcharge debt account is in debit when the productivity benefit becomes payable; and

(b) the productivity benefit is to be paid to the person or preserved in a preservation fund;

(c) if paragraphs (d) and (e) do not apply--the person's surcharge deduction amount; or

(d) if part of the person's surcharge deduction amount has, under another provision of this Act, been deducted from a benefit payable to the person--the balance of the surcharge deduction amount; or

(e) if the person's surcharge deduction amount, or the balance of the surcharge deduction amount referred to in paragraph (d), is greater than the basic amount--so much of the surcharge deduction amount, or of the balance of the surcharge deduction amount, as is equal to the basic amount.

(1B) Subsection (1A) does not apply if the whole of the person's surcharge deduction amount has, under another provision of this Act, been deducted from a benefit payable to the person.

60 Subsection 110SE(2)

Repeal the subsection, substitute:

(2) The top-up benefit is:

(a) if paragraph (b) does not apply--a lump sum benefit equal to the amount referred to in subsection (1); or

(b) if:

(i) the person's surcharge debt account is in debit when the top-up benefit becomes payable; and

(ii) the top-up benefit is to be paid to the person or to a preservation fund for the benefit of the person;

a lump sum benefit equal to the difference between the amount referred to in subsection (1) ( basic amount ); and

(iii) if subparagraphs (iv) and (v) do not apply--the person's surcharge deduction amount; or

(iv) if part of the person's surcharge deduction amount has, under another provision of this Act, been deducted from a benefit payable to the person--the balance of the surcharge deduction amount; or

(v) if the person's surcharge deduction amount, or the balance of the surcharge deduction amount referred to in subparagraph (iv), is greater than the basic amount--so much of the surcharge deduction amount, or of the balance of the surcharge deduction amount, as is equal to the basic amount.

61 Subsection 111(1)

Omit "equal to the person's accumulated contributions", substitute "worked out under subsection (1A)".

62 After subsection 111(1)

Insert:

(1A) The amount of the lump sum benefit referred to in subsection (1) is:

(a) if paragraph (b) does not apply--an amount equal to the person's accumulated contributions; or

(b) if the person's surcharge debt account is in debit when the benefit becomes payable in respect of the person--an amount equal to the difference between the person's accumulated contributions and the person's surcharge deduction amount.

Omit "subsection", substitute "subsections (1AA) and".

64 After subsection 135(1)

Insert:

(1AA) If, when a transfer value becomes payable under this Division to or in respect of a person who has ceased to be an eligible employee, the person's surcharge debt account is in debit, the amount of the transfer value is an amount equal to the difference between:

(a) the amount that would be payable to or in respect of the person under subsection (1) if this subsection did not apply to the person; and

(b) the person's surcharge deduction amount.

After "(1)", insert "or (1AA) (as the case may be)".

66 Paragraph 136(2)(a)

Omit all the words from and including "the annual rate", substitute:

the annual rate of that pension is:

(iii) if subparagraph (iv) does not apply--an amount per annum equal to the amount worked out by using the formula:

(iv) if the person's surcharge debt account is in debit when the benefit becomes payable to the person and the person does not make an election under subsection (3A) or (3B)--an amount per annum equal to the amount worked out by using the formula:

67 Paragraph 136(2)(b)

After "the annual rate of that pension is", insert ", if the person does not make an election under subsection (3A),".

68 At the end of paragraph 136(2)(b)

Add:

but, if the person makes an election under subsection (3A), the annual rate of that pension is an amount per annum equal to the amount worked out by using the formula:

69 Paragraph 136(2)(d)

Omit all the words from and including "the annual rate", substitute:

the annual rate of that pension is:

(i) if subparagraph (ii) does not apply--an amount per annum equal to the amount worked out by using the formula:

(ii) if the person's surcharge debt account is in debit when the benefit becomes payable to the person--an amount per annum equal to the amount worked out by using the formula:

70 Paragraph 136(2)(f)

Omit all the words from and including "the annual rate", substitute:

the annual rate of that pension is:

(i) if subparagraph (ii) does not apply--an amount per annum equal to the amount worked out by using the formula:

(ii) if the person's surcharge debt account is in debit when the benefit becomes payable to the person and the person does not make an election under subsection (3B)--an amount per annum equal to the amount worked out by using the formula:

71 Paragraph 136(2)(h)

Before "the lump sum", insert "then, subject to paragraph (i),".

72 After paragraph 136(2)(h)

Insert:

(i) if:

(i) a deferred benefit by way of a lump sum benefit is payable to the person in accordance with section 69, 72 or 73; and

(ii) the person's surcharge debt account is in debit when the benefit becomes payable to the person;

the lump sum benefit is an amount equal to the difference between:

(iii) the amount that would be payable to the person under paragraph (h) if this paragraph did not apply to the person; and

(iv) the person's surcharge deduction amount.

Add:

BR (basic rate) means the annual rate of pension that would be payable to the person under subparagraph (2)(b)(iii) or (iv) if the person did not make an election under subsection (3A).

CF ₁ means the conversion factor that is applicable to the person under the determination made by the Board under subsection 154AB(1).

CF ₂ means the conversion factor that is applicable to the person under the determination made by the Board under subsection 154AB(2).

SDA means the person's surcharge deduction amount.

74 After subsection 136(3)

Insert:

(3A) A person:

(a) who is entitled to a deferred benefit referred to in paragraph (2)(b); and

(b) whose surcharge debt account is in debit when the benefit becomes payable to him or her;

(3B) A person:

(a) who, by virtue of an election ( first election ) under this Act, is entitled to a deferred benefit referred to in paragraph (2)(c) or (g); and

(b) whose surcharge debt account is in debit when the benefit becomes payable to him or her;

75 After section 154A

Insert:

154AB Determination with respect to surcharge deduction amount (1) The Board must, in accordance with advice received from the Australian Government Actuary, determine in writing, in relation to persons to whom standard age retirement pension, standard early retirement pension, invalidity pension or a deferred benefit by way of any such pension has become payable, the conversion factor that, having regard to:

(a) a person's age when a benefit becomes payable to the person; and

(b) other relevant factors (if any);

(2) The Board must, in accordance with advice received from the Australian Government Actuary, determine in writing, in relation to persons to whom an additional age retirement pension, an additional early retirement pension or a deferred benefit by way of any such pension has become payable, the conversion factor that, having regard to:

(a) a person's age when a benefit becomes payable to the person; and

(b) other relevant factors (if any);

(3) A determination under this section must be published in the Gazette .

76 After section 160

Insert:

160A Board liable to pay surcharge under the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (1) To remove any doubt, it is stated that:

(a) for the purposes of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 , the Board in its capacity as a superannuation provider is an entity distinct from the Commonwealth; and

(b) consequently, section 33 of that Act does not affect the liability of the Board under that Act to pay surcharge on the surchargeable contributions of eligible employees.

77 At the end of section 168

Add:

(17) Regulations made within one year after the commencement of this subsection for purposes arising from any amendment of this Act made by Schedule 1 to the Superannuation Legislation Amendment (Superannuation Contributions Tax) Act 1997 may commence on a day:

(a) earlier than the day on which they are made; but

(b) not earlier than the commencement of this subsection.