Commonwealth Numbered Acts

SUPERANNUATION LEGISLATION AMENDMENT (SUPERANNUATION CONTRIBUTIONS TAX) ACT 1997 NO. 187, 1997 - SCHEDULE 6--Amendment

1 Subsection 3(1) (definition of benefit )

Omit "a refund of contributions and a lump sum payment under subsection 32(2), a lump sum payment under section 48", substitute "a lump sum payment under subsection 32(2) or section 48".

2 Subsection 3(1)

Insert:

productivity superannuation benefit , in relation to a member of the scheme, means productivity superannuation benefit payable in respect of the member under the determination made by the Minister under section 52 of the Defence Act 1903 .

3 Subsection 3(1)

Insert:

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

4 Subsection 3(1)

Insert:

surcharge deduction amount , in relation to a member of the scheme 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 Authority, under section 6C, in relation to the member.

5 At the end of Part I

Add:

6C Surcharge deduction amount (1) If:

(a) benefits become payable to or in respect of a member of the scheme; and

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

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

(a) the amount by which the member'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 member, were assumed to be likely to be payable to the member on his or her retirement;

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

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

6 Subsection 23(2)

Omit "subsection (3)", substitute "subsections (3) and (6)".

7 Subsection 23(5)

Omit "this section", substitute "subsection (2) or (3) but subject to subsection (6)".

8 At the end of section 23

Add:

(6) If the member of the scheme makes an election under subsection 124(1), the rate at which retirement pay is payable to the member is the rate worked out by using the formula:

where:

basic rate means the annual rate at which retirement pay would be payable to the member under this section if the member did not make the election.

conversion factor is the factor that is applicable to the member under the determination made by the Authority under section 124A.

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

9 Subsection 24(3)

After "section", insert ", then, subject to subsections (8) and (9)".

10 At the end of section 24

Add:

(8) If:

(a) a member of the scheme makes an election under this section ( first election ); and

(b) the member's surcharge debt account is in debit when retirement pay becomes payable to the member; and

(c) the member also makes an election under subsection 124(1);

(d) the Commonwealth must pay to the member the difference between the amount ( specified amount ) specified in the first election as the amount that is to be payable to the member by virtue of the commutation and:

(i) the member's surcharge deduction amount; or

(ii) if the member's surcharge deduction amount exceeds the specified amount--so much of the surcharge deduction amount as does not exceed the specified amount;

(e) the amount per annum of the retirement pay payable to the member, on and after the day on which the first election takes effect, is:

(i) if subparagraph (ii) does not apply--the amount per annum referred to in paragraph (3)(b); or

(ii) if the member's surcharge deduction amount exceeds the specified amount--the amount per annum worked out by using the formula:

where:

basic rate means the amount per annum referred to in paragraph (3)(b).

conversion factor is the factor that is applicable to the member under the determination made by the Authority under section 124A.

excess means the amount by which the member's surcharge deduction amount exceeds the specified amount.

(9) If:

(a) a member of the scheme makes an election under this section; and

(b) the member's surcharge debt account is in debit when retirement pay becomes payable to the member; and

(c) the member does not make an election under subsection 124(1); and

(d) the member's surcharge deduction amount exceeds the amount of the member's productivity superannuation benefit;

(e) the Commonwealth must pay to the member an amount equal to the amount specified in the election as the amount that is to be payable to the member by virtue of the commutation;

(f) the amount per annum of the retirement pay payable to the member, on and after the day on which the election takes effect, is the amount per annum worked out by using the formula:

where:

basic rate means the amount per annum referred to in paragraph (3)(b).

conversion factor is the factor that is applicable to the member under the determination made by the Authority under section 124A.

excess means the amount by which the member's surcharge deduction amount exceeds the amount of the member's productivity superannuation benefit.

11 Subsection 31(2)

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

12 Subsection 31(3)

Omit "this section", substitute "subsection (2)".

13 At the end of section 31

Add:

(4) If the member of the scheme makes an election under subsection 124(1), the rate at which invalidity pay is payable to the member is the rate worked out by using the formula:

where:

basic rate means the annual rate at which invalidity pay would be payable to the member under this section if the member did not make the election.

conversion factor is the factor that is applicable to the member under the determination made by the Authority under section 124A.

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

14 Subsection 32(1)

Omit all the words from and including "he is entitled", substitute:

the member is entitled:

(a) if the member does not make an election under subsection 124(1)--to invalidity pay at the rate at which retirement pay would have been payable to the member if the member had not made an election under subsection 124(1) in respect of the retirement pay; or

(b) if the member makes an election under subsection 124(1)--to invalidity pay at the rate at which retirement pay would have been payable to the member if the member had made an election under subsection 124(1) in respect of the retirement pay.

Omit all the words from and including "he is entitled", substitute:

the member is entitled to a lump sum payment of an amount worked out under subsection (3).

16 At the end of section 32

Add:

(3) The amount of the lump sum payment referred to in subsection (2) is:

(a) if paragraph (b) does not apply--a lump sum payment equal to 1.5 times the amount of the member's contributions; or

(b) if the member makes an election under subsection 124(1)--a lump sum payment equal to the difference between:

(i) the lump sum payment referred to in paragraph (a); and

(ii) the member's surcharge deduction amount.

After "section" (second occurring), insert ", then, subject to subsections (7) and (8)".

18 At the end of section 32A

Add:

(7) If:

(a) a member of the scheme makes an election under this section ( first election ); and

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

(c) the member also makes an election under subsection 124(1);

(d) the Commonwealth must pay to the member the difference between the amount ( specified amount ) specified in the first election as the amount that is to be payable to the member by virtue of the commutation and:

(i) the member's surcharge deduction amount; or

(ii) if the member's surcharge deduction amount exceeds the specified amount--so much of the surcharge deduction amount as does not exceed the specified amount;

(e) the amount per annum of the invalidity pay payable to the member, on and after the day on which the first election takes effect, is:

(i) if subparagraph (ii) does not apply--the amount per annum referred to in paragraph (5)(b); or

(ii) if the member's surcharge deduction amount exceeds the specified amount--the amount per annum worked out by using the formula:

where:

basic rate means the amount per annum referred to in paragraph (5)(b).

conversion factor is the factor that is applicable to the member under the determination made by the Authority under section 124A.

excess means the amount by which the member's surcharge deduction amount exceeds the specified amount.

(8) If:

(a) a member of the scheme makes an election under this section; and

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

(c) the member does not make an election under subsection 124(1); and

(d) the member's surcharge deduction amount exceeds the amount of the member's productivity superannuation benefit;

(e) the Commonwealth must pay to the member an amount equal to the amount specified in the election as the amount that is to be payable to the member by virtue of the commutation;

(f) the amount per annum of the invalidity pay payable to the member, on and after the day on which the election takes effect, is the amount per annum worked out by using the formula:

where:

basic rate means the amount per annum referred to in paragraph (5)(b).

conversion factor is the factor that is applicable to the member under the determination made by the Authority under section 124A.

excess means the amount by which the member's surcharge deduction amount exceeds the amount of the member's productivity superannuation benefit.

19 At the end of section 38

Add "and (in the case of a deceased member whose surcharge debt account is in debit when the pension becomes payable) had made an election under subsection 124(1)".

20 Subparagraph 41(6)(a)(ii)

Omit "or", substitute "and".

21 At the end of paragraph 41(6)(a)

Add:

(iii) in the case of a deceased member whose surcharge debt account is in debit when the pension becomes payable--had made an election under subsection 124(1); or

After "section", insert ", then, subject to subsection (4A)".

23 After subsection 41A(4)

Insert:

(4A) If:

(a) an elector makes an election under this section; and

(b) the deceased contributing member's surcharge debt account is in debit when the pension becomes payable to the elector;

(c) the Commonwealth must pay to the elector the difference between the commuted amount and:

(i) the member's surcharge deduction amount; or

(ii) if the member's surcharge deduction amount exceeds the commuted amount--so much of the surcharge deduction amount as does not exceed the commuted amount;

(d) the amount per annum of the pension payable to the elector, on and after the day on which the election takes effect, is:

(i) if subparagraph (ii) does not apply--the amount per annum referred to in paragraph (4)(b); or

(ii) if the member's surcharge deduction amount exceeds the commuted amount--the amount per annum worked out by using the formula:

where:

basic rate means the amount per annum referred to in paragraph (4)(b).

conversion factor is the factor that is applicable to the member under the determination made by the Authority under section 124A.

excess means the amount by which the member's surcharge deduction amount exceeds the commuted amount.

24 Subsection 43(2)

Omit "subsection (2A)", substitute "subsections (2AA) and (2A)".

25 After subsection 43(2)

Insert:

(2AA) If:

(a) a contributing member dies and is survived by one or more eligible orphans; and

(b) the member's surcharge debt account is in debit when pension becomes payable to the orphan or orphans;

where:

basic rate means the amount per annum equal to the sum of the rates of the pensions described in subsection (2).

conversion factor is the factor that is applicable to the member under the determination made by the Authority under section 124A.

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

26 Subsection 43(2A)

After "(2)" (first occurring), insert ", or a pension is payable under subsection (2AA),".

27 Subsection 43(2A)

Omit "that subsection", substitute "subsection (2)".

28 Subsection 43(2A)

After "(2)" (last occurring), insert "or the pension described in subsection (2AA) (as the case may be)".

29 Subsection 48(1)

Omit "equal to one and one-half times the amount of his contributions", substitute "worked out under subsection (1AA)".

30 After subsection 48(1)

Insert:

(1AA) The amount of the lump sum payment referred to in subsection (1) is:

(a) if paragraph (b) does not apply--an amount equal to 1.5 times the amount of the member's contributions; or

(b) if:

(i) the member's surcharge debt account is in debit when the payment becomes payable in respect of the member; and

(ii) an election has been made under subsection 124(2) in relation to the member's surcharge deduction amount;

31 Subsection 48A(2)

Omit "equal to 1.5 times the member's contributions in respect of the last period of effective service of the member", substitute "of an amount worked out under subsection (2A)".

32 After subsection 48A(2)

Insert:

(2A) The amount of the lump sum payment referred to in subsection (2) is:

(a) if paragraph (b) does not apply--an amount equal to 1.5 times the member's contributions in respect of the last period of effective service of the member; or

(b) if:

(i) the member's surcharge debt account is in debit when the payment becomes payable in respect of the member; and

(ii) an election has been made under subsection 124(2) in relation to the member's surcharge deduction amount;

33 Section 74

Omit "A reference", substitute "Subject to subsections (2) and (3), a reference".

34 At the end of section 74

Add:

(2) If:

(a) the surcharge debt account of a person who ceases to be an eligible member of the Defence Force is in debit when a transfer value becomes payable to the person; and

(b) the person makes an election under subsection 124(1);

(c) the amount determined by the Authority as provided in subsection (1); and

(d) the person's surcharge deduction amount.

(a) the surcharge debt account of a person who ceases to be an eligible member of the Defence Force is in debit when a transfer value becomes payable to the person; and

(b) the person does not make an election under subsection 124(1); and

(c) the person's surcharge deduction amount exceeds the amount of the person's productivity superannuation benefit;

(d) the amount determined by the Authority as provided in subsection (1); and

(e) the amount by which the person's surcharge deduction amount exceeds the amount of the person's productivity superannuation benefit.

Before "the rate" (first occurring), insert "then, subject to subsection (3A),".

36 After subsection 75(3)

Insert:

(3A) If:

(a) because of subsection (1), a person becomes entitled to retirement pay under section 23; and

(b) the person's surcharge deduction amount exceeds the amount of the person's productivity superannuation benefit;

where:

basic rate means the amount per annum referred to in subsection (3).

conversion factor is the factor that is applicable to the person under the determination made by the Authority under section 124A.

excess means the amount by which the person's surcharge deduction amount exceeds the amount of the person's productivity superannuation benefit.

Note: For productivity superannuation benefit see subsection 3(1).

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

38 After subsection 75(4)

Insert:

(4A) If:

(a) because of subsection (1), a person becomes entitled to retirement pay under section 23; and

(b) paragraphs 4(b), (c) and (d) apply to a person; and

(c) the person's surcharge deduction amount exceeds the amount of the person's productivity superannuation benefit;

where:

basic rate means the amount per annum referred to in subsection (4).

conversion factor is the factor that is applicable to the person under the determination made by the Authority under section 124A.

excess means the amount by which the person's surcharge deduction amount exceeds the amount of the person's productivity superannuation benefit.

39 Before section 125 in Part XII

Insert:

124 Election relating to surcharge deduction amount (1) A member of the scheme whose surcharge debt account is in debit when benefits (other than deferred benefits) become payable to the member under this Act may, not earlier than 3 months before, and not later than one year after, that benefit becomes payable, elect in writing that those benefits (instead of any productivity superannuation benefit payable to the member) be adjusted to take the member's surcharge deduction amount into account.

(2) If the surcharge debt account of a member of the scheme is in debit when a benefit becomes payable in respect of the member under subsection 48(1) or 48A(2), then:

(a) the personal representative or a personal representative of the member; or

(b) if there are no personal representatives of the member--a person determined by the Authority for the purposes of that subsection;

124A Determinations with respect to surcharge deduction amount (1) The Authority must, in accordance with advice received from the Australian Government Actuary, determine in writing the conversion factor that, having regard to:

(a) the age of a member of the scheme when a benefit becomes payable to the member; and

(b) other relevant factors (if any);

(2) A determination under subsection (1) must be published in the Gazette .

40 After section 130A

Insert:

130B Trustee of Scheme for purposes of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (1) For the purposes of the definition of trustee in section 43 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 , the Authority is taken to be the person who manages the superannuation scheme constituted by this Act (the Scheme ).

Note: The definitions of public sector superannuation scheme , superannuation fund and trustee in section 43 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 are relevant to this section.