Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]

RETIREMENT SAVINGS ACCOUNTS AMENDMENT REGULATIONS 2004 (NO. 4) 2004 NO. 348

Subsection 200(1) of the Retirement Savings Accounts Act 1997 (the RSA Act) provides in part that the Governor-General may make regulations prescribing matters required or permitted by the RSA Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the RSA Act. The Retirement Savings Accounts Regulations 1997 (the RSA Regulations), among other matters, set out the cashing rules for Retirement Savings Account providers.

Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) provides in part that the Governor-General may make regulations prescribing matters required or permitted by the SIS Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the SIS Act. The Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations), among other matters, set out the cashing rules for superannuation funds.

The purpose of the Regulations is to amend the RSA Regulations and the SIS Regulations in order to fully achieve the intention of the Government's policy initiative in relation to the compulsory cashing of superannuation benefits for people over the age of 75. This initiative was announced in the 25 February 2004 statement 'A More Flexible and Adaptable Retirement Income System' and implemented by regulations that came into effect on 1 July 2004.

The initiative means that people who have reached the age of 75 must cash their superannuation (other than their post-65 employer-financed benefits). The purpose is to reduce the risk that concessionally taxed benefits are used for estate planning and not genuine retirement income purposes.

An exception was intended for people who were already 75 on or before 30 June 2004 who have been gainfully employed for at least 30 hours per week since that date.

However, the original amendments made to the RSA Regulations and the SIS Regulations did not achieve that aim and in fact required everyone over the age of 75 to cash their superannuation. The Regulations replace the offending provisions with ones that achieve the intended effect.

The Regulations require that the benefits of every person that turns 75 on or after 1 July 2004 must be cashed as soon as practicable after their 75th birthday (other than their post-65 employer-financed benefits).

Details of the Regulations are as follows:

Retirement Savings Accounts Amendment Regulations 2004 (No. 4)

Regulation 1 specifies the name of the Regulations as the Retirement Savings Accounts Amendment Regulations 2004 (No. 4).

Regulation 2 provides that regulations 1 to 3 and Schedule 1 are taken to have commenced on 1 July 2004.

Regulation 3 provides that Schedule 1 amends the Retirement Savings Accounts Regulations 1997.

Schedule 1 replaces the existing paragraph 4.24(1)(c) with a new paragraph ensuring that it only applies to people who turned 75 on or after 1 July 2004.

Regulations 1 to 3 and Schedule 1 are taken to have commenced on 1 July 2004. The Australian Government Solicitor has advised that the retrospective effect of the Regulations do not affect the rights of a person (other than the Commonwealth) to their disadvantage or impose liabilities on a person (other than the Commonwealth). As a result, they do not contravene subsection 48(2) of the Acts Interpretation Act 1901, which would otherwise nullify the Regulations.

Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10)

Details of the Regulations are as follows:

Regulation 1 specifies the name of the Regulations as the Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10).

Regulation 2 provides that regulations 1 to 3 and Schedule 1 are taken to have commenced on 1 July 2004.

Regulation 3 provides that Schedule I amends the Superannuation Industry (Supervision) Regulations 1994.

Schedule 1 replaces the existing paragraph 6.21(1)(c) with a new paragraph ensuring that it only applies to people who turned 75 on or after 1 July 2004.

Regulations 1 to 3 and Schedule 1 are taken to have commenced on 1 July 2004. The Australian Government Solicitor has advised that the retrospective effect of the Regulations do not affect the rights of a person (other than the Commonwealth) to their disadvantage or impose liabilities on a person (other than the Commonwealth). As a result, they do not contravene subsection 48(2) of the Acts Interpretation Act 1901, which would otherwise nullify the Regulations.

Regulation Impact Statement

A regulation impact statement is not required for these Regulations. A regulation impact statement was previously provided for this initiative and can be found in the Explanatory Statement to Statutory Rules 2004 No 148.