Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (GOVERNMENT CO-CONTRIBUTION FOR LOW INCOME EARNERS) REGULATIONS 2004 2004 NO. 13

EXPLANATORY STATEMENT

STATUTORY RULES 2004 No. 13

Issued by authority of the Minister for Revenue
and Assistant Treasurer

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

Superannuation (Government Co-contribution for Low Income Earners) Regulations 2004

Section 55 of the Superannuation( Government Co-contribution for Low Income Earners) Act 2003 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The Act, together with the Superannuation (Government Co-contribution for Low Income Earners) (Consequential Amendments) Act 2003 introduces a Government co-contribution for undeducted personal superannuation contributions. The Government co-contribution replaces the low income earner superannuation taxation offset. The Government co-contribution matches eligible personal superannuation contributions made by qualifying low income earners on or after 1 July 2003 up to an annual amount of $1,000. The maximum Government co-contribution will apply to those on or below an annual income of $27,500, with the co-contribution being tapered off for those on annual incomes between $27,500 and $40,000.

The purpose of the regulations is to support the necessary administration requirements of the Act.

The Regulations:

•       provide for an interest rate which applies to late Government co-contribution payments;

•       require certain information to be given to the Commissioner of Taxation (the Commissioner) by a superannuation provider in the event that the provider cannot credit a Government co-contribution payment and is returning the payment to the Commonwealth;

•       set the timeframe within which the Government co-contribution must be paid, once the Commissioner has received all the information required to make a Government co-contribution determination;

•       prescribe the information that the Commissioner must give a superannuation provider, or a person or a person's legal personal representative when the Commissioner pays a Government co-contribution;

•       prescribe the information that the Commissioner must give a superannuation provider, or a person or a person's legal personal representative when recovering an overpaid Government co-contribution amount;

•       prescribe the start date (for financial years) after which superannuation providers must give statements to the Commissioner containing prescribed information;

•       prescribe the date by which statements from superannuation providers must be given to the Commissioner; and

•       prescribe the start date (for financial years) after which a superannuation provider, if transferring a member's account to another provider, must give the receiving provider certain information.

Details of the Regulations are set out in the Attachment.

The Regulations commenced on gazettal. However, some matters to be prescribed only take effect from 1 July 2004.

The Office of Regulation Review has advised that a Regulatory Impact Statement (RIS) is not required to be included with the regulations. The RIS requirements were met by the RIS included with the Explanatory Memorandum for the Act. This should be referred to as necessary for the purposes of these regulations.

ATTACHMENT

Details of the Superannuation (Government Co-contribution for Low Income Earners) Regulations 2004

Part 1

Regulation 1 specifies the name of the regulations as the Superannuation (Government Co-contribution for Low Income Earners) Regulations 2004.

Regulation 2 provides that the regulations commence on gazettal.

Regulation 3 includes definitions of terms specified in these regulations, not otherwise defined in the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (the Act).

Part 2

Interest rate

Regulation 4 specifies the rate of interest to be applied when an interest amount is paid for late or underpaid Government co-contribution amounts. The rate of interest is equal to the base interest rate worked out under section 8AAD of the Taxation Administration Act 1953. This is the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia.

Regulation 5 has been reserved for future use.

Payments

Regulation 6 specifies that the information, which must be returned with a Government co-contribution where a superannuation provider is unable to credit a member's account with the Government co-contribution, is set out in Schedule 1.

This statement gives the Commissioner the necessary to identify the co-contribution amount being returned and assist the Commissioner to determine into which other fund payment of the Government co-contribution can be made.

Regulation 7 specifies the timeframe within which the Commissioner needs to pay the Government co-contribution. This timeframe will be within 60 days of receiving all the information necessary to determine that a Government co-contribution is payable and to determine where the Government co-contribution is to be paid.

Payment information issued by the Commissioner

Regulation 8 specifies that a notice from the Commissioner to a person, a person's legal personal representative or a superannuation provider notifying of a co-contribution payment (either directly to the individual or to the superannuation provider on behalf of an individual) must contain the information as set out in Schedule 2.

Overpayment information issued by the Commissioner

Regulation 9 specifies that a notice from the Commissioner to a person, or a person's legal personal representative or a superannuation provider giving notice of an overpaid Government co-contribution amount to be recovered and giving notice of a recovery of an overpayment through deduction or debit, must contain the information as set out in Schedule 3.

Statements from superannuation providers issued to the Commissioner and other superannuation providers.

Regulation 10 prescribes that the information that superannuation providers must provide in statements to the Commissioner is set out in Schedule 4.

The Commissioner requires certain information for the purposes of the Act in order to determine an individual's eligibility for the Government co-contribution and the amount of any entitlement. Under section 26 of the Act, superannuation providers are required to report information to the Commissioner and each other.

Subregulation 10(1) prescribes that section 26 of the Act applies to financial years that start on or after 1 July 2003.

Subregulation 10(2) prescribes that the statements superannuation providers must provide about their existing members to the Commissioner must contain the information as set out in Part 1 of Schedule 4.

This information is only reported after the end of the 2003-2004 financial year and reflects the required details as they apply on 30 June 2004. These dates are after the date of gazettal of these regulations.

Subregulation 10(3) prescribes that the statements to be given to the Commissioner by superannuation providers on their existing members and on any contributed amounts which have been paid out, contain information as set out in Part 2 of Schedule 4. The Regulation prescribes that this information is required for financial years that start on or after 1 July 2004.

This information will be collected from superannuation providers via adjustments to the superannuation surcharge member contribution statements that are currently required from superannuation providers for the purposes of the Superannuation Contributions Tax (Assessment and Collection) Act 1997.

Subregulation 10(4) prescribes that statements must be provided by the notification date within the meaning given by section 43 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997. This is either a date determined by the Commissioner or on 31 October following the financial year.

Regulation 11 prescribes that the information to be reported by superannuation providers to other superannuation providers when transferring a member's account, is set out in Schedule 5. [Subregulation 11(2)]. Subregulation 11(1) provides that this information is only required to be reported from financial years that start on or after 1 July 2004.

The Commissioner requires certain information for the purposes of the Act in order to determine an individual's eligibility for the Government co-contribution and the amount of any entitlement. To facilitate this, superannuation providers are required to report information to each other that will then be reported to the Commissioner.

Part 3: Information Generally

These provisions mirror similar provisions in the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997 since the administration of the co-contribution by the Commissioner will use as much as possible of the relevant superannuation surcharge administration design.

Regulation 12 allows the Commissioner to specify how information (other than required by Section 26 and 27) is to be given to the Commissioner.

Regulation 13 provides that the information is to be given to the Commissioner via an address specified by the Commissioner, or where no address has been specified at any office of the Commissioner.

Regulation 14 provides that where a superannuation provider changes address, the superannuation provider must advise the Commissioner of the change of address within one month of the change. The superannuation provider must also give the Commissioner sufficient information to enable the Commissioner to note the change of address.

Regulation 15 prescribes that the address for service is the last address given to the Commissioner. The regulation also prescribes for the determination of an address for service if no address has been given, or has changed but not been advised.

Regulation 16 prescribes that the address for service as determined under regulation 15 is the last known place of business or residence in Australia.

Regulation 17 prescribes that where a superannuation provider becomes aware of an omission and/or change in the information given to the Commissioner, unless the change or omission does not affect the Commissioner's determination, the superannuation provider must alert the Commissioner of the change and/or omission.

Regulation 18 prescribes that where a member gives a superannuation provider their tax file number, where they had not previously done so, the superannuation provider must give a statement to the Commissioner as set out in Schedule 6.

Regulation 19 prescribes that with the permission of the Commissioner an officer of the Commissioner may mark information given to the Commissioner.

Regulation 20 provides that where information has been given to the Commissioner which is complete and accurate, in the form required by the Regulations and the Act and is signed by the person, then the Commissioner must accept the information.

Regulation 21 provides that the Commissioner may request information in connection with the operation of the Act or Regulations.

Part 4: Miscellaneous

Regulation 22 provides by what means a notice or document may be served on a person.

Regulation 23 provides that documents or notices with either a stamped, written, printed, or facsimiled signature of the Commissioner, Second Commissioner, Deputy Commissioner or a delegate of the Commissioner is taken to be signed unless proved otherwise.

Regulation 24 specifies the rounding provisions to be applied to amounts to be paid or repaid under the Act.

Subregulation 24(1) specifies that where an interest amount is an amount of dollars and cents, the amount is to be rounded up to the nearest dollar.

Subregulation 24(2) specifies that for other non-interest amounts, where the amount is not a small underpaid amount and is not a multiple of 5 cents, the amount is to be increased to the nearest multiple of 5 cents. ("Small underpaid amounts" are rounded up to the nearest $5 under section 23 of the Act.)

Explanation of Schedules

Schedule 1 (Regulation 6)

This schedule sets out the information which must be returned with a Government co-contribution where a superannuation provider is unable to credit a member's account with the Government co-contribution.

This includes information on the supplier, superannuation provider, Government co-contribution and destination provider (where the member's account has been transferred to a different superannuation provider).

Schedule 2 (Regulation 8)

Part 1 of Schedule 2 sets out the information to be provided to a person or their legal personal representative where they have directly received a Government co-contribution payment. [Subregulation 8(1)]

Part 2 of Schedule 2 sets out the information to be provided to the superannuation provider where they have received a Government co-contribution payment on behalf of a person. [Subregulation 8(2)]

Schedule 3 (Regulation 9)

Part 1 of Schedule 3 sets out the information to be contained in the notice where the Commissioner is recovering an overpayment from an individual or their legal personal representative. [Subregulation 9(1)]

Part 2 of Schedule 3 sets out the information to be contained in the notice where the Commissioner is recovering an overpayment from a superannuation provider. [Subregulation 9(2)]

Part 3 of Schedule 3 sets out the information to be contained in the notice where the Commissioner is recovering an overpayment by debiting an account of a person in the Superannuation Holding Account Reserve or deducting from a person's future Government co-contribution amount. [Subregulation 9(3)]

Schedule 4 (Regulation 10)

The Commissioner requires personal and contribution details of the individuals for whom a Government co-contribution may be payable, as well as whether a superannuation provider would accept the Government co-contribution on the individual's behalf. The Commissioner also requires further details about these superannuation providers to enable payment of the Government co-contribution.

Part 1 of Schedule 4 sets out the information to be contained in a statement from a superannuation provider to the Commissioner about each of the superannuation provider's members from financial years that start on or after 1 July 2003. This includes information on the supplier, superannuation provider and member, including whether the superannuation provider will accept a Government co-contribution on behalf of the member.

Part 2 of Schedule 4 sets out the information to be contained in a statement from a superannuation provider to the Commissioner on each of the superannuation provider's members and any members for whom the superannuation provider has begun to pay contributed amounts. This information is required from financial years that start on or after 1 July 2004. The information includes the amount of personal superannuation contributions made by the member and other amounts which had been contributed to the account during the financial year.

Schedule 5 (Regulation 11)

This schedule sets out the information to be contained in statements from superannuation providers to other superannuation providers when transferring a member's account. This information is required from financial years that start on or after 1 July 2004. The information includes the amount of personal superannuation contributions made by the member and other amounts which had been contributed to the account during the financial year.

Schedule 6 (Subregulation 18(1)) sets out the information to be included in a statement when a superannuation provider is providing a member's tax file number to the Commissioner where the member has not previously provided the tax file number. This includes information about the supplier, superannuation provider and the member.


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