EXPLANATORY STATEMENT

Select Legislative Instrument 2006 No. 260

Superannuation Guarantee (Administration) Act 1992

Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 3)

Section 80 of the Superannuation Guarantee (Administration) Act 1992 (the Act) provides that the Governor-General may make regulations prescribing all 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.

Under the Act, employers who do not make sufficient superannuation contributions for their eligible employees are required to pay the superannuation guarantee (SG) charge to the Australian Taxation Office (ATO). Employers are responsible for self-assessing their liability to the SG charge. The ATO has a compliance program in place with a view to ensuring employers meet their SG obligations.

The purpose of the Regulations is to ensure that the Commissioner of Taxation (the Commissioner) has access to information to assist in monitoring SG compliance. The Commissioner previously had access to this information under the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997 (the SCT Regulations). However, the SCT Regulations ceased to apply with effect from the 2005-06 financial year, which meant the Commissioner did not have access to this information for periods after 30 June 2005.

The Regulations amend the Superannuation Guarantee (Administration) Regulations 1993 to incorporate provisions which allow the Commissioner to specify the contribution details that superannuation providers must report. This provides the Commissioner with the information required to monitor SG compliance for the 2005-06 financial year and future financial years.

Details of the Regulations are set out in the Attachment.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

ATTACHMENT

 

Details of the Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 3)

Regulation 1 specifies the name of the Regulations as the Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 3)

Regulation 2 provides that the Regulations commence on the day after they are registered.

Regulation 3 provides that Schedule 1 amends the Superannuation Guarantee (Administration) Regulations 1993 (the Principal Regulations).

Schedule 1 – Amendments

Item [1] – After regulation 15

New regulation 16 sets out the information that is to be included in a superannuation provider’s statement to the Commissioner.

Subregulation 16(1) prescribes that regulation 16 applies to superannuation providers who received employer contributions on or after 1 July 2005.

Subregulation 16(2) requires the superannuation provider to provide a statement containing information prescribed in regulation 16.

For the purposes of section 78 of the Act, a member of a fund includes all members, with the exception of those members whose entitlements have been transferred out of the fund during the year. For the purposes of section 78 of the Act, a holder of an RSA includes all holders, with the exception of those holders whose entitlements have been transferred out of the RSA during the year.

A member of a fund or RSA holder includes a person who received their full benefit during the year, retired, or rolled their benefit over to an Approved Deposit Fund or annuity product.

Subregulation 16(3) sets out the prescribed information that is required to be provided in the statement. Paragraph 16(3)(a) requires details of the provider. Paragraph 16(3)(b) requires details of each member or RSA holder who had employer contributions made to their superannuation fund or RSA during the year. This includes a member for whom a benefit certificate is current under the Act during the year. This ensures details are collected for members with only a defined benefit entitlement, which informs the Commissioner as to why these members potentially have no contributions made on their behalf.

Paragraph 16(3)(c) requires the superannuation provider to provide details of any contributions made by, or on behalf of, a member or RSA holder. The provider is also required to provide details of amounts reported to the provider under section 78A of the Act. Where a person’s entitlements are transferred between superannuation providers during the year, section 78A of the Act requires the transferring provider to report contribution details for that person to the receiving provider, so the receiving provider can report that information to the Commissioner under section 78 of the Act.

Subregulation 16(4) allows the Commissioner to exempt superannuation providers from providing details of contributions outlined in a provision of subregulation 16(3). The Commissioner provides guidance on the application of this provision to superannuation providers.

Subregulations 16(5) and 16(6) set out lodgement dates for the statement as:

•                31 March immediately following the financial year for self managed superannuation funds; and

•                31 October immediately following the financial year in any other case.

The description of funds that are able to lodge information at a later date is modified from that contained in the Superannuation Contributions Tax (Assessment and Collection) Act 1997. It now refers to self managed superannuation funds rather than superannuation funds who self assess their superannuation surcharge liabilities. This modification is necessary because, for surcharge purposes, the Commissioner was required to determine, in writing, a self assessing superannuation provider. With the abolition of the surcharge the Commissioner cannot make these determinations for financial years after 30 June 2005.

New regulation 17 sets out the information that is to be included in a superannuation provider’s statement to another superannuation provider where a member or RSA holder’s entitlements are transferred between superannuation providers during the year.

Subregulation 17(1) prescribes that regulation 17 applies to superannuation providers who received employer contributions on or after 1 July 2005.

Subregulation 17(2) requires the superannuation provider to provide a statement containing information prescribed in regulation 17. The transferring provider must provide the receiving provider with the information the transferring provider would have been required to report for the person under regulation 16 if the person had remained a member or RSA holder of the transferring provider at the end of the year.

The transferring provider must provide the statement to the receiving provider within 30 days after the day of the transfer.

Subregulation 17(3) allows the Commissioner to exempt superannuation providers from providing details of contributions required in subregulation 17(2). The Commissioner provides guidance on the application of this provision to superannuation providers.