29—Insertion of sections 23AAB, 23AAC and 23AAD
After section 23 (as substituted by section 28) and section 23AA (as
relocated by section 23) insert:
23AAB—Commutation to pay deferred superannuation contributions
surcharge—lump sum entitlements
(1) In this
section—
"prescribed member" means—
(a) a
former PSS 2 member who has an amount preserved under this Part by virtue
of his or her membership of PSS 2; or
(b) a
PSS 3 member, or a former PSS 3 member.
(2) A
prescribed member who is liable for a deferred superannuation contributions
surcharge as a result of a benefit becoming payable to the prescribed member
may apply to the Board, in accordance with this section—
(a) to
receive part of the benefit in the form of a commutable pension; and
(b) to
fully commute the pension.
(3) A
prescribed member who has become entitled to a benefit, or will shortly become
entitled to a benefit, may—
(a)
estimate the amount of the surcharge the prescribed member will become
liable to pay (the "estimated surcharge amount"); and
(b)
request the Board, in the approved form, to—
(i)
withhold from the prescribed member's benefit an amount
equal to the
estimated surcharge amount (the "withheld amount"); and
(ii)
pay the balance of the benefit to the prescribed member
(being, in the case of a benefit to which the prescribed member is yet to
become entitled, a payment after the entitlement arises),
and the Board must, subject to subsection (5), comply with the
prescribed member's request.
(4) If a
prescribed member has made a request under subsection (3)(b), the
prescribed member must, before the expiration of 2 months following the issue
of a surcharge notice in respect of the prescribed member, advise the Board in
the approved form that the notice has been issued and the Board must, within 7
days of receiving that advice—
(a)
convert into a pension—
(i)
if the amount of the surcharge payable by the
prescribed member is less than the withheld amount—a portion of the
withheld amount equal to the amount payable; or
(ii)
in any other case—the whole of the withheld amount;
and
(b)
immediately after converting the withheld amount, or a portion of the
withheld amount, into a pension under paragraph (a)—commute the
pension; and
(c) pay
to the prescribed member—
(i)
the lump sum resulting from the commutation of the
pension; and
(ii)
the balance (if any) of the withheld amount.
(5) The Board may
reject an application under subsection (2) if—
(a) it
is not satisfied that, if the application were accepted, the resulting lump
sum will be applied in payment of the surcharge; or
(b) the
prescribed member fails to satisfy the Board that the prescribed member has,
or will have, a surcharge liability to the Commissioner of Taxation.
(6) The factors to be
applied in—
(a) the
conversion of a withheld amount (or part of a withheld amount) into a pension;
and
(b) the
commutation of a pension,
will be determined by the Treasurer on the recommendation of an actuary.
23AAC—Commutation to pay deferred superannuation contributions surcharge
following death of member
(1) In this
section—
"prescribed member" has the same meaning as in section 23AAB.
(2) If a
prescribed member who is liable for a deferred superannuation contributions
surcharge dies—
(a)
having made a request of the Board under section 23AAB for part of his or
her benefit to be withheld but before receiving a surcharge notice; or
(b)
having received a surcharge notice but before requesting commutation of his or
her pension under section 23AAB,
the prescribed member's spouse or, if the prescribed member is not survived by
a spouse, the prescribed member's legal representative, may, before the
expiration of the period of 2 months immediately following the prescribed
member's death or the issue of the surcharge notice (whichever is the later),
apply to the Board—
(c) to
receive the amount withheld by the Board on behalf of the deceased
prescribed member under section 23AAB in the form of a commutable
pension; and
(d) to
fully commute the pension.
(3) The Board must, on
receipt of an application under subsection (2)—
(a)
convert into a pension—
(i)
if the amount of the surcharge payable by the spouse or
estate is less than the withheld amount—a portion of the withheld amount
equal to the amount payable; or
(ii)
in any other case—the whole of the withheld amount;
and
(b)
immediately after converting the withheld amount, or a portion of the
withheld amount, into a pension under paragraph (a)—commute the
pension; and
(c) pay
to the spouse or estate—
(i)
the lump sum resulting from the commutation of the
pension; and
(ii)
the balance (if any) of the withheld amount.
(4) If a
prescribed member dies without having made a request under section 23AAB,
the prescribed member's spouse or, if the prescribed member is not survived by
a spouse, the prescribed member's legal representative, may—
(a)
estimate the amount of the surcharge the spouse or estate will become
liable to pay (the "estimated surcharge amount"); and
(b)
request the Board, in the approved form, to—
(i)
withhold from the spouse's benefit or the benefit payable
to the estate an amount equal to the estimated surcharge amount (the "withheld
amount ); and
(ii)
pay the balance of the benefit to the spouse or estate,
and the Board must, subject to subsection (7), comply with the request.
(5) An application
under subsection (4) must be made in writing to the Board before payment
of the benefit to the spouse or legal representative.
(6) The spouse or
legal representative must, before the expiration of 2 months following the
issue of a surcharge notice in respect of the member, advise the Board in the
approved form that the notice has been issued and the Board must, within 7
days of receiving that advice—
(a)
convert into a pension—
(i)
if the amount of the surcharge payable by the spouse or
estate is less than the withheld amount—a portion of the withheld amount
equal to the amount payable; or
(ii)
in any other case—the whole of the withheld amount;
and
(b)
immediately after converting the withheld amount, or a portion of the
withheld amount, into a pension under paragraph (a)—commute the
pension; and
(c) pay
to the spouse or estate—
(i)
the lump sum resulting from the commutation of the
pension; and
(ii)
the balance (if any) of the withheld amount.
(7) The Board may
reject an application under subsection (2) or (4) if it is not satisfied
that, if the application were accepted, the resulting lump sum will be applied
in payment of the surcharge or be used to reimburse the deceased
prescribed member's estate, or the spouse or other person who has paid the
surcharge on behalf of the estate.
(8) The factors to be
applied in—
(a) the
conversion of a withheld amount (or part of a withheld amount) into a pension;
and
(b) the
commutation of a pension,
will be determined by the Treasurer on the recommendation of an actuary.
(9) In this
section—
"legal representative", in relation to a deceased prescribed member, means a
person—
(a)
holding office as executor of the will of the deceased prescribed member where
probate of the will has been granted or resealed in South Australia or any
other State or a Territory; or
(b)
holding office in South Australia or any other State or a Territory as
administrator of the estate of the deceased prescribed member.
23AAD—Withheld amount
An amount withheld under section 23AAB or 23AAC—
(a) must
be retained in the PSS 3—Government Contributions Division of the Fund;
and
(b) will
be credited with interest at the rate of return determined by the Board under
section 14D(3); and
(c) may
be paid to the prescribed member (or the prescribed member's spouse or
legal representative)—
(i)
in accordance with section 23AAB or 23AAC; or
(ii)
at the direction of the Board if the Board—
(A) has not, within 2 years of withholding
the amount, received advice that a surcharge notice has been issued in respect
of the prescribed member; or
(B) considers, at any time, there is other
good reason for doing so.