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Treasury and Finance Legislation (Amendment)
Bill
Victorian Legislation Parliamentary Documents
As Sent Print
EXPLANATORY MEMORANDUM
Clause Notes
PART 1--PRELIMINARY
Clause 1 states the purpose of the Bill is to amend specified Acts relating
to workers' compensation insurance, public sector
superannuation, professional standards and the Victorian
Managed Insurance Authority.
Clause 2 provides the commencement arrangements for the provisions.
Most of the amendments are to come into operation on the day
after the day on which the Bill receives the Royal Assent.
However, some provisions relating to workers' compensation are
to come into effect on 6 May 2004, the date that the Minister
speaks to the Second Reading.
PART 2--AMENDMENT OF ACCIDENT COMPENSATION
ACT 1985
Clause 3 amends section 9(1)(c) of the Accident Compensation Act 1985
as a consequence of the grouping amendments made by clause 12
of the Bill and to delete obsolete references.
PART 3--AMENDMENT OF ACCIDENT COMPENSATION
(WORKCOVER INSURANCE) ACT 1993
The amendments contained in clauses 4 to 10 are necessary to
supplement the 2001 amendments to the Accident
Compensation (WorkCover Insurance) Act 1993 (designed to
address the consequences of the Court of Appeal decision in
Victorian WorkCover Authority v I R Cootes [2001] VSCA 85).
A statutory time limit is consistent with other statutory
restrictions for refund claims.
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551160 BILL LA AS SENT 28/5/2004
Clause 4 amends section 22 of the Accident Compensation (WorkCover
Insurance) Act 1993 to place a time limit on the subject of a
review under that section.
Sub-clause (1) inserts a new sub-section (1A) into section 22 of
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the Accident Compensation (WorkCover Insurance) Act
1993.
Proposed sub-section (1A) limits an employer's right to seek
review under section 22 of the Accident Compensation
(WorkCover Insurance) Act 1993 for past payments of
premium or amounts purportedly paid as premium to the current
policy year in which the application for a review is made plus the
four previous policy periods.
Sub-clause (2) inserts new sub-sections (3) and (4) into
section 22 of the Accident Compensation (WorkCover
Insurance) Act 1993.
Proposed sub-section (3) defines "premium" for the purposes of
this section.
Proposed sub-section (4) provides that if the Authority
determines that an adjustment of premium was not authorised in
respect of any of the policy periods to which the application
relates, the Authority must discontinue that review and review
the application under section 28A of the Accident
Compensation (WorkCover Insurance) Act 1993 as if the
application had been made under section 22A of the Accident
Compensation (WorkCover Insurance) Act 1993.
Clause 5 inserts a new section 22A into the Accident Compensation
(WorkCover Insurance) Act 1993 which sets out the
application process for refunds of premium.
Proposed sub-section (1) provides that proceedings for the refund
or recovery of premium, whether paid before or after the date
specified, must only be brought as provided in the new section.
Proposed sub-section (2) provides that, if an employer claims to
be entitled to receive a refund of or to recover premium, the
employer must lodge with the Authority an application for a
refund in a form approved by the Authority.
Proposed sub-section (3) provides that an application under sub-
section (2) may only be made in relation to premium for the
current policy period in which the application is made plus the
four previous policy periods.
Proposed sub-section (4) provides that new section 22A does not
apply to a written request for a refund of premium received by
the Authority before the date specified.
2
Proposed sub-section (5) provides that, for the purposes of sub-
section (4), a written request received by an authorised agent of
the Authority is not to be taken to be received by the Authority
unless certain circumstances apply.
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Proposed sub-section (6) defines "premium" and
"proceedings" for the purposes of the new section.
Clause 6 inserts new sub-sections (3) and (4) into section 27 of the
Accident Compensation (WorkCover Insurance) Act 1993.
Proposed sub-section (3) provides that if in the course of a review
under section 27 of the Accident Compensation (WorkCover
Insurance) Act 1993, the Authority determines that an
adjustment of premium, which is the subject of the review, was
not authorised, the Authority must discontinue that review and
conduct a review under section 28A of that Act as if it had been
an application under section 22A of that Act.
Proposed sub-section (4) provides that if the Authority makes a
determination under sub-section (3) to conduct a review under
section 28A of that Act, it must advise the employer in writing of
that determination.
Clause 7 inserts a new sub-section (3) into section 28 of the Accident
Compensation (WorkCover Insurance) Act 1993, to provide
that an adjustment under that section, arising from a review under
section 28A of that Act, may only relate to the current policy
period in which the application is made plus the four previous
policy periods in the case of an application under section 22 or
22A of that Act. In the case of a review under section 28A of that
Act, which arose from a section 27(3) determination, an
adjustment under section 28 may only relate to the policy period
current at the date of the notice under section 27(4) plus the four
previous policy periods. However, these limits do not apply in
the case of fraud on the part of the employer, or any person
acting or apparently acting on the employer's behalf.
Clause 8 inserts new sections 28A and 28B into the Accident
Compensation (WorkCover Insurance) Act 1993.
New section 28A provides for review of premium in certain
circumstances.
Proposed sub-section (1) provides that section 28A applies if an
employer makes an application under section 22A and the
Authority was not authorised to adjust the premium in respect of
which the application relates, at the time that the Authority made
the adjustment, or the Authority has made a determination under
section 22(4) or 27(3).
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Proposed sub-section (2) provides that the Authority may review
the amount calculated as a premium in respect of premium, in the
case of an application under section 22A or section 22 (where a
determination under section 22(4) has been made), for the current
policy year in which the application is made plus the four
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previous policy periods. In the case of a determination under
section 27(3), the Authority may review the amount calculated as
a premium in respect of premium for the policy period current at
the date of the notice under section 27(4) plus the four previous
policy periods.
Proposed sub-section (3) provides that the Authority may have
regard to any matter relevant to the determination or calculation
of premium in conducting the review.
Proposed sub-section (4) defines "premium" for the purposes of
this section.
New section 28B provides for adjustment of premium after a
review under the new section 28A.
Proposed sub-section (1) provides that after a review under
section 28A the Authority must determine the reviewed
assessment amount for the relevant period, the total premium
payment and any deficit amount or excess amount.
Proposed sub-section (2) provides that the Authority must, by
written notice to the employer, specify the amount determined to
be the reviewed assessment amount, the total premium payment,
and, if applicable, any deficit amount or excess amount, and
adjust the amount of premium so that the amount is the reviewed
assessment amount.
Proposed sub-section (3) defines the terms "deficit amount",
"excess amount", "premium", "relevant period", "reviewed
assessment amount" and "total premium payment".
Clause 9 amends section 29(1) of the Accident Compensation
(WorkCover Insurance) Act 1993 so that it refers to
section 26(4), 28(2) or 28B(2).
Clause 10 inserts a new section 31A into the Accident Compensation
(WorkCover Insurance) Act 1993. The new section provides
that the excess amount be refunded to the employer or,
alternatively, applied against any liability of the employer to the
Authority under this Act with any part of the excess amount not
so applied be then refunded to the employer.
4
Clause 11 amends section 61(2) of the Accident Compensation
(WorkCover Insurance) Act 1993 to provide the Authority with
a discretion to waive, wholly or in part, an employer's liability for
reimbursement of uninsured claims costs.
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Clause 12 substitutes for section 66 of the Accident Compensation
(WorkCover Insurance) Act 1993 provisions equivalent to the
grouping provisions contained in the Pay-roll Tax Act 1971 to
align the WorkCover grouping provisions more closely with the
current pay-roll tax grouping provisions. Furthermore, the
amendments are necessary as the result of decisions made in the
Muir Electrical Co Pty Ltd v Commissioner of State Revenue
[2001] VSCA 86 and The Muir Electrical Co Pty Ltd v The
Commissioner of State Revenue (No 2) (No. 7634 of 2001),
which adversely impacted on the effectiveness of the pay-roll tax
and WorkCover grouping provisions in some circumstances.
Proposed sub-section (1) provides for four types of arrangements
for determining whether an employer and related persons or
associates in relation to that employer constitute a group and each
is a member of that group. Paragraph (a) provides that if an
employer that is a body corporate and another body corporate are
related to each other because of section 50 of the Corporations
Act, then they constitute a group. Paragraphs (b), (c) and (d)
clarify that the reference to "a business" in the section was
intended to include "one or more businesses" and that such
arrangements constitute a group in a range of circumstances
where the duties of a worker in an employer's business are
essentially in connection with the carrying on of another business
or businesses.
The amendment also specifically clarifies that section 66(1)(d)
is to apply irrespective of whether the duties performed for the
employer by the workers for or in connection with the business
or businesses of the associates are specified in the relevant
agreement, arrangement or undertaking. This is in response
to the finding by the Court of Appeal in Muir Electrical Co Pty
Ltd v Commissioner of State Revenue [2001] VSCA 86 that
paragraph (d) would not apply where there was an agreement for
the provision of services which did not specify that the duties
were to be carried on by the employer's workers.
The original intent of section 9A(1A)(d) of the Pay-roll Tax
Act 1971 (which is the equivalent provision to the proposed
section 66(1)(d) in the Accident Compensation (WorkCover
Insurance) Act 1993) was that it would apply to determine a
group existed under many different arrangements, including
where the duties an employee performed for their employer were
in connection with the company or the business of another
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employer. These would remain a group constituted by an
employer and persons who are associates of that employer where
there was a sufficient degree of dependence and connection
between businesses.
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The discretion contained in the new section 66(8) allows the
Authority to exclude a member from a group for the purposes of
the Accident Compensation (WorkCover Insurance) Act 1993
if the Authority is satisfied as to all of the circumstances set out
in that sub-section. The new section 66(1)(d) clarifies that
original intention.
Proposed sub-section (2) provides that the grouping provisions
apply if the same person or persons have together a controlling
interest under sub-section (3) in each of two businesses.
Proposed sub-section (3) provides that, for the purposes of
sub-section (2), the same person or persons have together a
controlling interest in each of two businesses if that person or
persons have together a controlling interest under any of the
arrangements in paragraphs (a) to (f).
Proposed sub-section (4) provides that a person who may benefit
as the result of the exercise of a power or discretion by the trustee
of a discretionary trust or by any other person or by that trustee
and other person, that person is deemed for the purposes of the
Accident Compensation (WorkCover Insurance) Act 1993 to
be a beneficiary in respect of 50% or more of the value of the
interests in that trust.
Proposed sub-section (5) provides that if a body corporate has a
controlling interest in a business under sub-section (3), it is
deemed, for the purposes of sub-section (3) to have a controlling
interesting in any other business in which another body
corporate, that is related to it because of section 50 of the
Corporations Act, has a controlling interest.
Proposed sub-section (6) provides that if a person or persons
have together a controlling interest under sub-section (3) in a
business and they have a controlling interest in another business,
the first person or persons are deemed, for the purposes of sub-
section (3), to have a controlling interest in the latter business.
Proposed sub-section (7) provides that if a person or persons are
beneficiaries under a trust in respect of 50% or more of the value
of the interests in that trust and the trustee or trustees have under
sub-section (3) a controlling interest in a business, that
beneficiary or beneficiaries are deemed, for the purposes of sub-
section (3), to have a controlling interest in that business.
6
Proposed sub-section (8) provides the Authority with a discretion
to exclude a member from a group if it is satisfied as to both of
two criteria, being that: (i) the business carried on by the member
is carried on independently of and (ii) is not connected with the
carrying on of the business of another member.
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Proposed sub-section (9) provides that the Authority must not
exclude a person from a group under sub-section (8) if the person
is a body corporate that is related to another body corporate that
is a member of that group because of section 50 of the
Corporations Act.
Proposed sub-section (10) deems certain persons to be members
of a group and an associate, subject to sub-section (11), for the
purposes of the new section. The provision subsumes groups with
common members into a single group. However, the Authority
may exclude a member from a subsumed group in sub-section
(10) if it is satisfied as to all the circumstances specified under
sub-section (11).
Proposed sub-section (11) provides that sub-section (10) does not
apply if a person satisfies the Authority that the business carried
on by that person is independent of and is not connected with the
carrying on of a business carried on by a member of the first
mentioned group and the business is not carried on with the
intention of reducing premium payable by that person or another
member of the subsumed group.
Proposed sub-section (12) defines "business" and "person" for
the purposes of this section.
Proposed sub-section (13) provides that this section applies
regardless of when an employer became a member of the group.
Proposed sub-section (14) provides that this section does not
affect the calculation of premium for any period before 1 July
2004.
Clause 13 inserts a new section 66A into the Accident Compensation
(WorkCover Insurance) Act 1993 to re-introduce a joint and
several liability provision for employers who are members of a
group as a means of strengthening the enforcement provisions of
the Act.
Proposed sub-section (1) provides that a person who, during a
period, is a member of a group within the meaning of section 66,
is jointly and severally liable for the premium and penalties
payable by the members of the group for that period.
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Proposed sub-section (2) clarifies that sub-section (1) applies
whether or not the person was an employer during the relevant
period and regardless of when the employer became a member of
the group.
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Proposed sub-section (3) provides that sub-section (1) does not
apply to a premium or penalty payable by the group before the
commencement of the new section.
Clause 14 repeals section 67 of the Accident Compensation (WorkCover
Insurance) Act 1993.
Clause 15 inserts a new sub-section (2) into section 77 of the Accident
Compensation (WorkCover Insurance) Act 1993 in order to
comply with the requirements of section 85 of the Constitution
Act 1975 as proposed new section 22A limits the rights of
employers to bring proceedings for the refund or recovery of
premium.
PART 4--AMENDMENT OF EMERGENCY SERVICES
SUPERANNUATION ACT 1986
Clause 16 amends section 20E of the Emergency Services
Superannuation Act 1986 to enable death benefits to be paid to
the estate of a contributor that was an operational staff member
aged between 55 and 60. The current wording of the Emergency
Services Superannuation Act 1986 does not provide a
legislative basis for the Board to make such payments, which is
not in line with policy intention.
Clause 17 inserts new section 22EA into the Emergency Services
Superannuation Act 1986 to provide that the Emergency
Services Superannuation Board, on the advice of an appointed
actuary, can determine the definition of accrued benefit multiple
(ABM) for family law purposes. This allows the Board to use a
scheme specific definition of ABM to value the interest of the
member spouse for the purpose of splitting superannuation
benefits on breakdown of marriage.
The default definition in section 65 of the Commonwealth Family
Law (Superannuation) Regulations is considered inappropriate,
as it may, in certain circumstances, result in an inequitable
division of benefits between the member spouse and non-member
spouse.
8
This will assist the Board in the effective administration of the
family law provisions contained in Part 4A of the Emergency
Services Superannuation Act 1986 (as inserted by the
Superannuation Acts (Family Law) Act 2003 as a consequence
of amendments to the Commonwealth's Family Law Act 1975).
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PART 5--AMENDMENT OF GOVERNMENT
SUPERANNUATION ACT 1999
Clause 18 inserts new sub-sections (9) to (15) into section 42 of the
Government Superannuation Act 1999.
Proposed sub-section (9) defines an "eligible salary sacrifice
contributor" for the purpose of the MTA Superannuation Fund,
as an employee in respect of whom a declaration is in force by
virtue of new section 42(10).
Proposed sub-section (10) provides that the Minister may declare
an employee, or a class of employees, to be an "eligible salary
sacrifice contributor(/s)" for the purpose of the MTA
Superannuation Fund, from the date specified in a notice
published in the Government Gazette.
Proposed sub-section (11) provides that an "eligible salary
sacrifice contributor" for the purpose of the MTA
Superannuation Fund, may elect in writing by notice to his/her
employer to make his/her member contributions by way of salary
sacrifice in accordance with the defined formula. The formula is
defined by reference to the applicable member contribution rate
(without salary sacrifice) in accordance with the governing
instrument of the MTA Superannuation Fund and the applicable
tax rate for the financial year on taxable contributions to the
MTA Superannuation Fund under the Commonwealth Income
Tax Assessment Act 1936. The resultant rate is required to be
calculated to the nearest highest 01%.
Proposed sub-section (12) provides that an election made under
section 42(11) can only be made if there is an agreement between
the employer and the member in force providing the employer
can make the member contributions required under the provisions
of the governing instrument of the MTA Superannuation Fund by
way of salary sacrifice. Further an election can only be made in
respect of the entire member contributions and cannot be made in
addition to the applicable member contributions under the
provisions of the governing instrument of the MTA
Superannuation Fund.
9
Proposed sub-section (13) provides that salary sacrifice
contributions made in accordance with section 42(11) are taken
to be the applicable member contributions to be paid under the
provisions of the governing instrument of the MTA
Superannuation Fund and the member contributions that
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would have been payable had an election not be made under
section 42(11).
Proposed sub-section (14) provides that an election made under
section 42(11) does not affect the superable salary of the
employee (who is a member of the MTA Superannuation Fund)
for the purposes of the provisions of the governing instrument of
the MTA Superannuation Fund.
Proposed sub-section (15) provides that the minimum benefit that
is required to be paid to ensure compliance with the
Commonwealth Superannuation Guarantee (Administration) Act
1992 is to be determined as if no election had been made under
section 42(11).
PART 6--AMENDMENT OF PROFESSIONAL STANDARDS
ACT 2003
Clause 19 amends section 5 of the Professional Standards Act 2003
by deleting the reference to breach of fiduciary duty in
section 5(1)(c). The effect of this amendment is that breach of
fiduciary duty by a professional will no longer be an exclusion
under the Act, i.e. limited liability under an approved scheme
will be available to a professional in this event.
PART 7--AMENDMENT OF STATE EMPLOYEES
RETIREMENT BENEFITS ACT 1979
Clause 20 inserts a new definition of "RSA" in section 2(1) of the State
Employees Retirement Benefits Act 1979 to mean a "retirement
savings account within the meaning of the Commonwealth
Retirement Savings Accounts Act 1997" and repeals the
definition of "RSA" from section 66AA(1). This means that the
definition of "RSA" will apply throughout the State Employees
Retirement Benefits Act 1979 rather than only in Part IVA--
Family Law Provisions.
Clause 20 also amends sections 34AB(3)(b), 37(1B)(b), and
38(2A)(b) of the State Employees Retirement Benefits Act
1979 to allow lump sums payable under these sections to be
transferred to either RSAs or complying superannuation funds,
as nominated by the member.
10
Clause 21 inserts a new definition of "eligible salary sacrifice
contributor" into section 2(1) of the State Employees
Retirement Benefits Act 1979 to mean a member of the State
Employees Retirement Benefits (SERB) Scheme in respect of
whom a declaration is in force by virtue of section 2A.
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Clause 22 inserts new section 2A into the State Employees Retirement
Benefits Act 1979 to provide that the Minister may declare a
SERB Scheme member, or class of SERB Scheme members, to
be an "eligible salary sacrifice contributor(/s)" from the date
specified in a notice published in the Government Gazette.
Clause 23 inserts new sub-sections (2A) to (2D) into the State Employees
Retirement Benefits Act 1979.
Proposed sub-section (2A) provides that an "eligible salary
sacrifice contributor" of the SERB Scheme may elect in writing
by notice to his/her employer to make his/her member
contributions by way of salary sacrifice in accordance with the
defined formula. The formula is defined by reference to the
applicable member contribution rate (without salary sacrifice) for
the Fund under section 23(1) and the applicable tax rate for the
financial year on taxable contributions to the Fund under the
Commonwealth Income Tax Assessment Act 1936. The resultant
rate is required to be calculated to the nearest highest 01%.
Proposed sub-section (2B) provides that an election made under
section 23(2A) can only be made if there is an agreement
between the employer and the SERB Scheme member in force
providing the employer can make the member contributions
required under the State Employees Retirement Benefits Act
1979 by way of salary sacrifice. Further, an election can only be
made in respect of the entire member contributions and cannot be
made in addition to the required member contributions under
section 23(1).
Proposed sub-section (2C) provides that salary sacrifice
contributions made in accordance with section 23(2A) are taken
to be the required member contributions under the State
Employees Retirement Benefits Act 1979 and the member
contributions that would have been made had an election not be
made under section 23(2A).
Proposed sub-section (2D) provides that an election made under
section 23(2A) does not affect the superable salary of the SERB
Scheme member under the State Employees Retirement
Benefits Act 1979.
11
Clause 24 amends section 36 of the State Employees Retirement Benefits
Act 1979 to provide that a statement by a resigning member as to
whether or not they are resigning due to disability shall be made
in the "form approved by the Board", rather than in the
"prescribed form".
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This amendment removes the need for a Regulation to be made
when the Government Superannuation Office wishes to change
the form of such a statement. The Board can now approve such
a change of format.
Clause 25 repeals sections 37(3), 37(4) and 37(5) of the State Employees
Retirement Benefits Act 1979 as consequential amendments to
Clause 26. These sub-sections are redundant because of the
amendments made to section 65 of the State Employees
Retirement Benefits Act 1979.
Clause 26 substitutes section 65(2) and inserts sub-sections 65(3) to 65(11)
into the State Employees Retirement Benefits Act 1979.
These subsections set out revised procedures for calculating a
member's minimum benefit depending on their circumstances.
Proposed sub-section (2) sets out a formula to calculate the
amount to be paid to a member where the total of all benefits paid
or payable under the State Employees Retirement Benefits Act
1979 is less than the sum of their contributions plus interest plus
the "superannuation guarantee amount" as defined in sub-
section 65(10) of the State Employees Retirement Benefits Act
1979.
Proposed sub-section (3) states that the member's minimum
benefit entitlement is to be determined by the Government
Superannuation Office Board as at the date the member first
became entitled to a benefit under the State Employees
Retirement Benefits Act 1979. There are exceptions to this
section set out in sections 65(4) and 65(5).
Proposed sub-section (4) states that if a member or former
member becomes entitled to another benefit other than a
temporary benefit under section 54 after having returned to work
following a period as a disability pensioner under the State
Employees Retirement Benefits Act 1979, the minimum benefit
entitlement shall be calculated as at the date the member becomes
entitled to that other benefit.
Proposed sub-section (5) states that if a member or former
member entitled to a deferred benefit dies without leaving a
partner entitled to a pension under the State Employees
Retirement Benefits Act 1979, the member's legal personal
representative ( their estate) must receive (additional to any
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amount payable under sections 38(3)(b) or 38(3)(c) of the
State Employees Retirement Benefits Act 1979) the
"superannuation guarantee amount" as defined in
section 65(10).
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Proposed sub-section (6) gives the Government Superannuation
Office Board power to determine an amount paid or payable
under the State Employees Retirement Benefits Act 1979
according to a method determined by an actuary appointed by the
Board.
Proposed sub-section (7) enables the Government
Superannuation Office Board to determine that an amount
payable under section 65 of the State Employees Retirement
Benefits Act 1979 may be used to increase a pension payable to
or in respect of a member or former member. The Board must
obtain the advice of their appointed actuary before increasing the
pension.
Proposed sub-section (8) provides that any part of the
superannuation guarantee amount must be preserved in
accordance with the specified standards.
Proposed sub-section (9) provides for the adjustment of the
member's minimum benefit where a payment or transfer is made
to a non-member spouse for the purposes of the Commonwealth's
Family Law Act 1975 (whether under Part IVA of the State
Employees Retirement Benefits Act 1979 or otherwise).
The adjustment must be made according to a methodology
approved by the Minister on the advice of an actuary appointed
by the Government Superannuation Office Board.
Proposed sub-section (10) sets out a revised definition for the
"superannuation guarantee amount" to be used in section 65
of the State Employees Retirement Benefits Act 1979.
Proposed sub-section (11) provides that the "superannuation
guarantee amount" for the purpose of section 65(10) is to be
determined as if no election was made under section 23(2A).
Clause 27 inserts new section 70B into the State Employees Retirement
Benefits Act 1979 to allow the payment of benefits to third
parties where a member is considered by the Government
Superannuation Office Board to be incapable of managing
their own affairs, of unsound mind, or a represented person.
The Board is required to pay benefits to the member's guardian
or administrator, of if none, to a person nominated by the Board
for the benefit of the member and their dependants.
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PART 8--AMENDMENT OF STATE SUPERANNUATION
ACT 1988
Clause 28 inserts a new definition of "RSA" in section 3(1) of the State
Superannuation Act 1988 to mean a "retirement savings
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account within the meaning of the Commonwealth Retirement
Savings Accounts Act 1997" and repeals the definition of "RSA"
from section 59AA(1). This means that definition of "RSA" will
apply throughout the State Superannuation Act 1988 rather
than only in Part 7A--Family Law Provisions.
Clause 28 also amends sections 47(10)(b), 47(10A)(b), 58(4)(b),
61(8)(b), 61A(4)(b), 61A(5)(b), 69(4A)(b), 94(1E)(b) and
101(5)(b) of the State Superannuation Act 1988 to allow lump
sums payable under these sections to be transferred to either
RSAs or complying superannuation funds, in line with a
nomination made by the member, former member contributor or
beneficiary.
Clause 29 inserts a new definition of "eligible salary sacrifice
contributor" into section 3(1) of the State Superannuation Act
1988, to mean an officer in respect of whom a declaration is in
force by virtue of new section 3A.
Clause 30 inserts new section 3A in the State Superannuation Act 1988
to provide that the Minister may declare an officer (who is an
original, revised or new scheme member, or a member of the
Fund as a result of a transfer under section 94), or class of such
officers as "eligible salary sacrifice contributor(/s)" from the date
specified in a notice published in the Government Gazette.
Clause 31 inserts new sub-sections (3) to (6) into section 27 of the State
Superannuation Act 1988.
Proposed sub-section (3) provides that an "eligible salary
sacrifice contributor" who is an original scheme member, may
elect in writing by notice to the employing authority to make
his/her member contributions by way of salary sacrifice in
accordance with the defined formula. The formula is defined by
reference to the applicable member contribution rate (without
salary sacrifice) in accordance with the Superannuation Act
1958 and the applicable tax rate for the financial year on taxable
contributions to the Fund under the Commonwealth Income Tax
Assessment Act 1936. The resultant rate is required to be
calculated to the nearest highest 01%.
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Proposed sub-section (4) provides that an election made under
section 27(3) can only be made if there is an agreement between
the employing authority and the original scheme member in force
providing the employing authority can make the member
contributions required under this Act by way of salary sacrifice.
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Further, an election can only be made in respect of the entire
member contributions and cannot be made in addition to the
required member contributions under the Superannuation Act
1958.
Proposed sub-section (5) provides that salary sacrifice
contributions made in accordance with section 27(3) are taken to
be the required member contributions under the Superannuation
Act 1958 and the member contributions that would have been
made had an election not be made under section 27(3).
Proposed sub-section (6) provides that an election made under
section 27(3) does not affect the superable salary of the original
scheme member for the purposes of the Superannuation Act
1958.
Clause 32 amends section 28 of the State Superannuation Act 1988 by
substituting sub-section (1) and inserting new sub-sections (1A)
to (1D).
Proposed sub-section (1) provides the contributions that a revised
scheme member must make to the Fund.
Proposed sub-section (1A) provides that an "eligible salary
sacrifice contributor", who is a revised scheme member, may
elect in writing by notice to the employing authority to make
his/her member contributions by way of salary sacrifice in
accordance with the defined formula. The formula is defined by
reference to the applicable member contribution rate (without
salary sacrifice) in accordance with new section 28(1) and the
applicable tax rate for the financial year on taxable contributions
to the Fund under the Commonwealth Income Tax Assessment
Act 1936. The resultant rate is required to be calculated to the
nearest highest 01%.
Proposed sub-section (1B) provides that an election made under
section 28(1A) can only be made if there is an agreement
between the employing authority and the revised scheme member
in force providing the employing authority can make the member
contributions required under the State Superannuation Act
1988 by way of salary sacrifice. Further, an election can only be
made in respect of the entire member contributions and cannot be
made in addition to the required member contributions under
section 28(1).
15
Proposed sub-section (1C) provides that salary sacrifice
contributions made in accordance with section 28(1A) are taken
to be the required member contributions under the State
Superannuation Act 1988 and the member contributions
that would have been made had an election not be made under
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section 28(1A).
Proposed sub-section (1D) provides that an election made under
section 28(1A) does not affect the superable salary of the revised
scheme member under the State Superannuation Act 1988.
Clause 33 inserts new sub-sections (4A) to (4D) into section 50 of the State
Superannuation Act 1988.
Proposed sub-section (4A) provides that an "eligible salary
sacrifice contributor" who is a new scheme member, may elect
in writing by notice to the employing authority to make his/her
member contributions by way of salary sacrifice in accordance
with the defined formula. The formula is defined by reference to
the elected member contribution rate (without salary sacrifice) in
accordance with section 50(1) and the applicable tax rate for the
financial year on taxable contributions to the Fund under the
Commonwealth Income Tax Assessment Act 1936. The resultant
rate is required to be calculated to the nearest highest 01%.
Proposed sub-section (4B) provides that an election made under
section 50(4A) by a new scheme member, can only be made if
there is an agreement between the employing authority and the
new scheme member in force providing the employing authority
can make the member contributions required under the State
Superannuation Act 1988 by way of salary sacrifice. Further, an
election can only be made in respect of the entire member
contributions and cannot be made in addition to the required
member contributions under section 50(1).
Proposed sub-section (4C) provides that salary sacrifice
contributions made in accordance with section 50(4A) are taken
to be the member contributions elected to be paid under the State
Superannuation Act 1988 and the member contributions that
would have been made had an election not be made under
section 50(4A).
Proposed sub-section (4D) provides that an election made under
section 50(4A) does not affect the superable salary of the new
scheme member under the State Superannuation Act 1988.
16
Clause 34 repeals sections 61B and 61C of the State Superannuation
Act 1988. Section 61B is redundant due to the expiry of the
period in which revised scheme members could transfer to the
new scheme. Section 61C is redundant due to the shifting of the
table in section 61C(2) to the new section 28(1).
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Clause 35 amends section 71 of the State Superannuation Act 1988 to set
out revised procedures for calculating a member's minimum
benefit depending on their circumstances.
Proposed sub-section (1) states that the minimum benefit paid or
payable under the State Superannuation Act 1988 must not (for
the period during which the Commonwealth's Superannuation
Guarantee (Administration) Act 1992 applies) be less than the
sum of the member's contributions plus interest plus the
"superannuation guarantee amount" as defined in
section 71(11).
Proposed sub-section (2) sets out a formula to calculate the
amount to be paid to a member where the total of all benefits paid
or payable under the State Superannuation Act 1988 is less
than the sum of their contributions plus interest plus the
"superannuation guarantee amount" as defined in sub-section
71(11) of the State Superannuation Act 1988.
Proposed sub-section (3) states that the member's minimum
benefit entitlement is to be determined by the Government
Superannuation Office Board as at the date the member first
became entitled to a benefit under the State Superannuation
Act 1988. There are exceptions to this section set out in
sections 71(4), 71(5) and 71(6).
Proposed sub-section (4) states that if the member becomes
entitled to another benefit other than a temporary benefit under
section 83A after having returned to work following a period as a
disability pensioner under the State Superannuation Act 1988,
the minimum benefit entitlement shall be calculated as at the date
the member becomes entitled to that other benefit.
Proposed sub-section (5) states that if a member entitled to a
deferred benefit dies without leaving a partner, dependants or
other persons entitled to a pension or other benefit under the
State Superannuation Act 1988, the member's legal personal
representative (i.e. their estate) must receive the
"superannuation guarantee amount" as defined in sub-
section 71(11).
17
Proposed sub-section (6) compels the Government
Superannuation Office Board to pay an amount calculable in
accordance with section 71(1) of the State Superannuation
Act 1988 to the estate of a pensioner (other than a pensioner
under section 83A) who dies without leaving any dependants.
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The amount calculated under section 71(1) shall be determined
by the Board as at the date of death.
Proposed sub-section (7) gives the Government Superannuation
Office Board power to determine an amount paid or payable
under the State Superannuation Act 1988 to a member entitled
to a pension or deferred benefit (whether or not the pension or
deferred benefit is the member's entire benefit), according to a
method determined by an actuary appointed by the Board.
Proposed sub-section (8) enables the Government
Superannuation Office Board to determine that an amount
payable under section 71 of the State Superannuation Act 1988
may be used to increase a pension payable to or in respect of a
member or former member. The Board must obtain the advice
of their appointed actuary before increasing the pension.
Proposed sub-section (9) sets out preservation rules for any
superannuation guarantee amount the member may be entitled to.
Proposed sub-section (10) provides for the adjustment of the
member's minimum benefit where a payment or transfer is made
to a non-member spouse for the purposes of the Commonwealth
Family Law Act 1975 (whether under Part 7A of the State
Superannuation Act 1988 or otherwise). The adjustment must
be made according to a methodology approved by the Minister
on the advice of an actuary appointed by the Government
Superannuation Office Board.
Proposed sub-section (11) sets out a revised definition for the
"superannuation guarantee amount" to be used in section 71
of the State Superannuation Act 1988.
Proposed sub-section (12) provides that the "superannuation
guarantee amount" for the purpose of section 71(11) is to be
determined as if no election was made under section 27(3),
28(1A) or 50(4A).
Clause 36 amends section 76(2) of the State Superannuation Act 1988 to
compel employers to offer employment to disability pensioners
who are found fit for work. The position offered must have
comparable tenure to the position held by the pensioner prior to
their disability and have duties for which the pensioner is suited
by education, training or experience, or would be suited as a
result of retraining. This replaces the obligation on employers to
18
appoint disability pensioners found fit for work to the first
vacancy.
Clause 37 inserts a new section 81 into the State Superannuation Act
1988 to provide the Government Superannuation Office Board
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with the power to recover contributions or any other amount
payable to the Board under the State Superannuation Act 1988
as a civil debt due to the Board in any court of competent
jurisdiction. Recoverable amounts include overpayments made
by the Board.
Clause 38 inserts new sub-sections (6) to (10) into section 94 of the State
Superannuation Act 1988.
Proposed sub-section (6) provides that an "eligible salary
sacrifice contributor" who is a transferred member, may elect
in writing by notice to the employing authority to make his/her
member contributions by way of salary sacrifice in accordance
with the defined formula. The formula is defined by reference to
the applicable member contribution rate (without salary sacrifice)
in accordance with the governing instrument of the Melbourne
Water Corporation Employees' Superannuation Fund and the
applicable tax rate for the financial year on taxable contributions
to the Melbourne Water Corporation Employees' Superannuation
Fund under the Commonwealth Income Tax Assessment Act
1936. The resultant rate is required to be calculated to the nearest
highest 01%.
Proposed sub-section (7) provides that an election made under
section 94(6) by a transferred member can only be made if there
is an agreement between the employing authority and the
transferred member in force providing the employing authority
can make the member contributions required under the provisions
of the governing instrument of the Melbourne Water Corporation
Employees' Superannuation Fund and the applicable tax rate for
the financial year on taxable contributions by way of salary
sacrifice. Further, an election can only be made in respect of the
entire member contributions and cannot be made in addition to
the applicable member contributions under the provisions of the
governing instrument of the Melbourne Water Corporation
Employees' Superannuation Fund.
Proposed sub-section (8) provides that salary sacrifice
contributions made in accordance with section 94(6) are taken to
be the applicable member contributions to be paid under the
provisions of the governing instrument of the Melbourne Water
Corporation Employees' Superannuation Fund and the member
contributions that would have been payable had an election not
be made under section 94(6).
19
Proposed sub-section (9) provides that an election made under
section 94(6) does not affect the superable salary of the
transferred member under the provisions of the governing
instrument of the Melbourne Water Corporation Employees'
Superannuation Fund.
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Proposed sub-section (10) provides that the minimum benefit
required to be paid to ensure compliance with the
Commonwealth Superannuation Guarantee (Administration)
Act 1992 is to be determined as if no election was made under
section 94(6).
PART 9--AMENDMENT OF SUPERANNUATION
(PORTABILITY) ACT 1989
Clause 39 amends sections 5(2A)(b) and 7(7A)(b) of the Superannuation
(Portability) Act 1989 to allow lump sums payable under these
sections to be transferred to either "retirement savings accounts"
or complying superannuation funds, as the member nominates.
Clause 40 amends sections 7(6) and 7(7) of the Superannuation
(Portability) Act 1989 to refer to the "minimum retirement age
fixed in the governing instrument of the member's statutory
superannuation scheme" rather than a redundant reference to age
of retirement. This makes these sections consistent with the
terminology used in section 5(2)(a) of the Superannuation
(Portability) Act 1989.
PART 10--AMENDMENT OF TRANSPORT
SUPERANNUATION ACT 1988
Clause 41 inserts a new definition of "RSA" in section 3(1) of the
Transport Superannuation Act 1988 to mean a "retirement
savings account within the meaning of the Commonwealth
Retirement Savings Accounts Act 1997" and repeals the
definition of "RSA" from section 36AA(1). This means that
definition of "RSA" will apply throughout the Transport
Superannuation Act 1988 rather than only in Part IVA--Family
Law Provisions.
Clause 41 also amends sections 34A(3)(b) and 35(4A)(b) of the
Transport Superannuation Act 1988 to allow lump sums
payable under these sections to be transferred to either RSAs or
complying superannuation funds, as the member or person
nominates.
20
Clause 42 inserts a new definition of "eligible salary sacrifice
contributor" into section 3(1) of the Transport
Superannuation Act 1988 to mean a Transport Scheme
member in respect of whom a declaration is in force by virtue
of section 3A.
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Clause 43 inserts new section 3A in the Transport Superannuation Act
1988 to provide that the Minister may declare a Transport
Scheme member, or class of Transport Scheme members as
"eligible salary sacrifice contributor(/s)" from the date specified
in a notice published in the Government Gazette.
Clause 44 inserts new sub-sections (3A) to (3D) into section 28 of the
Transport Superannuation Act 1988.
Proposed sub-section (3A) provides that an "eligible salary
sacrifice contributor", who is a Transport Scheme member,
may elect in writing by notice to the employing authority to make
his/her member contributions by way of salary sacrifice in
accordance with the defined formula. The formula is defined by
reference to the elected member contribution rate (without salary
sacrifice) in accordance with section 28(1) and the applicable tax
rate for the financial year on taxable contributions to the Fund
under the Commonwealth Income Tax Assessment Act 1936.
The resultant rate is required to be calculated to the nearest
highest 01%.
Proposed sub-section (3B) provides that an election made under
section 28(3A) can only be made if there is an agreement
between the employing transport authority and the Transport
Scheme member in force providing the employing transport
authority can make the member contributions required under the
Transport Superannuation Act 1988 by way of salary sacrifice.
Further, an election can only be made in respect of the entire
member contributions and cannot be made in addition to the
required member contributions under section 28(1).
Proposed sub-section (3C) provides that salary sacrifice
contributions made in accordance with section 28(3A) are taken
to be member contributions elected to be paid under the
Transport Superannuation Act 1988 and the member
contributions that would have been made had an election not be
made under section 28(3A).
Proposed sub-section (3D) provides that an election made under
section 28(3A) does not affect the superable salary of the
Transport Scheme member under the Transport
Superannuation Act 1988.
21
Clause 45 amends section 35A of the Transport Superannuation Act
1988 to set out revised procedures for calculating a member's
minimum benefit depending on their circumstances.
Proposed sub-section (1) states that the minimum benefit paid or
Victorian Legislation Parliamentary Documents
payable under the Transport Superannuation Act 1988 must
not (for the period during which the Commonwealth
Superannuation Guarantee (Administration) Act 1992 applies)
be less than the sum of the member's contributions plus interest
plus the "superannuation guarantee amount" as defined in
section 35A(8).
Proposed sub-section (2) sets out a formula to calculate the
amount to be paid to a member where the total of all benefits paid
or payable under the Transport Superannuation Act 1988 is
less than their contributions plus interest plus the
"superannuation guarantee amount" as defined in sub-
section 35A(8) of the Transport Superannuation Act 1988.
Proposed sub-section (3) states that the member's minimum
benefit entitlement is to be determined by the Government
Superannuation Office Board as at the date the member first
became entitled to a benefit under the Transport
Superannuation Act 1988. An exception to this section is set
out in section 35A(4).
Proposed sub-section (4) states that if the member becomes
entitled to another benefit other than a temporary benefit under
section 32 after having returned to work following a period as a
disability pensioner under the Transport Superannuation Act
1988, the minimum benefit entitlement shall be calculated as at
the date the member becomes entitled to that other benefit.
Proposed sub-section (5) gives the Government Superannuation
Office Board power to determine an amount paid or payable
under the Transport Superannuation Act 1988 to a member
entitled to a pension or deferred benefit (whether or not the
pension or deferred benefit is the member's entire benefit),
according to a method determined by an actuary appointed by the
Board.
Proposed sub-section (6) provides that any "superannuation
guarantee amount" is required to be preserved in accordance
with the Specified Standards.
Proposed sub-section (7) provides for the adjustment of the
member's minimum benefit where a payment or transfer is made
to a non-member spouse for the purposes of the Commonwealth
Family Law Act 1975 (whether under Part 7A of the Transport
Superannuation Act 1988 or otherwise). The adjustment must
22
be made according to a methodology approved by the Minister
on the advice of an actuary appointed by the Government
Superannuation Office Board.
Proposed sub-section (8) sets out a revised definition for the
Victorian Legislation Parliamentary Documents
"superannuation guarantee amount" to be used in section 35A
of the Transport Superannuation Act 1988.
Proposed sub-section (9) provides that the "superannuation
guarantee amount" for the purpose of section 35A(8) is to be
determined as if no election was made under section 28(3A).
Clause 46 inserts a new section 49A into the Transport Superannuation
Act 1988 to provide the Government Superannuation Office
Board with the power to recover contributions or any other
amount payable to the Board under the Transport
Superannuation Act 1988 as a civil debt due to the Board in
any court of competent jurisdiction. Recoverable amounts
include overpayments made by the Board.
PART 11--AMENDMENT OF VICTORIAN MANAGED
INSURANCE AUTHORITY ACT 1996
Clause 47 amends section 3 of the Victorian Managed Insurance
Authority Act 1996 to insert definitions of "insurance
business" and "insurance services". These definitions are
consistent with definitions in the Commonwealth Insurance Act
1973.
Clause 48 amends section 7 of the Victorian Managed Insurance
Authority Act 1996 to provide explicitly that the Victorian
Managed Insurance Authority (VMIA) is empowered to
undertake insurance business and provide insurance and
insurance services.
Clause 49 inserts a new section 20A into the Victorian Managed
Insurance Authority Act 1996 that provides that VMIA may
raise or repay capital through surcharges or rebates on the
premiums that it charges its client bodies. The new section
further provides that the terms on which this is done must be
agreed by the Minister and the Treasurer after consultation with
VMIA, and that the Minister must have regard to VMIA's capital
requirements in determining such terms.
Clause 50 amends section 24 of the Victorian Managed Insurance
Authority Act 1996 to provide explicitly that VMIA is
empowered to decline to provide insurance sought by one of its
clients, but that the Minister may direct VMIA to provide such
insurance.
23
If VMIA declines to provide insurance sought by one of its
clients, and the Minister does not direct VMIA to so provide, that
client is able to seek insurance from a provider other than VMIA.
Clause 51 inserts a new section 25B into the Victorian Managed
Victorian Legislation Parliamentary Documents
Insurance Authority Act 1996 to remove any doubt that VMIA
and its clients may negotiate deductible and maximum loss
limitations on the value of insurance cover provided by VMIA to
its clients under any contracts or indemnities.
The new section further provides that the Minister may determine
levels of deductibles and maximum losses that are to apply to all
contracts or indemnities generally, or to specified categories of
risks or clients.
Clause 52 repeals a number of "spent" provisions of the Victorian
Managed Insurance Authority Act 1996 relating to the
incorporation into VMIA of certain former SIO business that was
retained by the State on the sale of SIO.
24