Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Chapter 7 - Other amendments
Outline of chapter
7.1 Schedule 6 to this bill makes a number of technical amendments to correct legislative oversights arising from the Taxation Laws Amendment (Superannuation) Act (No. 1) 2002 (which enables superannuation to be paid to temporary residents who permanently depart Australia), the TLAA5 2001 (which provides for a CPF to change status to a taxed fund) and the Family Law Amendment Act 2001 (which ensures the appropriate tax treatment is applied to superannuation interests which may be split).
7.2 Schedule 6 to this bill also introduces an amendment to the Bankruptcy Act 1966 to ensure that the SGC and any related GIC have a priority in bankruptcy equal to that afforded to salary or wages.
Detailed explanation of new law
7.3 Subsection 16-170(3) of Schedule 1 to the TAA 1953 is amended to ensure that existing provisions allowing a withholding payment summary to consist of multiple statements covering different types of payments also apply in relation to payment summaries dealing with superannuation paid to temporary residents who have permanently departed Australia. [Schedule 6, items 10 and 11]
7.4 Subsection 16-175(1) of Schedule 1 to the TAA 1953 is amended to provide a penalty of 20 penalty units for entities that fail to meet obligations to provide payment summaries to recipients when making withholding payments under Subdivision 16-C of that Act. This same penalty previously applied under this subsection but was inadvertently omitted under previous legislation. The penalty will also apply for failure to provide a payment summary where superannuation is being paid to a temporary resident who has permanently departed Australia. [Schedule 6, items 12 to 14]
7.5 Drafting oversights have been identified in the TLAA5 2001 and the Family Law Amendment Act 2001. In particular, TLAA5 2001 failed to include a reference to subsection 15(6A) in subsection 15(7) of the CPF Act 1997. The subsection 15(6A) inserted by TLAA5 2001 covers the payment of surcharge where a CPF changes status to a taxed fund. In the absence of the reference in subsection 15(7), the Commissioner is not required to issue a notice of liability to the member. [Schedule 6, item 8]
7.6 In addition, the Family Law Amendment Act 2001 which has received Royal Assent but has not yet commenced also inserted a new subsection 15(6A) into the CPF Act 1997. The Family Law Amendment Act 2001 will be amended to change subsection 15(6A) to subsection 15(6AA) and to make the necessary cross reference changes. [Schedule 6, items 3 to 7]
7.7 The SGAA 1992 currently provides in section 52 for priority of the SGC in liquidation. An amendment will be made to insert a new provision into the Bankruptcy Act 1966 to ensure that the SGC (and any related GIC) has an appropriate priority in bankruptcy. [Schedule 6, item 1, subsection 109(1C)]
7.8 The SGC will have the same priority as unpaid salary or wages in bankruptcy administrations.
7.9 The SGAA 1992 will be amended to reflect the fact that rules are provided in the Bankruptcy Act 1966 for the treatment of outstanding SGC in bankruptcy. [Schedule 6, item 9, section 52]
Application and transitional provisions
7.10 Items 10 and 11 of Schedule 6 commences on the later of 1 July 2002 and Royal Assent. Items 12 to 14 of Schedule 6 commence on the later of 1 July 2002 and 28 days after Royal Assent.
7.11 Items 3 to 8 commence on Royal Assent.
7.12 Items 1, 2 and 9 will commence on the day that item 77 of the Bankruptcy Legislation Amendment Bill 2002 commences.
Consequential amendments
7.13 There are no consequential amendments relating to this measure.