House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello MP)

Chapter 1 - Contributions rules

Outline of chapter

1.1 This chapter outlines minor additions made to the law to clarify or complement the operation of the contribution rules in the Tax Laws Amendment (Simplified Superannuation) Bill 2006 (main Bill), including the superannuation contribution deduction rules and the rules relating to the caps on superannuation contributions.

1.2 For example, it outlines transitional deduction arrangements for employers and individuals with substituted accounting periods, and the extension of transitional arrangements for exemptions from the non-concessional contributions cap for contributions related to personal injury payments and capital gains tax (CGT) events.

1.3 It also covers the repeal of the old superannuation contribution rules in the Income Tax Assessment Act 1936 (ITAA 1936). Updates to references to the repealed law in other Acts are also outlined.

Additions to the law created by the main Bill

Deductions for superannuation contributions

Employees engaged in research and development activities

1.4 This Bill inserts a new subsection 73B(20A) into the ITAA 1936 to make it clear that an eligible company is able to claim a tax deduction for superannuation contributions for employees engaged in research and development activities under section 73B rather than section 290-60* ^[F1] of the Income Tax Assessment Act 1997 (ITAA 1997). The conditions in section 290-60* (eg, the contribution is made to a complying superannuation fund) still apply to the contribution. A change is made to the note to subsection 290-60(1)* to clarify the deduction is provided for under section 73B and not merely increased by subsection 73B(14). [Schedule 1, items 74, 76 and 206, subsection 73B(1)(definition of 'contributions to superannuation funds'), subsection 73B(20A) of the ITAA 1936 and subsection 290-60(1)(Note) of the ITAA 1997]

Contributions for former employees

1.5 Section 290-85* of the ITAA 1997 ensures that employers are entitled to a deduction for superannuation contributions made on behalf of former employees in certain circumstances (ie, contributions to satisfy superannuation guarantee (SG) obligations and salary sacrifice contributions that relate to a period when the person was an employee). This section is amended to also provide that a superannuation contribution made on behalf of a former employee (made in lieu of salary or wages that relate to a period of service during which they were an employee) is tax deductible to the employer if made within two months of them ceasing employment. [Schedule 3, items 11 and 12, paragraphs 290-85(1)(b) and (c) of the ITAA 1997]

1.6 Currently, if a person (with an interest in the employer as described in section 290-90* of the ITAA 1997) makes a contribution on behalf of the former employee of the employer, a deduction will not be available under section 290-85*. This is because the person on whose behalf the contribution is made (the former employee) was never an employee of the person making the contribution. Section 290-85* of the ITAA 1997 is amended to ensure that a person who makes a contribution in respect of another person as described under section 290-90* may, in certain circumstances, claim a tax deduction for contributions made on behalf of these former employees. [Schedule 3, items 13 and 14, subsections 290-85(1A) and (3) of the ITAA 1997]

Example 1.1

John terminates employment with his employer, ABC Pty Ltd, on 28 December. ABC Pty Ltd pays John his final salary on 15 January and consequently there is an SG obligation on this final salary payment. XYZ Pty Ltd holds a 50 per cent shareholding in ABC Pty Ltd and makes a contribution to satisfy ABC Pty Ltd's SG obligation for John. The amendment to section 290-85* under this Bill would allow a tax deduction for a contribution made by XYZ Pty Ltd to satisfy ABC Pty Ltd's SG obligation for John even though he was never an employee of XYZ Pty Ltd.

Deduction not available for contribution of the CGT exempt amount

1.7 A deduction cannot be claimed for contributions made by those under age 55, which are attributable to a capital gain disregarded under the small business CGT retirement concession. This is consistent with the current law where the roll-over of an eligible termination payment (ETP) that consists of the CGT exempt amount is not eligible for a tax deduction. [Schedule 2, item 9, subsection 290-150(4) of the ITAA 1997]

Transfers from foreign superannuation schemes

1.8 In section 290-5* of the ITAA 1997, contributions excluded from attracting a tax deduction included a benefit transferred from an overseas superannuation fund.  However, this provision was inadvertently narrowed and excluded transfers from foreign superannuation schemes.  This amendment ensures that an amount transferred from a foreign superannuation scheme to an Australian superannuation fund is not a contribution eligible for a tax deduction under Division 290* of the ITAA 1997. [Schedule 1, item 205, section 290-5 of the ITAA 1997]

Personal contributions and the less than 10 per cent rule

1.9 Section 290-150* of the ITAA 1997 provides that a person may claim a tax deduction for a personal contribution if certain conditions are met. To clarify the provision and better reflect the policy intent, the words 'if applicable' are inserted so that it is clear the condition in section 290-160* of the ITAA 1997 will apply only where a person is involved in activities that result in them being treated as an employee for SG purposes. [Schedule 1, item 207, subsection 290-150(2 )]

Personal contributions and variation notices

1.10 An individual who wishes to claim a tax deduction for their superannuation contributions is required to notify the trustee or retirement savings account (RSA) provider in writing. Section 290-180* of the ITAA 1997 provides that this notice may be varied in certain circumstances. This amendment provides that a request to vary a notice is not effective if the person is no longer a member of the fund or holder of the RSA, the provider is no longer the holder of the contribution, or a pension has begun to be paid which includes the contribution covered by the request to vary the notice. This is consistent with the circumstances required for the original notice to be valid. [Schedule 3, item 15, subsection 290-180(3A) of the ITAA 1997]

Property transfers as contributions

1.11 A contribution mentioned in Part 3-30 of the ITAA 1997 can be, or include, a transfer of property. If the contribution is, or includes, a transfer of property, the amount of the contribution is the market value of the property, reduced by the value of any consideration given for the transfer of the property. The definition of 'market value' is contained in subsection 995-1(1) of the ITAA 1997. [Schedule 3, item 10, section 285-5 of the ITAA 1997]

Substituted accounting periods

1.12 Transitional arrangements have been put in place for deductions for superannuation contributions made by employers and individuals with substituted accounting periods for the 2006-07 income year which end before 1 July 2007. The transitional regime applies to the period that begins after the taxpayer's 2006-07 income year and ends just before 1 July 2007. Employer contributions made from 1 July 2007 will be fully deductible. These contributions, which have been claimed as a deduction, will generally be included in the concessional contributions cap in Subdivision 292-B* of the ITAA 1997.

1.13 The transitional arrangements allow deductions under sections 82AAC and 82AAT of the ITAA 1936 for contributions up to the aged-based limits that applied in the 2006-07 income year, with no indexation applied. [Schedule 3, item 45, section 290-15 of the Income Tax (Transitional Provisions) Act 1997]

Concessional contributions cap

Defined benefits interests and notional taxed contributions

1.14 Section 292-170* of the ITAA 1997 sets out the requirements for a trustee to determine the notional taxed contributions for a defined benefit interest. Subsection 292-170(6)*, as amended, deems the amount of notional taxed contributions to be equal to the concessional contributions cap if the person held the defined benefit interest on 5 September 2006 and the conditions in the regulations are met. [Schedule 3, items 21, 24 and 25, paragraph 292-170(6)(d) and subsection 292-170(7) of the ITAA 1997]

1.15 This treatment is extended to situations where the person held the defined benefit interest on 5 September 2006 and the entire value of the original interest is transferred to a successor fund, either directly or through a series of transfers, where the right to accrue future benefits in the successor fund is equivalent to those in the original fund and the conditions in the regulations are met. [Schedule 3, items 22 and 23, section 292-170 of the ITAA 1997]

Example 1.2

Sally held a defined benefit interest in Fund A on 5 September 2006 which is deemed to equal the concessional contributions cap. On 1 July 2008 this interest is transferred to Fund B where her right to accrue future benefits are equivalent to Fund A.

On 1 July 2010 the interest is then transferred to Fund C, which also provides equivalent rights to accrue future benefits as Fund B and satisfies any conditions in the regulations.

Sally's defined benefit interest will continue to be deemed to equal the concessional contributions cap.

Directed termination payments

1.16 To better reflect policy intent, the transitional measure that excludes directed termination payments from a person's concessional contributions cap to the extent they do not exceed a total of $1 million is amended, so that only the taxable component of each directed termination payment is counted towards the $1 million limit. [Schedule 1, items 262 to 264, section 292-25 of the Income Tax (Transitional Provisions) Act 1997]

1.17 A further transitional measure is included to exclude the tax-free component of directed termination payments from the concessional contributions cap.  [Schedule 1, item 261, subsection 292-25(1A) of the Income Tax (Transitional Provisions) Act 1997]

Reserves and allocated amounts

1.18 Trustees can maintain reserves and accept contributions that are placed into these reserves under section 115 of the Superannuation (Industry) Supervision Act 1993 . Regulations made for the purposes of subsection 292-25(3)* of the ITAA 1997 may specify that amounts allocated to a member of a fund are to be included in the concessional contributions cap. [Schedule 3, item 16, subsection 292-25(3) of the ITAA 1997]

Non-concessional contributions cap

Transitional arrangements for exemptions to the cap

1.19 Transitional arrangements are in place to enable people to claim exemptions from the non-concessional contributions cap in Subdivision 292-C* of the ITAA 1997. These arrangements apply to contributions related to personal injury payments and CGT events where the contribution satisfies the conditions other than being made within the specified time limit. An extension for making such contributions is provided until 30 June 2007. [Schedule 3, items 46 and 47, paragraphs 292-80(3)(ea) and 292-80(3)(fa) of the Income Tax (Transitional Provisions) Act 1997]

Example 1.3

Jane receives a settlement payment relating to a personal injury on 10 July 2006. Normally her contribution would have to be made within 90 days to be eligible for an exemption from the non-concessional contributions cap. However under the transitional provision she has until 30 June 2007 to contribute the payment into a superannuation fund.

Bob receives a settlement payment relating to a personal injury on 1 June 2007. He has 90 days to make a contribution into superannuation for which an exemption from the non-concessional contributions cap can be claimed. He is not required to make the contribution before 30 June 2007.

Directed termination payments

1.20 To better reflect policy intent, a further transitional measure is inserted to exclude the tax-free component of directed termination payments from the non-concessional contributions cap.  [Schedule 1, item 265, section 292-90 of the Income Tax (Transitional Provisions) Act 1997]

Reserves and allocated amounts

1.21 To avoid potential circumvention of the non-concessional contribution cap through the use of reserves, regulations made for the purposes of paragraph 292-90(4)(a)* may specify that amounts allocated to a member of a fund are to be included in the non-concessional contributions cap. [Schedule 3, items 17 and 18, paragraphs 292-90(1)(aa) and 292-90(4)(a) of the ITAA 1997]

Contributions not allowed as deductions are included in the cap

1.22 As an integrity measure, the definition of 'non-concessional contributions' has been amended to include contributions that are included in the assessable income of the superannuation provider in relation to the superannuation plan but for which a tax deduction is not allowed by the Commissioner of Taxation (Commissioner). This will mean that these contributions are not included in the concessional contributions cap (but will be included in the non-concessional contributions cap). [Schedule 3, item 18, paragraph 292-90(4)(b) of the ITAA 1997]

Example 1.4

Rebecca gives a notice to her fund indicating that she will claim her $50,000 personal contribution as a tax deduction.  However, the Commissioner denies the deduction as she does not satisfy the 10 per cent rule.  The amount will be counted towards her non-concessional contributions cap (and not her concessional contributions cap). 

Contributions made to non-complying superannuation funds are included in the cap

1.23 A superannuation fund's complying status is determined on a yearly basis. That is, a fund is either complying or non-complying for a whole income year. Contributions made to a non-complying fund, even if the member believed the fund to be complying at the time the contribution was made, are not counted towards the contributions caps in the year they are made. However, non-complying funds can, after appropriate rectifying actions, become complying funds. From this point, investment returns on assets invested while the fund was non-complying will benefit from the concessionally taxed superannuation environment.

1.24 Therefore, as an integrity measure, the definition of 'non-concessional contributions' is amended to include any contributions made to a non-complying fund in previous financial years when the fund becomes complying. This applies to the extent that those contributions were made on or after 10 May 2006 and have not previously been counted under the relevant section. [Schedule 3, item 18, paragraph 292-90(4)(c) of the ITAA 1997]

Example 1.5

A fund is non-complying in the 2009-10 income year.  It becomes complying in 2010-11. All contributions made on behalf of a member to that fund during the 2009-10 income year will be included in their non-concessional contributions cap in the 2010-11 income year. 

The same fund becomes non-complying again in 2014-15, before regaining complying status in 2016-17.  All contributions made to that fund during the period since the fund last lost its complying status (ie, contributions made in 2014-15 and 2015-16) will be included in the member's non-concessional contributions cap in the year the fund regains its complying status (ie, 2016-17).

Exemptions to the cap - amounts from the disposal of qualifying small business assets

1.25 The Tax Laws Amendment (2006 Measures No. 7) Bill 2006 which includes changes to the small business CGT provisions, was introduced on 7 December 2006. Those amendments are proposed to apply to CGT events happening in the 2006-07 income year and later income years. The changes include replacing the concepts of 'stakeholder's control percentage' (within the meaning of subsection 152-125(3)) and 'controlling individual' with the concepts of 'stakeholder's participation percentage' (within the meaning of subsection 152-125(2)) and 'significant individual'. As a result, provisions relating to exemptions to the cap are amended to take into account these changes in concepts. [Schedule 2, items 10 to 12, subsections 292-100(4) and (6) of the ITAA 1997]

1.26 Amendments are also made to ensure the timing rules for contributions made under the CGT cap operate as intended. [Schedule 3, items 19 and 20, paragraphs 292-100(2)(b) and 292-100(7)(b) of the ITAA 1997]

Release authorities

1.27 A person will be prohibited from giving a release authority to a non-complying superannuation provider. That is, a person may only give a release authority to a complying superannuation provider. A person must give a release authority relating to excess non-concessional contributions tax to a complying superannuation provider. This corrects an anomaly in the main Bill to ensure that the amounts released are from the concessional superannuation environment, in line with the Government's intention. [Schedule 3, items 27 to 32 and 48 to 50, sections 292-410 and 292-415 of the ITAA 1997, sections 292-80B and 292 -80C of the Income Tax (Transitional Provisions) Act 1997]

1.28 The Commissioner, however, is still able to present a release authority to a non-complying superannuation provider in order to have the monies released from the superannuation system. This is to circumvent practices that may exist to shelter monies from being compulsorily released. [Schedule 3, items 31 and 32, subparagraph 292-415(1)(c)(ii) and paragraph 292-415(2)(b) of the ITAA 1997]

Administration

Shortfall interest charge

1.29 A liability for the shortfall interest charge arises where an additional amount of excess contributions tax becomes payable as a result of an amended assessment. The date excess contributions tax is due and payable is detailed in section 292-385* of the ITAA 1997. [Schedule 1, items 386 to 391, Division 280, Schedule 1 to the TAA 1953]

General interest charge

1.30 A reference to section 292-390* of the ITAA 1997 (unpaid excess contributions tax) is included in the index of provisions that deal with the liability for the general interest charge. [Schedule 1, item 366, subsection 8AAB(5) of the TAA 1953]

1.31 A general interest charge accrues on unpaid excess contributions tax and/or shortfall interest charge amounts that remain unpaid after the due date. [Schedule 1, items 208 to 211, section 292-390 of the ITAA 1997]

Assessments and objections

1.32 The periods for objections against assessments and amended assessments has been aligned with the four year period for excess contributions tax assessments. [Schedule 3, items 61 and 62, section 14ZW of the TAA 1953]

1.33 The wording in the provision relating to amendments on review has been changed to align with the general income tax regime. [Schedule 3, item 26, paragraph 292-330(b) of the ITAA 1997]

Collection and recovery

1.34 References to section 292-385* of the ITAA 1997 (excess contributions tax) are included in the index of tax-related liabilities in the TAA 1953. [Schedule 1, item 384, subsection 250-10(2), Schedule 1 to the TAA 1953]

Consequential amendments

CGT small business retirement exemption

1.35 Under Subdivision 152-D of the ITAA 1997, an entity may choose to disregard a capital gain made on the disposal of active assets of a small business if they qualify for the small business retirement exemption. To qualify for the exemption, if the individual is less than age 55, an ETP that consists of the exempt capital gain (known as the 'CGT exempt amount') must be rolled over to superannuation. From age 55, the individual may choose to roll-over the ETP to a superannuation fund, commence an income stream or take it in cash.

1.36 With the removal of the concept of ETPs, including the ability to roll-over an ETP to superannuation, it is necessary to provide another mechanism for the CGT exempt amount to enter the superannuation system. The amendments contained in Schedule 2 to this Bill (except items 10 and 11) remove the references to rolling over an ETP in Subdivision 152-D and apply to CGT events happening in the 2007-08 income year and later income years. They do not change the effect of the policy and merely replace the ETP mechanism with a requirement that to qualify for the retirement exemption, the CGT exempt amount must be contributed as a personal contribution if less than age 55. [Schedule 2, item 12]

1.37 These amendments are subject to the enactment of amendments contained in the Tax Laws Amendment (2006 Measures No. 7) Bill 2006.

Individuals

1.38 To qualify for the retirement exemption the following conditions must be met if the individual is less than age 55 before making the choice:

•

the individual must contribute immediately an amount equal to the CGT exempt amount as mentioned in section 152-315 of the ITAA 1997 to a complying superannuation fund or RSA [Schedule 2, item 3, paragraphs 152-305(1)(b) and (c) of the ITAA 1997]; and

•

the individual cannot claim a tax deduction on the personal contribution of the CGT exempt amount. This is consistent with the current law where the roll-over of an ETP that consists of the CGT exempt amount is not eligible for a tax deduction [Schedule 2, item 9, paragraph 290-150(4)(a) of the ITAA 1997].

1.39 However, if the individual is aged at least 55, they may choose to contribute the CGT exempt amount as a personal contribution to superannuation. They may be eligible to claim a tax deduction on the personal contribution. This is consistent with the current law where an individual may choose to receive the ETP in cash, make a personal superannuation contribution and claim a tax deduction (if eligible). If a deduction is claimed, those contributions will be included in the concessional contributions cap.

1.40 As the concept of ETP is being removed from Subdivision 152-D, the provisions that referred to, or were dependent on, this concept are repealed. [Schedule 2, items 4 and 6, subsections 152-305(1)(Note 2) and 152-310(4) of the ITAA 1997]

Companies and trusts

1.41 Currently, the CGT exempt component of an ETP is received tax-free by the CGT concession stakeholder if within the reasonable benefit limits (RBLs). Therefore, for consistency, the payment of the CGT exempt amount by the company or trust is 'exempt income' in the hands of the CGT concession stakeholder. The exemption from tax is no longer subject to RBLs which are abolished in the main Bill. [Schedule 2, items 1, 5 and 6, section 11-15, paragraph 152-310(2)(a) and subsection 152-310(5) of the ITAA 1997]

1.42 If the CGT concession stakeholder is less than age 55 before receiving a payment of the CGT exempt amount, to qualify for the retirement exemption, the company or trust must make the payment to the CGT concession stakeholder by contributing it on their behalf to a complying superannuation fund or RSA. This contribution is not an employer contribution. It is treated as a personal contribution (ie, the amount is taken to have been received and contributed by the stakeholder, even though the funds are contributed directly from the company or trust to the fund or RSA). [Schedule 2, item 8, subsections 152-325(7) and (8) of the ITAA 1997]

1.43 If the CGT concession stakeholder is less than age 55 before the contribution is made the stakeholder cannot claim a tax deduction on the personal contribution of the CGT exempt amount. This is consistent with the current law where the roll-over of an ETP that consists of the CGT exempt amount is not eligible for a tax deduction. [Schedule 2, item 9, paragraph 290-150(4)(b) of the ITAA 1997]

1.44 If the payment is made to an employee of a company or trust, the payment must not be of a kind mentioned in section 82-135* of the ITAA 1997 (disregarding paragraph (fa) of that section). This includes a payment that is deemed to be a dividend. Therefore, a payment made by a company or trust to a CGT concession stakeholder who is or was an employee will not qualify for the retirement exemption if it is considered a deemed dividend under section 109 of the ITAA 1936. To ensure that payments made to ongoing employees are subject to section 109, in the same circumstances as provided for under the Tax Laws Amendment (2006 Measures No. 7) Bill 2006 amendments, the payment is deemed to be made in consequence of termination of employment. [Schedule 2, items 2, 7 and 8, paragraph 82-135(fa), subsections 152-325(3A) and (9) of the ITAA 1997]

1.45 For consistency with the treatment under the Tax Laws Amendment (2006 Measures No. 7) Bill 2006 amendments, a payment made to a stakeholder who is not an employee is not subject to the restriction mentioned in the previous paragraph. [Schedule 2, item 7, subsection 152-325(3A) of the ITAA 1997]

Government co-contribution

1.46 To attract a government co-contribution the relevant contribution must be made for the purpose of providing superannuation benefits for the person (even if the benefits are payable to a dependant after their death). The wording in this provision is altered for consistency with changes made to the deduction provisions for personal contributions in Division 290* of the ITAA 1997. The updated wording is not intended to modify the operation of the existing law. [Schedule 1, item 341, paragraph 7(1)(b) of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003]

1.47 In the main Bill, contributions excluded from attracting a co-contribution included a benefit transferred from an overseas superannuation fund.  However, this provision was inadvertently narrowed and excluded transfers from foreign superannuation schemes.  This amendment ensures that an amount transferred from a foreign superannuation scheme to an Australian superannuation fund will not be a contribution eligible for a co-contribution.  [Schedule 1, items 342 and 343, paragraph 7(1)(c) of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003]

1.48 The definitions of a 'constitutionally protected fund' and 'complying superannuation fund' in section 56 of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 are updated to refer to the definitions now contained in the Dictionary in the ITAA 1997. [Schedule 1, items 344 and 345, subsection 995-1(1) of the ITAA 1997]

Income tax deduction rules

Deductions not allowed for payments of the tax

1.49 Payments of excess contributions taxes by taxpayers are not allowed as a tax deduction. [Schedule 1, item 179, section 26-75 of the ITAA 1997]

Deductions for financing costs on loans to pay superannuation contributions or life insurance premiums

1.50 Deductions for financing costs connected with a contribution can only be claimed if a deduction can be claimed for the contribution under Subdivision 290-B*. [Schedule 1, item 179, section 26-80 of the ITAA 1997]

1.51 Deductions for interest and expenses associated with money borrowed to pay life insurance premiums can only be claimed if the risk component of the premium received by the insurer is the entire amount of the premium and amounts the insurer is liable to pay under the policy would be included in the person's assessable income if paid. [Schedule 1, item 179, section 26-85 of the ITAA 1997]

1.52 The wording in these provisions has been altered to improve readability. This rewording is not intended to modify the operation of the existing law.

Repeal of old law

1.53 This Bill repeals Subdivisions AA and AB of Division 3 of Part III of the ITAA 1936 and sections 26-75, 26-80 and 26-85 of the ITAA 1997 which are rewritten into Division 290* of the ITAA 1997. These provisions prescribe the rules for claiming deductions for superannuation contributions made in the 2006-07 income year or earlier years. [Schedule 1, items 5 and 179, Subdivisions AA and AB of the ITAA 1936 and sections 26-75, 26-80 and 26-85 of the ITAA 1997]

Example 1.6: Notices for personal contributions

If individuals want to claim deductions for personal contributions made before the 2007-08 income year, they need to lodge the notice under the former sections (subsections 82AAT(1A) and (1CB) of the ITAA 1936). This applies even if the notices are given to the trustee of the fund or RSA provider in the 2007-08 income year or later years. The conditions under the former section 82AAT of the ITAA 1936 for notices on contributions made before the 2007-08 income year continue to apply. Similarly, this also applies to variation notices.

1.54 This Bill also repeals Subdivision AACA of Division 17 of Part III of the ITAA 1936 which are rewritten into Division 290* of the ITAA 1997. This Subdivision prescribes the rebate for superannuation contributions made on behalf of a spouse in the 2006-07 income year or earlier years. [Schedule 1, item 7, Subdivision AACA]

1.55 This Bill also repeals section 67AAA of the ITAA 1936 and rewrites it into Division 26 of the ITAA 1997. The wording in this provision has been altered to improve readability but is not intended to modify the operation of the existing law. In addition, the terms 'financing cost' and 'risk component' used in the rewritten provisions are defined in the dictionary in the ITAA 1997. [Schedule 1, items 71, 253 and 256, section 67AAA of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997]

Updates to cross-references to old law

1.56 Many provisions still operative in the Tax Acts, the Social Security Act 1991 and Veterans' Entitlements Act 1986  refer to provisions repealed by this Bill. As these repealed provisions have been rewritten in the ITAA 1997, this Bill amends the cross-references with reference to the new provisions. [Schedule 1, items 48 to 50, 74, 76, 77, 78, 123, 142, 143, 156, 163, 164, 166, 167, 168, 173, 177, 178, 186, 325, 326, 340, 381, 383, 402 and 403, subsections 24AYA(1), (3) and (7), 73B(1) and (20A), section 90 (definition of 'net income' and 'partnership loss'), subsection 262A(4A), subsections 57-40(1) and 57-50(1) in Schedule 2D to the ITAA 1936, sections 10-5, 12-5, 13-1 and 20-5, paragraphs 26-55(1)(d), 85-10(2)(f) and 85-10(2)(f)(Note) of the ITAA 1997, paragraph 1075(1)(c) and subparagraph 1185Y(3)(d)(iii) of the Social Security Act 1991, subsection 5(2) of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003, section 45-340 in Schedule 1 (method statement, step 1, paragraph (g )) and section 45-375 in Schedule 1 (method statement, step 1, paragraph (f)) of the TAA 1953 and paragraph 46C(1)(c) and subparagraph 49Y(3)(f)(iii) of the Veterans' Entitlements Act 1986]

Application

1.57 The amendments outlined in this chapter apply to the 2007-08 and later income years, except for the amendments that relate to the contributions caps which apply from the 2007-08 financial year. This is intended to preserve the operation of repealed provisions outlined in this chapter for the 2006-07 and previous income years. [Schedule 1, item 406; Schedule 2, item 12; Schedule 3, item 66]

1.58 The amendments replacing cross-references to the deduction provisions for the sugarcane farmers' relief schemes in the Social Security Act 1991 and the Veterans' Entitlements Act 1986 apply in relation to the 2007-08 financial year and later years. [Schedule 1, item 406]

Finding tables

1.59 The following finding tables will assist in comparing the new law contained in Division 290* of the ITAA 1997 with the current law contained in Subdivisions AA and AB of Division 3 and Subdivision AACA of Division 17 of Part III of the ITAA 1936 and Division 26 of the ITAA 1997.