House of Representatives
Superannuation (Objective) Bill 2016
Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016
Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016
Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon Scott Morrison MP and Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP)Glossary
The following abbreviations, acronyms and concepts are used throughout this explanatory memorandum.
| Abbreviation | Definition |
| Accumulation phase | The period during which a superannuation interest is not in the retirement phase |
| APRA | Australian Prudential Regulation Authority |
| ATO | Australian Taxation Office |
| AWOTE | Average Weekly Ordinary Time Earnings |
| Cap increment | A component of a child recipient's personal transfer balance cap |
| Capped defined benefit balance | The net amount of capital an individual has transferred to their superannuation retirement phase to support capped defined benefit income streams |
| Capped defined benefit income stream | Certain superannuation income streams that are subject to modifications |
| CGT | Capital gains tax |
| Child recipient | A child dependant that receives a death benefit income stream because of the death of a parent |
| Commissioner | Commissioner of Taxation |
| Commutation | The process of ceasing, in whole or in part, a superannuation income stream and converting it into a superannuation lump sum |
| Commutation authority | A notice the Commissioner issues to a superannuation income stream provider requiring the provider to commute an amount of a specified superannuation income stream. |
| CPI | The Consumer Price Index |
| Crystallised reduction amount | An individual's excess transfer balance that the Commissioner has determined is required to be removed from the retirement phase |
| Debit value | The residual component of a capped defined benefit income stream's special value |
| Deferred superannuation income stream | To be defined in related regulations. Includes guaranteed annuities and group self-annuities where a superannuation income stream benefit payment is delayed |
| Defined benefit income | Superannuation income stream benefits an individual receives from capped defined benefit income streams |
| Defined benefit income cap | The amount of superannuation income stream benefits an individual can receive from capped defined benefit income streams before being subject to additional income tax - $100,000 in 2017-18 (indexed in line with the general transfer balance cap). |
| Division 293 | Division 293 of the Income Tax Assessment Act 1997 |
| Excess transfer balance | The amount by which an individual's transfer balance exceeds their personal transfer balance cap on a particular day (unless the excess is attributable to the individual's capped defined benefit balance) |
| Excess transfer balance earnings | A notional amount in respect of an excess transfer balance for a particular day, generally credited to an individual's transfer balance account |
| Excess transfer balance period | A period during which an individual has an excess transfer balance |
| Excess transfer balance tax | Tax imposed on excess transfer balance earnings over an excess transfer balance period |
| First year cap space | The difference between the general transfer balance cap and an individual's total superannuation balance |
| General transfer balance cap | An amount of $1.6 million in 2017-18 and indexed to the CPI in $100,000 increments |
| IT(TP)A 1997 | Income Tax (Transitional Provisions) Act 1997 |
| ITAA 1936 | Income Tax Assessment Act 1936 |
| ITAA 1997 | Income Tax Assessment Act 1997 |
| ITAR 1997 | Income Tax Assessment Regulations 1997 |
| LISTO | Low Income Superannuation Tax Offset |
| Objective Bill | Superannuation (Objective) Bill 2016 |
| OBPR | Office of Best Practice Regulation |
| PAYG Withholding | Pay-As-You-Go Withholding |
| Personal transfer balance cap | The maximum amount of capital an individual can transfer to their superannuation retirement phase, indexed proportionally to the general transfer balance cap |
| Reversionary income stream | A superannuation income stream that automatically reverts to a nominated beneficiary on the death of its current recipient |
| RIS | Regulation Impact Statement |
| RP or Retirement phase | The period during which a superannuation income stream is currently payable, or, if it is a deferred superannuation income stream, when a person has met a relevant nil condition of release. A TRIS is never in the retirement phase. |
| RSA | Retirement Savings Account |
| RSAR 1997 | Retirement Savings Accounts Regulations 1997 |
| SISR 1994 | Superannuation Industry (Supervision) Regulations 1994 |
| SMSF | Self-managed superannuation fund |
| Special value | The modified value of a capped defined benefit income stream |
| SUMLMA | Superannuation (Unclaimed Money and Lost Members) Act 1999 |
| Superannuation death benefit | A superannuation lump sum, superannuation income stream or superannuation income stream benefit a person receives because of the death of another person |
| Superannuation income stream | Generally a right to receive periodic payments from a superannuation interest, for example a pension or annuity |
| Superannuation income stream benefit | Each individual payment an individual receives under a superannuation income stream |
| Superannuation lump sum | A benefit (other than a superannuation income stream benefit) an individual receives from a superannuation interest |
| Superannuation income stream provider | The trustee of a superannuation fund or approved deposit fund, a RSA provider or a life insurance company that provides a superannuation income stream to an individual |
| TAA 1953 | Taxation Administration Act 1953 |
| TLA Bill | Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 |
| Total superannuation balance | A method for valuing all of an individual's superannuation interests |
| Transfer balance or transfer balance account | The net amount of capital an individual has transferred to their superannuation retirement phase |
| Transfer balance cap | See general transfer balance cap and personal transfer balance cap |
| TRIS | Transition to retirement income stream (generally also includes transition to retirement income pensions, non-commutable allocated annuities and non-commutable allocated pensions) |