Small Superannuation Accounts Act 1995
PART 1
-
INTRODUCTION
SECTION 3
3
SIMPLIFIED EXPLANATION
The following is a simplified explanation of this Act:
•
The Australian Taxation Office administers a special account. Notional
accounts
are kept within the special account.
•
The account offers employees with small balances an opportunity to avoid the erosion of those balances by fees.
•
Employees may request that account balances be
transferred
to a nominated
superannuation fund
or
RSA
.
•
Except in special cases, employees will not have direct access to their account balances.
•
Interest
will be calculated on the daily balance of the account and credited to the account on a quarterly basis.
•
Interest is
exempt from income tax
.
•
If an account balance exceeds $1,200, interest will
only
be credited on the
first $1,200
of the balance. This is an incentive for employees to request that balances of more than $1,200 be transferred to a superannuation fund.
•
Under the
Income Tax Assessment Act 1936
, employers may get
income tax deductions
for deposits. There is an annual deduction limit of $1,200 per employee.
•
Under the
Superannuation Guarantee (Administration) Act 1992
, deposits made by an employer will be
treated as superannuation contributions
.
•
The accounts may also be credited with Government co-contributions payable under the
Superannuation (Government Co-contribution for Low Income Earners) Act 2003
. The rules for these deposits differ in some respects from those that apply to other deposits.
The following is a simplified explanation of this Act:
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