Retirement Savings Accounts Amendment Regulations 2007 (No. 1) (104 of 2007)

Schedule 3   Amendments commencing on 1 July 2007

[52]   Regulation 5.03

substitute

5.03 Acceptance of contributions

(1) An RSA institution may accept contributions only in accordance with the following table and subregulations (2), (3), (4) and (6).

(2) In addition to subregulation (1), the RSA institution must not accept any RSA holder contributions if the RSA holder’s tax file number has not been quoted (for superannuation purposes) to the RSA provider.

(3) In addition to subregulation (1), the RSA institution must not accept any RSA-capped contributions in a financial year in respect of an RSA holder that exceed:

(a) if the RSA holder is 64 or less on 1 July of the financial year - 3 times the amount of the non-concessional contributions cap; or

(b) if the RSA holder is 65 but less than 75 on 1 July of the financial year - the non-concessional contributions cap.

(4) If an RSA institution receives an amount in a manner that is inconsistent with subregulation (1), (2) or (3):

(a) the RSA institution must return the amount to the RSA holder within 30 days of becoming aware that the amount was received in a manner that is inconsistent with subregulation (1), (2) or (3), unless:

(i) for an amount received in a manner that is inconsistent with subregulation (2) - the RSA holder’s tax file number is quoted (for superannuation purposes) within 30 days of the amount being received by the RSA institution; or

(ii) for an amount received in a manner that is inconsistent with subregulation (3) - a valid notice under section 290-170 of the 1997 Tax Act is received by the RSA institution within 30 days of the amount being received by the RSA institution; and

(b) the RSA institution is also authorised to take any of the following action to the extent that the rules of the RSA institution allow:

(i) if the price at which the interest could have been acquired on the day on which the amount is returned is less than the price on the day on which the interest was acquired, the amount that would otherwise be returned to the RSA holder may be reduced by the amount of the difference between the prices;

(ii) if the price at which the interest could have been acquired on the day of return of the amount is greater than the price on the day on which the interest was acquired, the amount that would otherwise be returned to the RSA holder may be increased by the amount of the difference between the prices;

(iii) if the price at which the interest could be acquired cannot be determined in accordance with the contract or legal relationship on the day on which the amount is returned, the price is to be determined:

(A) on the basis of the most recent day on which a price was calculated in accordance with the contract or legal relationship; or

(B) if there is no day of that kind - as soon as practicable after the decision is made to return the amount;

(iv) in addition to subparagraph (i), the amount that would, but for this subparagraph, be returned to the RSA holder may be reduced to account for reasonable administration costs and transaction costs, incurred by the RSA institution, that:

(A) are reasonably related to the acquisition of the interest and the return of the amount; and

(B) do not exceed the true cost of an arm’s length transaction;

other than costs related to commissions or similar benefits;

(v) if:

(A) the interest is a risk insurance interest, or the part of an interest that is a risk insurance interest; and

(B) the interest has been issued for a specific period, or the premium for the interest has been paid in relation to cover for a specific period; and

(C) a proportion of the specific period has already passed when the decision is made to return the amount to the RSA holder;

the amount that would otherwise be returned to the RSA holder may be reduced by the sum of:

(D) that part of any amount received in a manner inconsistent with subregulation (1), (2) or (3) as has been paid by the RSA institution to any person in connection with the risk insurance product and which is not recoverable by the RSA institution from that person; and

(E) the proportion equal to the proportion of the period that has passed of the difference between the amount that would otherwise be returned and the amount referred to in paragraph (a).

(5) If an RSA institution acts under subregulation (4), the RSA institution is taken not to have contravened the Act or these Regulations in relation to the acceptance of the amount or in relation to the return of the amount to the RSA holder.

(6) An RSA institution may accept contributions in respect of an RSA holder if the RSA institution is reasonably satisfied that the contribution is in respect of a period during which, under an item in the table in subregulation (1), the RSA institution may accept the contribution in respect of that RSA holder, even though the contribution is actually made after that period.

(7) In this regulation:

administration costs has the same meaning as in subregulation 5.01 (1).

employer contribution has the same meaning as in subregulation 1.03 (1).

mandated employer contributions has the same meaning as in subregulation 1.03 (1).

non-concessional contributions cap means the amount mentioned in subsection 292-85 (2) of the 1997 Tax Act.

quoted (for superannuation purposes) has the same meaning as in section 295-615 of the 1997 Tax Act.

RSA-capped contributions means the RSA holder contributions described in the definition of that expression in subregulation 1.03 (1), other than the following:

(a) a contribution to which a valid and acknowledged notice under section 290-170 of the 1997 Tax Act relates;

(b) a contribution that meets the requirements of paragraph 292-95 (1) (d) of the 1997 Tax Act;

(c) a contribution that meets the requirements of subsection 292-100 (9) of the 1997 Tax Act;

(d) a payment made by the Commissioner of Taxation under section 65 of the Superannuation Guarantee (Administration) Act 1992;

(e) a payment made by the Commissioner of Taxation under section 61 or 61A of the Small Superannuation Accounts Act 1995;

(f) a Government co-contribution made under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003;

(g) a contribution that is a directed termination payment within the meaning of section 82-10F of the Income Tax (Transitional Provisions) Act 1997.

RSA holder contributions has the same meaning as in subregulation 1.03 (1).

tax file number has the meaning given by section 16 of the Act.

transaction costs means any of the following:

(a) brokerage paid because of an investment transaction;

(b) a cost arising from maintenance of a property investment;

(c) stamp duty on an investment transaction.