Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016 (81 of 2016)

Schedule 4   Low income superannuation tax offset

Part 1   Low income superannuation tax offset

Superannuation (Government Co-contribution for Low Income Earners) Act 2003

2   After Part 2

Insert:

Part 2A - Low income superannuation tax offset

12B Reference to Government co-contribution includes reference to low income superannuation tax offset

(1) A law of the Commonwealth applies in relation to a low income superannuation tax offset in the same way as it applies in relation to a Government co-contribution.

(2) Subsection (1) does not apply to:

(a) the following provisions:

(i) Part 2 of this Act (other than section 12);

(ii) this Part;

(iii) section 23 of this Act;

(iv) section 54 of this Act; and

(b) any other law of the Commonwealth, to the extent that the other law relates to a provision mentioned in paragraph (a) of this subsection.

(3) Paragraph 14(1)(a) (Commissioner to have regard to income tax return) does not apply in deciding whether to make a determination under section 13 that a low income superannuation tax offset is payable under subsection 12C(2) in respect of a person for an income year.

(4) Subsections 24(3) and (4) have an operation in respect of low income superannuation tax offsets that is separate to their operation in respect of Government co-contributions.

12C Person entitled to low income superannuation tax offset

(1) A low income superannuation tax offset is payable under this subsection in respect of a person for an income year of the person if:

(a) the person's concessional contributions for the financial year that corresponds to the income year are for a financial year starting on or after 1 July 2017; and

(b) the person's adjusted taxable income for the income year (worked out in accordance with Schedule 3 to the A New Tax System (Family Assistance) Act 1999 (disregarding clauses 3 and 3A of that Schedule)) does not exceed $37,000; and

(c) the requirement in paragraph 6(1)(b) is satisfied in respect of the person in relation to the income year; and

(d) the requirement in paragraph 6(1)(f) is satisfied in respect of the person in relation to the income year.

(2) A low income superannuation tax offset is payable under this subsection in respect of a person for an income year of the person if:

(a) the person's concessional contributions for the financial year that corresponds to the income year are for a financial year starting on or after 1 July 2017; and

(b) 12 months after the end of the income year, the Commissioner reasonably believes there is insufficient information to decide whether to make a determination under section 13 that a low income superannuation tax offset is payable under subsection (1) in respect of the person for the income year; and

(c) the Commissioner estimates that:

(i) the person's adjusted taxable income for the income year (worked out in accordance with Schedule 3 to the A New Tax System (Family Assistance) Act 1999 (disregarding clauses 3 and 3A of that Schedule)) does not exceed $37,000; and

(ii) 10% or more of the person's total income for the income year (disregarding subsections 8(2) and (3)) is attributable to the person engaging in activities covered under subsection 6(2); and

(d) the requirement in paragraph 6(1)(f) is satisfied in respect of the person in relation to the income year.

(3) For the purposes of paragraph (1)(c), disregard the words "in which the person makes the contribution" in paragraph 6(2)(a).

(4) For the purposes of subparagraph (2)(c)(i), treat the person as having total deductions of $300 for the income year unless the Commissioner has information to the contrary.

(5) For the purposes of subparagraph (2)(c)(ii), disregard the words "in the income year in which the person makes the contribution" in paragraph 6(2)(a).

12E Amount of low income superannuation tax offset

(1) This section applies if a low income superannuation tax offset is payable under subsection 12C(1) or (2) in respect of a person for an income year.

(2) The amount of the person's low income superannuation tax offset for the income year is:

(a) unless paragraph (b) or (c) applies - 15% of the total of the person's concessional contributions for the financial year that corresponds to the income year; or

(b) if the amount worked out under paragraph (a) exceeds $500 - $500; or

(c) if the amount worked out under paragraph (a) is less than $10 - $10.

(3) For the purposes of paragraph (2)(a), disregard:

(a) contributions or amounts covered by paragraph 291-370(1)(a) of the Income Tax Assessment Act 1997 (about contributions or amounts in relation to constitutionally protected funds); and

(b) any other amounts covered by paragraph 291-165(1)(c) of that Act.

(4) If, apart from this subsection:

(a) there would be an underpaid amount as mentioned in section 19 in respect of the person's low income superannuation tax offset for the income year; and

(b) the underpaid amount would be less than $10;

decrease the amount of that low income superannuation tax offset by that underpaid amount.

(5) If, apart from this subsection:

(a) there would be an amount overpaid as mentioned in section 24 in respect of the person's low income superannuation tax offset for the income year; and

(b) the amount overpaid would be less than $10;

increase the amount of that low income superannuation tax offset by that amount overpaid.

12F Consequences if estimates no longer accurate

(1) Treat a low income superannuation tax offset as never having been payable under subsection 12C(2) in respect of a person for an income year if:

(a) the Commissioner obtains information after making the determination under section 13 that the tax offset was so payable; and

(b) the Commissioner decides that, had the Commissioner obtained that information before making the determination, the Commissioner would not have made the determination.

Note: The tax offset will be recoverable under section 24.

(2) The Commissioner must give the person written notice of the Commissioner's decision under paragraph (1)(b).

12G Reports on this Part

(1) After the end of each quarter the Commissioner must give the Minister a report, for presentation to the Parliament, on the working of this Part during the quarter. The report must include, for the quarter to which the report relates, the prescribed details about beneficiaries of, and amounts of, low income superannuation tax offsets.

(2) After the end of each financial year the Commissioner must give the Minister a report, for presentation to the Parliament, that:

(a) is on the working of this Part during the financial year; and

(b) includes, for the financial year to which the report relates, the prescribed details about beneficiaries of, and amounts of, low income superannuation tax offsets.