Taxation Laws Amendment (Superannuation) Act 1993

(7 of 1993)

An Act to amend the law relating to taxation

(Assented to 27 May 1993)

The Parliament of Australia enacts:

PART 1 PRELIMINARY

1 Short title

This Act may be cited as the Taxation Laws Amendment (Superannuation) Act 1993.

2 Commencement

(1) Subject to this section, this Act commences on the day on which it

receives the Royal Assent.

(2) The following provisions commence on 1 July 1994:

(a) Divisions 4 and 6 of Part 2;

(b) Division 2 of Part 3;

(3) Division 5 of Part 2 and section 7 commence immediately after the commencement of Division 4 of Part 2 of the Taxation Laws Amendment (Superannuation) Act 1992.

(4) Sections 47 and 48 commence on a day to be fixed by Proclamation.

(5) If sections 47 and 48 do not commence under subsection (4) within the period of 6 months beginning on the day on which this Act receives the RoyalAssent, they commence on the first day after the end of that period.

(6) Divisions 1 and 2 of Part 6 are taken to have commenced on 22 December 1992.

PART 2 AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 1 Principal Act

3 Principal Act

In this Part, "Principal Act" means the Income Tax Assessment Act

Division 2 Amendments of the definition of 'fixed interest complying ADF'

4 Fixed interest complying ADFs-exemption of income attributable to certain 25 May 1988 deposits

Section 290A of the Principal Act is amended:

(a) by omitting "either or both" from paragraph (a) of the definition of "fixed interest complying ADF" in subsecton (4) and substituting "any one or more";

(b) by inserting after subparagraph (a)(i) of the definition of "fixed interest complying ADF" in subsection (4) the following subparagraph:

"(ia) any profit arising on the disposal, redemption, cancellation or maturity of a security (within the meaning of Division 10);".

5 Application

The amendments made by this Division apply to assessments for the year of

income in which 1 July 1988 occurred and for all later years of income.

Division 3 Amendments relating to notification requirements for superannuation contributions

6 Deductions for superannuation contributions by eligible persons

Section 82AAT of the Principal Act is amended by omitting subsections (1) to (1D) (inclusive) and substituting the following subsections:

"(1) A person who has made a contribution to a fund during a year of income is entitled to an allowable deduction for the contribution in the person's assessment for the year of income if all the following conditions are met:

(a) the person is an eligible person in relation to the year of income;

(b) the person made the contribution in order to obtain superannuation benefits for the person or for dependants of the person in the event of the person's death;

(d) the person has given a notice under subsection (1A) in respect of the contribution and the trustee of the fund has acknowledged that notice under subsection (1A).

The deduction cannot be more than the amount covered by the notice under subsection (1A), and is also subject to the limits in subsection (2).

"(1A) A person who is making or has made a contribution to a fund may give a written notice to the trustee of the fund, stating that the person intends to claim a deduction under this section for the whole or a specified part of the contribution. The trustee must, without delay, give the person a notice acknowledging receipt of the person's notice.

"(1B) The following restrictions apply to notices under subsection (1A):

(a) a person cannot give a notice that covers the whole or any part of an amount covered by a previous notice;

(b) a person cannot give a notice to the trustee of a fund after the person has ceased to be a member of the fund;

"(1C) A person may at any time give written notice to the trustee of a fund reducing the amount covered by a notice under subsection (1A), but not below the amount that has been allowed as a deduction to the person under this section for contributions covered by the notice.

"(1D) Notices under this section must be given in the form and manner approved by the Commissioner in writing for the purposes of this section.

"(1E) A person is not entitled to a deduction under this section for a contribution unless the person receives the acknowledgment mentioned in subsection (1A) before the Commissioner makes the relevant assessment.

However, if the person later receives the acknowledgment, the Commissioner may amend the assessment to allow the deduction.".

7 Deductions for superannuation contributions by eligible persons

Section 82AAT of the Principal Act is amended by omitting paragraph

(2A)(a) and substituting the following paragraph:

"(a) by identifying the day in the year of income, or the last day in the year of income, on which the taxpayer made a contribution for which the taxpayer would be entitled to a deduction under this section (ignoring the notice requirements of paragraph (1)(d) and subsection (1A) and the limits in subsection (2)); and".

8 Interpretation

Section 267 of the Principal Act is amended by omitting from subsection (1) the definitions of "approved form", "approved manner" and "approved person".

9 Taxable contributions

Section 274 of the Principal Act is amended:

(a) by omitting from subsection (1) "are taxable contributions" and substituting "in a year of income ('the contribution year') are taxable contributions in relation to the contribution year";

(b) by omitting subparagraph (1)(b)(i) and substituting the following subparagraph:

"(i) a contribution of the kind mentioned in paragraph 82AAT(1)(b), to the extent to which the contribution:

(A) is covered by a notice under subsection 82AAT(1A) received by the trustee of the fund before the date on which the trustee lodges the return of income of the fund for the contribution year; and

(B) has not been rolled-over as mentioned in paragraph 27A(13)(a);";

"(2) Subject to this Division, if:

(a) in a year of income ('the notice year') the trustee of a fund receives a notice under subsection 82AAT(1A) in relation to contributions that were made to the fund during a year of income ('the contribution year') in relation to which the fund was a complying superannuation fund; and

(b) the trustee receives the notice after the date on which the trustee lodged the return of income of the fund for the contribution year;

the contributions, to the extent to which they are covered by the notice, are taxable contributions in relation to the notice year.".

10 Contribution notices or eligible person notices given after return lodgment date

Section 276 of the Principal Act is amended:

(a) by omitting subsections (1) and (3) and substituting the following subsections:

"(1) Subject to this section, if:

(a) in a year of income ('the notice year') the trustee of a fund receives a notice under subsection 82AAT(1C) in relation to contributions that were made to the fund in an earlier year of income ('the contribution year'); and

(b) the trustee receives the notice after the date on which the trustee lodged the return of income of the fund for the contribution year; and

(c) apart from this section and section 275, the assessable income of the fund of the contribution year would include an amount ('the clawback amount') that would not have been included if the trustee had received the notice before that date;

the clawback amount is allowable as a deduction from the assessable income of the fund of the notice year.

"(3) If the Commissioner is satisfied that it would be appropriate for the clawback amount not to be included in the assessable income of the fund of the contribution year:

(a) so much of the contribution as equals the clawback amount is taken for the purposes of this Part (other than this section) never to have been a taxable contribution; and

(b) the clawback amount is not allowable as a deduction under subsection (1).";

(b) by omitting from subsection (4) "The matters to which the Commissioner is to have regard are" and substituting "The Commissioner must have regard to the following matters in deciding whether to apply subsection (3)".

11 Application

The amendments made by this Division (other than section 7) apply to contributions made on or after 1 July 1992, other than such contributions made to a fund by a person who ceased to be a member of the fund before the date on which this Act received the Royal Assent.

Division 4 Amendments relating to ETP rules for death benefits

12 Interpretation

Section 27A of the Principal Act is amended:

(a) by omitting subparagraphs (aa)(ii), (ba)(ii) and (ca)(ii) of the definition of "eligible termination payment" in subsection (1);

(b) by inserting in subsection (1) the following definition:

"'death benefit ETP' means an ETP that is a death benefit within the meaning of section 27AAA;";

(d) by omitting subsection (12B) and substituting the following subsection:

"(12B) A death benefit ETP is not a qualifying eligible termination payment, in spite of anything in subsection (12).";

(e) by omitting from paragraph (12C)(a) "paragraph (g) or (h)" and substituting "paragraph (d), (g) or (h)".

13

After section 27A of the Principal Act the following section is inserted:

"27AAA. Special rules for death benefits

(Outline of section)

(1) This section:

(a) defines the types of payments that are treated as death benefits for the purpose of the rules providing for taxing of ETPs; and

(b) provides concessional treatment for death benefits that are paid in relation to dependants.

(Table of death benefits)

"(2) Table 1 sets out the payments that are death benefits for the purposes of this section. In applying the table, the dependant's concessions provided by this section are ignored in deciding whether a payment is covered by a particular ETP paragraph.

TABLE 1-DEATH BENEFITS

Item ETP When payment is a death benefit Dependant's

paragraph concession (if

any)

1 (a), (b), if the payment is made after the calculated

(c), (d), death of the taxpayer to the under

(e), (g) or trustee of the taxpayer's estate subsection (3)

(h)

2 (aa), (ba), always calculated

(ca), (db), under

(f), (gb) or subsection (4)

(j)

3 (da) or always calculated

(ga) under

subsection (3)

4 (d) or (g) if the payment is connected calculated

with a deceased person as under

described in subsection (6) subsection (4)

and is made within the period

specified in subsection (7)

(Dependant's concession for Items 1 and 3)

"(3) In the case of a death benefit covered by Item 1 or 3 in Table 1, the amount that would otherwise be an ETP in relation to the deceased taxpayer is to be reduced by such amount (if any) as the Commissioner considers appropriate having regard to the extent to which dependants of the deceased taxpayer may reasonably be expected to benefit from the estate. However, the ETP is not to be reduced to an amount less than the notional excessive component (if any) that applies to the death benefit under subsection (5).

(Dependant's concession for Items 2 and 4)

"(4) This subsection applies if a death benefit covered by Item 2 or 4 in Table 1 is paid to a taxpayer who was a dependant of the deceased person referred to in the relevant ETP paragraph, either at the time of the deceased person's death or at the time of payment of the death benefit. The amount that would otherwise be an ETP in relation to the taxpayer is not to exceed the notional excessive component (if any) that applies to the death benefit under subsection (5).

(Notional excessive component of a death benefit)

"(5) The notional excessive component of a death benefit is the amount that would be worked out under Division 14 as the excessive component of the death benefit if the whole of the death benefit were treated as an ETP for the purposes of that Division.

(Required link with deceased person for Item 4 death benefit)

"(6) In order to be covered by Item 4 in Table 1, the pension or annuity that was commuted as mentioned in ETP paragraph (d) or (g) must be a pension or annuity that:

(a) before it became payable to the taxpayer, was payable to another person who has died; or

(b) became payable to the taxpayer because of the death of another person.

(Period for paying Item 4 death benefit)

"(7) In order to be covered by Item 4 in Table 1, the payment must be made:

(a) within 6 months after the death of the deceased person mentioned in subsection (6); or

(b) within 3 months after the grant of probate of that deceased person's will or letters of administration of that deceased person's estate;

whichever is the longer period.

(Definitions)

"(8) In this section:

'ETP paragraph' means any of the paragraphs of the definition of 'eligible termination payment' in subsection 27A(1).".

14 Assessable income to include certain superannuation and similar payments

Section 27B of the Principal Act is amended:

(a) by inserting in subsection (1) "(other than a death benefit ETP)" after "an ETP";

(b) by inserting after subsection (1) the following subsection:

"(1A) If a death benefit ETP is made in relation to a taxpayer in relation to a year of income, the taxpayer's assessable income of the year of income includes:

(a) the taxed element of the retained amount of the post-June 83 component; and

(b) the untaxed element of the retained amount of the post-June 83 component.".

15 Interpretation

Section 159S of the Principal Act is amended:

(a) by inserting "or (1A)" after "27B(1)" in paragraph (c) of the definition of "eligible assessable income";

(b) by omitting the definitions of "golden handshake ETP", "life assurance company", "registered organization", "residual amount", "rolled-over", "s.27B(1) amount", "start date", "superannuation-related ETP", "Table 1" and "Table 2";

" 's.27B(1A)(a) amount' means an amount included in assessable income under paragraph 27B(1A)(a);

's.27B(1A)(b) amount' means an amount included in assessable income under paragraph 27B(1A)(b);".

16

Section 159SA of the Principal Act is repealed and the following section is substituted:

"159SA. Rebate to ensure upper limit on tax on eligible assessable income

(1) If the assessable income of the taxpayer of the current year of income includes any eligible assessable income, the taxpayer is entitled to a rebate of tax in the taxpayer's assessment of such amount (if any) as will ensure that the rate of tax on a rebatable amount specified in Table 1 will not be more than the corresponding rate of tax specified in that table.

TABLE 1-MAXIMUM RATES OF TAX ON ELIGIBLE ASSESSABLE INCOME

Item Class of eligible assessable income Corresponding Rates of

rebatable tax (%)

amount

1 current year's total of taxpayer's derived 20

s.27B(1)(a) amounts for non-age 55 ETPs low rate part 0

2 current year's total of taxpayer's

s.27B(1)(a) amounts for age 55 ETPs

3 current year's total of taxpayer's remaining part 15

s.27B(1)(a) amounts for age 55 ETPs

4 current year's total of taxpayer's derived 30

s.27B(1)(b) amounts for non-age 55 ETPs low rate part 15

5 current year's total of taxpayer's

s.27B(1)(b) amounts for age 55 ETPs

6 current year's total of taxpayer's remaining part 30

s.27B(1)(b) amounts for age 55 ETPs

7 current year's total of taxpayer's derived 15

s.27B(1A)(a) amounts

8 current year's total of taxpayer's derived 30

s.27B(1A)(b) amounts

9 current year's total of taxpayer's derived 30

eligible assessable income (excluding

amounts covered by Items 1 to 8)

"(2) The rebatable amount for a particular class of eligible assessable income in Table 1 is worked out as follows:

(a) the 'derived amount' is so much of the taxable part of the taxable income as is attributable to that class;

(b) subject to subsection (3), the 'low rate part' is so much of the derived amount for the class as does not exceed the residual amount under section 159SF for the current year;

(c) the 'remaining part' is so much of the derived amount for the class as is left over after deducting the low rate part.

"(3) The total of the low rate parts for the current year cannot be more than the residual amount under section 159SF for the current year.".

17 Repeal of sections 159SB, 159SC, 159SD and 159SE

Sections 159SB, 159SC, 159SD and 159SE of the Principal Act are repealed.

18 Upper limit for working out residual amount

Section 159SG of the Principal Act is amended by omitting paragraphs (1)(a) and (b).

19 Repeal of section 159SH

Section 159SH of the Principal Act is repealed.

20 Application

The amendments made by this Division apply to payments made on or after 1 July 1994.

Division 5 Amendments relating to RBL rules for death benefits

21

After section 140C of the Principal Act the following section is inserted:

"140CA. Deceased person's RBL to be used to calculate excessive component for death benefit ETPs

(1) This section applies in cases where (apart from this section) the recipient for a death benefit ETP ('the current ETP') is not the relevant deceased person for the ETP.

"(2) The current ETP is to be treated as being an ETP in relation to the relevant deceased person (and not in relation to the person who would be the recipient apart from this section) for the purpose of working out:

(a) the extent to which the current ETP has an excessive component; and

(b) the extent to which any other ETP in relation to the relevant deceased person, or any other person, has an excessive component.

"(3) In this section:

'death benefit ETP' means an ETP that is a death benefit within the meaning of section 27AAA;

'relevant deceased person' means:

(a) for a death benefit covered by Item 1 in Table 1 in section 27AAA-the taxpayer referred to in the applicable paragraph of the definition of 'eligible termination payment' in subsection 27A(1); or

(b) for a death benefit covered by Item 2 or 3 in Table 1 in section 27AAA-the deceased person referred to in the applicable paragraph of the definition of 'eligible termination payment' in subsection 27A(1); or

(c) for a death benefit covered by Item 4 in Table 1 in section 27AAA-the deceased person referred to in paragraph 27AAA(6)(a) or (b).".

22 Revision of final determinations

Section 140S of the Principal Act is amended by omitting subsection (2).

23 Benefits which are counted towards a person's RBLs

Section 140ZC of the Principal Act is amended by omitting paragraphs (2)(f) and (i).

24 Assessment of benefits against lump sum RBL

Section 140ZF of the Principal Act is amended by adding at the end the following subsection:

(Death benefit ETPs never to be assessed against lump sum RBL)

"(5) In spite of subsections (1), (2) and (3), the current benefit is not to be assessed against the recipient's lump sum RBL for the year of income if the current benefit is an ETP that is a death benefit within the meaning of section 27AAA.".

25 Application

The amendments made by this Division apply to payments made on or after 1 July 1994.

Division 6 Amendments relating to the tax treatment of the excessive component of ETPs

26 Notional income where assessable income includes consideration receivable on disposal, loss or destruction of depreciated property

Section 59AB of the Principal Act is amended by omitting from subsection (4) "any Act by which a rate of tax upon the taxable income of a taxpayer is fixed by reference to a notional income" and substituting "any Act that fixes a rate or rates of income tax by reference to a notional income".

27 Notional income of a taxpayer deriving a premium

Section 86 of the Principal Act is amended by omitting from subsection (1) "any Act whereby a rate of tax upon the taxable income of a taxpayer is fixed by reference to a notional income" and substituting "any Act that fixes a rate or rates of income tax by reference to a notional income".

28 Capital gains, abnormal income and ETP excessive component to be disregarded

Section 149A of the Principal Act is amended by inserting in paragraph (1)(a) and subparagraph (1)(b)(i) "and did not include any amount under subsection 27B(1A) or (3)" after "Part IIIA".

29 Application

The amendments made by this Division apply to assessments for the 1994-95 year of income and for all later years of income.

Division 7 Amendments to extend the meaning of annuities

30 Interpretation

Section 110 of the Principal Act is amended by inserting in subsection (1) the following definition:

" 'annuity' has the same meaning as in section 3 of the Occupational Superannuation Standards Act 1987;".

31 Interpretation

Section 116E of the Principal Act is amended by inserting in subsection (1) the following definition:

" 'annuity' has the same meaning as in section 3 of the Occupational Superannuation Standards Act 1987;".

32 Interpretation

Section 159GP of the Principal Act is amended by inserting in subsection (1) the following definition:

" 'annuity' has the same meaning as in section 3 of the Occupational Superannuation Standards Act 1987;".

33 Application

The amendments made by this Division apply to annuities purchased on or after 22 December 1992.

Division 8 Amendment of assessments

34 Amendment of assessments

Section 170 of the Principal Act does not prevent the amendment of an assessment made before the commencement of this section for the purpose of giving effect to this Act.

PART 3 AMENDMENT OF THE INCOME TAX RATES ACT 1986

Division 1 Principal Act

35 Principal Act

In this Part, "Principal Act" means the Income Tax Rates Act 1986.

Division 2 Amendments relating to the tax treatment of the excessive component of ETPs

36 Interpretation

Section 3 of the Principal Act is amended:

by omitting the definition of "special income component" in subsection (1) and substituting the following definition:

" 'special income component', in relation to a taxable income for which there is a capital gains amount or an abnormal income amount, means:

(a) so much of the taxable income as does not exceed the capital gains amount, the abnormal income amount or the sum of those amounts, as the case requires; or

(b) if the sum ('the component sum') of:

(i) the amount worked out under paragraph (a); and

(ii) the EC part of the taxable income;

is more than the taxable income-the amount worked out under paragraph (a), reduced by the amount by which the component sum exceeds the taxable income;";

(b) by inserting in subsection (1) the following definitions:

" 'EC part of the taxable income' means so much of the taxable income as does not exceed the excessive component included in assessable income under subsection 27B(3);

'ordinary taxable income' means the taxable income, reduced by the EC part of the taxable income;".

37 Schedule 7

Schedule 7 to the Principal Act is amended:

(a) by omitting from clause 1 of Part I "clauses 2 and 3, the rate of tax in respect of each part of the taxable income of a resident taxpayer specified in column 1 of the following table is the rate set out in column 2 of that table opposite to the reference to that part of the taxable income" and substituting:

"clauses 2 and 3, the rates of tax on the taxable income of a resident taxpayer are as follows:

(a) for the EC part of the taxable income-47%;

(b) for each part of the ordinary taxable income specified in column 1 of the following table-the corresponding rate set out in column 2 of the table:";

(b) by inserting in the table in clause 1 of Part I "ordinary" before "taxable income" (wherever occurring);

(c) by omitting paragraph (d) of the definition of component B in clause 2 of Part I and substituting the following paragraph:

"(d) the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income;";

(d) by adding at the end of clauses 2 and 3 of Part I:

"In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.";

(e) by omitting from clause 1 of Part II "clauses 2 and 3, the rate of tax in respect of each part of the taxable income of a non-resident taxpayer specified in column 1 of the following table is the rate set out in column 2 of that table opposite to the reference to that part of the taxable income" and substituting:

"clauses 2 and 3, the rates of tax on the taxable income of a non-resident taxpayer are as follows:

(a) for the EC part of the taxable income-47%;

(b) for each part of the ordinary taxable income specified in column 1 of the following table-the corresponding rate set out in column 2 of the table:";

(f) by inserting in the table in clause 1 of Part II "ordinary" before "taxable income" (wherever occurring);

(g) by omitting paragraph (d) of the definition of component B in clause 2 of Part II and substituting the following paragraph:

"(d) the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income;";

(h) by adding at the end of clauses 2 and 3 of Part II:

"In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.".

38 Schedule 8

Schedule 8 to the Principal Act is amended by inserting in subparagraph (2)(b)(ii) of Division 2 of Part I "ordinary" before "taxable" (wherever occurring).

39 Schedule 9

Schedule 9 to the Principal Act is amended:

(a) by omitting clause 1 of Part I and substituting the following clause:

"1. Subject to clause 2, the rates of tax on the taxable income of a resident taxpayer deriving a notional income as specified by section 59AB or 86 of the Assessment Act are as follows:

(a) for the EC part of the taxable income-47%;

(b) for every $1 of the ordinary taxable income-the amount worked out using the formula:

Tax at ordinary rates on non-EC notional income / Number of dollars in the non-EC notional income

where:

'Tax at ordinary rates on non-EC notional income' means the tax that would be payable under clause 1 of Part I of Schedule 7 on an ordinary taxable income equal to the non-EC notional income;

'Number of dollars in the non-EC notional income' means the number of whole dollars in the non-EC notional income;

In this clause, 'non-EC notional income' means the amount that would have been the notional income as specified by section 59AB or 86 of the Assessment Act if that notional income had been calculated by reference to ordinary taxable income instead of by reference to taxable income.";

(b) by adding at the end of clause 2 of Part I:

"In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.";

"1. Subject to clause 2, the rates of tax on the taxable income of a non-resident taxpayer deriving a notional income as specified by section 59AB or 86 of the Assessment Act are as follows:

(a) for the EC part of the taxable income-47%;

(b) for every $1 of the ordinary taxable income-the amount worked out using the formula:

Tax at ordinary rates on non-EC notional income / Number of dollars in the non-EC notional income

where:

'Tax at ordinary rates on non-EC notional income' means the tax that would be payable under clause 1 of Part II of Schedule 7 on an ordinary taxable income equal to the non-EC notional income;

'Number of dollars in the non-EC notional income' means the number of whole dollars in the non-EC notional income;

(d) by adding at the end of clause 2 of Part II:

"In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.".

40 Schedule 10

Schedule 10 to the Principal Act is amended by inserting in paragraph 2(b) of Part I "ordinary" before "taxable" (wherever occurring).

41 Schedule 11

Schedule 11 to the Principal Act is amended by adding at the end of clause 3 of Parts I and II:

"In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.".

42 Schedule 12

Schedule 12 to the Principal Act is amended by adding at the end of clause 3 of Parts I and II:

"In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.".

43 Application

The amendments made by this Division apply to assessments for the 1994-95 year of income and for all later years of income.

PART 4 AMENDMENT OF THE OCCUPATIONAL SUPERANNUATION STANDARDS ACT 1987

Division 1 Principal Act

44 Principal Act

In this Part, "Principal Act" means the Occupational Superannuation Standards Act 1987.

Division 2 Amendments relating to transferred retiree members of superannuation funds

45 Interpretation

Section 3 of the Principal Act is amended by omitting paragraph (b) of the definition of "transferred retiree member" in subsection (1) and substituting the following paragraphs:

"(b) at or after the member's retirement, an amount was paid to the trustees of the fund in respect of the member; and

"(c) assuming that the fund was a complying superannuation fund (within the meaning of Part IX of the Tax Act) in relation to the year of income of the fund in which the payment was made, the payment would have represented the roll-over of an eligible termination payment (within the meaning of section 27A of the Tax Act);".

46 Application

The amendments made by this Division apply in relation to amounts paid to the trustees of a fund after the commencement of this section.

Division 3 Amendments relating to the notification of breaches of superannuation fund conditions

47 Notices as to satisfaction of the superannuation fund conditions

Section 12 of the Principal Act is amended:

(a) by inserting in paragraph (3A)(a) "satisfied the following requirements" fter "trustee of the fund" (first occurring);

(b) by omitting subparagraph (3A)(a)(i) and substituting the following subparagraphs:

"(i) in any case-the trustee notified the breach to the Commissioner as soon as practicable after becoming aware of the breach;

(ia) if:

(A) the trustee's response to the breach is covered by regulations made for the purposes of this subparagraph; and

(B) the trustee is given a written notice under the regulations requesting the trustee to take all reasonable steps to notify the breach to all prescribed employer sponsors in relation to the fund; the trustee complied with the request;

(ib) if:

(A) the trustee's response to the breach is not covered by regulations made for the purposes of subparagraph (ia); and

(B) the trustee is not given a written waiver under the regulations from the requirements of this subparagraph;

the trustee took all reasonable steps to notify the breach to all prescribed employer sponsors in relation to the fund within the period specified in the regulations;";

by inserting in subparagraph (3A)(a)(ii) "in any case-the trustee" before "caused the breach".

48 Application

The amendments made by section 47 apply in relation to a breach of a superannuation fund condition as follows:

(a) if the breach continued over a period-the amendments apply to so much of the breach as occurred after the commencement of this section;

(b) in any other case-the amendments apply if the breach occurred after the commencement of this section.

49 Transitional

Subsection 12(3A) of the Principal Act applies, and is taken always to have applied, to a breach of a superannuation fund condition as follows:

(a) if the breach continued over a period-that subsection applies to so much of the breach as occurred after 30 June 1992;

(b) in any other case-that subsection applies if the breach occurred after 30 June 1992.

Division 4 Amendments relating to prospectuses

50 Interpretation

Section 3 of the Principal Act is amended by inserting after paragraph (d) of the definition of "reviewable decision" in subsection (1) the following paragraphs:

"(da) a decision of the Commissioner refusing to give an exemption under section 12A in relation to a fund;

(db) a decision of the Commissioner to vary or revoke an exemption under section 12A in relation to a fund;

(dc) a decision of the Commissioner refusing an application for the variation or revocation of an exemption under section 12A in relation to a fund;

(dd) a decision of the Commissioner to make a determination under section 12A in relation to a fund;

(de) a decision of the Commissioner to vary or revoke a determination under section 12A in relation to a fund;

(df) a decision of the Commissioner refusing an application for the variation or revocation of a determination under section 12A in relation to a fund;".

51

After section 12 of the Principal Act the following section is inserted:

"12A. Commissioner may modify application of standards relating to prospectuses

(1) This section applies to a standard prescribed under subsection 7(1), where the standard relates to prospectuses.

"(2) The Commissioner may, by written notice given to the trustee of a fund, exempt the fund from compliance with the standard.

"(3) The exemption may be made either generally or as otherwise provided in the exemption.

"(4) The exemption may be unconditional or subject to such conditions (if any) as are specified in the exemption.

"(5) If the Commissioner makes a decision refusing an application for an exemption, the Commissioner must give the applicant a written notice setting out the decision and giving the reasons for the decision.

"(6) The Commissioner may, by written notice given to the trustee of a fund, vary or revoke an exemption applicable to the fund.

"(7) If the Commissioner makes a decision to vary or revoke an exemption, the Commissioner mustgive the trustee of the fund concerned a written notice giving the reasons for the decision.

"(8) If the Commissioner makes a decision refusing an application for the variation or revocation of an exemption, the Commissioner must give the applicant a written notice giving the reasons for the decision.

"(9) The Commissioner may, by written notice given to the trustee of a fund, determine that the standard is to have effect, in its application in relation to the fund and in relation to a specified prospectus, as if it were modified in the manner specified in the determination.

"(10) The determination may have effect either generally or as otherwise specified in the determination.

"(11) If a determination is made, the standard has effect accordingly.

"(12) A notice of a determination must give the reasons for making the determination.

"(13) The Commissioner may, by written notice given to the trustee of a fund, vary or revoke a determination applicable to the fund.

"(14) If the Commissioner makes a decision to vary or revoke a determination, the Commissioner must give the trustee of the fund concerned a written notice giving the reasons for the decision.

"(15) If the Commissioner makes a decision refusing an application for the variation or revocation of a determination, the Commissioner must give the applicant a written notice giving the reasons for the decision.

"(16) An exemption given in response to an application made within 90 days after the commencement of this section may be expressed to have taken effect on a day that is:

(a) on or after 24 February 1993; and

(b) earlier than the day on which the notice of the exemption was given.

"(17) In this section:

'modification' includes addition, omission and substitution.".

52 Review of certain decisions

Section 16 of the Principal Act is amended by inserting in subsection

(1) "(da), (db), (dc), (dd), (de), (df)," after "(d),".

Division 5 Amendments relating to disclosure of information about superannuation funds

53 Secrecy

Section 18 of the Principal Act is amended by omitting subsection (2A) and substituting the following subsection:

"(2A) Subsection (2) does not prevent the Commissioner from disclosing any or all of the following information about a fund:

(a) whether or not the trustee of the fund has lodged a return under section 12 in respect of a particular year of income;

(b) whether or not a decision has been made by the Commissioner to give a notice, or a particular kind of notice, in relation to the fund under section 12 in respect of a particular year of income;

(c) whether or not a notice, or a particular kind of notice, has been given by the Commissioner under section 10, 12 or 13 in relation to the fund in respect of a particular year of income;

(d) whether or not the trustee of the fund has asked the Commissioner to give the trustee a notice under subsection 13(1) in respect of a particular year of income;

(e) whether or not the trustee of the fund has told the Commissioner that the trustee is willing to accept a particular kind of contribution;

(f) an address at which business relating to the fund may be transacted;

(g) such other information as is reasonably necessary to enable members of the public to contact a person who has a function in relation to the fund.".

Division 6 Amendments relating to notification requirements for ETP payers

54 Payers must provide certain information

Section 15G of the Principal Act is amended by omitting subsection (4) and substituting the following subsection:

"(4) A payer does not have to lodge a notice under subsection (1) for a payment that is less than or equal to the amount prescribed by the regulations for the purposes of this subsection. However, this exemption from lodgment does not apply to:

(a) a payment made out of an approved deposit fund; or

(b) a payment made by a life assurance company (otherwise than in the capacity of an employer) from a source other than a superannuation fund; or

55 Application

The amendment made by this Division applies to payments made on or after 24 December 1991.

PART 5 AMENDMENT OF THE SUPERANNUATION GUARANTEE (ADMINISTRATION) ACT 1992

Division 1 Principal Act

56 Principal Act

In this Part, "Principal Act" means the Superannuation Guarantee (Administration) Act 1992.

Division 2 Amendments relating to defined benefit superannuation schemes

57 Interpretation: general

Section 6 of the Principal Act is amended by omitting from subsection (1) the definition of "defined benefit superannuation scheme".

58

After section 6 of the Principal Act the following sections are inserted:

"6A. Interpretation: defined benefit superannuation scheme

(1) Subject to subsection (2), a defined benefit superannuation scheme is a scheme under which:

(a) one or more members of the scheme are entitled, on retirement, to be paid a benefit defined, wholly or in part, by reference to either or both of the following:

(i) the amount of the member's annual salary:

(A) at the date of the member's retirement; or

(B) at a date before retirement; or

(ii) a specified amount; and

(b) if the scheme is not a public sector scheme-some or all of the contributions under the scheme (out of which, together with earnings on those contributions, the benefits are to be paid) are not paid into a fund, or accumulated in a fund, in respect of any individual member but are paid into and accumulated in a fund in the form of an aggregate amount.

"(2) A scheme embodied in the governing rules of a superannuation fund (other than a scheme of the kind referred to in subsection (1)) is a defined benefit superannuation scheme if a conversion notice has effect in relation to the fund.

"(3) If the conversion notice is expressed to take effect on a day before the day on which the notice is given, the scheme in question is taken to have been a defined benefit superannuation scheme from the day on which the notice is expressed to take effect.

"(4) Subsection (3) has effect regardless of the making of any assessment, or the payment of any superannuation guarantee charge, in respect of a contribution period that ended after the conversion notice took effect.

"6B. Interpretation: conversion notice

(1) A conversion notice is a written notice by the trustee of a superannuation fund given to the Commissioner of Insurance and Superannuation stating that the fund is to be treated as a defined benefit superannuation scheme for the purposes of this Act.

"(2) Subject to subsection (4), a conversion notice takes effect in relation to the fund on the day specified in the notice. Subject to subsection (4), the trustee may, by written notice ('revocation notice') given to the Commissioner of Insurance and Superannuation, revoke the conversion notice.

"(3) A conversion notice may be expressed to take effect on a day (whether before or after the commencement of section 1 of the Taxation Laws Amendment (Superannuation) Act 1993) that is not earlier than:

(a) the first day of the year in which the notice is given; or

(b) if the notice is given before 15 August in that year-the first day of the preceding year.

"(4) A conversion notice or a revocation notice will not be effective unless, before it is given, the trustee gives all employers contributing to the fund for the benefit of employees written notice of:

(a) the trustee's intention to give the notice; and

(b) the proposed date of effect of the notice.

"(5) If an employer begins contributing to a superannuation fund for the benefit of employees at a time when a conversion notice has effect in relation to the fund, the trustee must give the employer written notice of:

(a) the giving of the conversion notice; and

(b) the date of effect of the notice;

within 30 days of the receipt by the trustee of the employer's first contribution.

"(6) A notice under this section may be given by post.".

59 Interpretation: benefit certificate

Section 10 of the Principal Act is amended by inserting after paragraph (3)(c) the following word and paragraph:

"or (d) in the case of a certificate that relates to a scheme that is a defined benefit superannuation scheme because of the operation of subsection 6A(2)-the conversion notice under section 6B is revoked;".

60 Reduction of charge percentage where contribution made to fund other than defined benefit superannuation scheme

Section 23 of the Principal Act is amended by inserting after subsection (8) the following subsection:

(Contribution made when conversion notice has effect not to be taken into account under this section)

"(8A) A contribution to a superannuation fund made by an employer for the benefit of an employee at a time when a conversion notice has effect in relation to the fund is not at any time to be taken into account under this section.".

61 Application

The amendments made by this Division apply for the purposes of assessments in respect of the 1992-93 financial year and of each later financial year.

PART 6 AMENDMENT OF THE TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1992

Division 1 Principal Act

62 Principal Act

In this Part, "Principal Act" means the Taxation Laws Amendment (Superannuation) Act 1992.

Division 2 Amendments relating to the meaning of annuities

63 Repeal of section 35

Section 35 of the Principal Act is repealed.

64 Application

The amendment made by this Division applies to annuities purchased on or after 22 December 1992.

Division 3 Amendments relating to the components of an ETP

65 Components of an ETP

Section 51 of the Principal Act is amended by omitting from paragraph (b) "ETP" (wherever occurring) and substituting "ETP-C".