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SUPERANNUATION CONTRIBUTIONS TAX (APPLICATION TO THE COMMONWEALTH - REDUCTION OF BENEFITS) ACT 1997

SECTION 1  SHORT TITLE   1 

This Act may be cited as the Superannuation Contributions Tax (Application to the Commonwealth - Reduction of Benefits) Act 1997.

SECTION 2  COMMENCEMENT   2 

This Act commences on the day on which it receives the Royal Assent.

SECTION 3  INTERPRETATION   3 

Any expression that is used in this Act and in the Superannuation Contributions Tax (Assessment and Collection) Act 1997 has the same meaning as in that Act.

SECTION 4  TRUSTEE MAY REDUCE MEMBER'S BENEFITS ON ACCOUNT OF SURCHARGE  

4(1)  [Reduction by amount of surcharge]  
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If the liability of the trustee of an unfunded defined benefits superannuation scheme to pay the superannuation contributions surcharge that arose because of the operation of section 5 of the Superannuation Contributions Tax (Application to the Commonwealth) Act 1997 is discharged under section 7 of that Act, then, despite anything in any trust instrument, contract or other document or in any legislation, the trustee may reduce any benefits that become payable for the benefit of the member by such amount, subject to subsection (2A), as the trustee considers to be fair and reasonable having regard to the matters specified in subsection (3).

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4(2)  [Limits on application]  

However, subsection (1) does not apply if its application would or might result in a contravention of the Constitution.

4(2A)  [Amount of reduction]  
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The amount of the reduction under subsection (1) may not be more than the total of the following amounts:

(a)  15% of the employer-financed component of any part of the benefits payable to the member that accrued between 20 August 1996 and 1 July 2003;

(b)  14.5% of the employer-financed component of any part of the benefits payable to the member that accrued in the 2003-2004 financial year;

(c)  12.5% of the employer-financed component of any part of the benefits payable to the member that accrued in the 2004-2005 financial year;

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(d)  (Repealed by No 102 of 2005)

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4(3)  [Benefit reduction amounts]  
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In determining, for the purposes of subsection (1), the amount by which benefits that become payable for the benefit of a member are to be reduced, the trustee is to have regard to the following:

(a)  the amount by which the surcharge debt account kept by the trustee for the member is in debit when those benefits become payable;

(b)  the value of the employer-financed component of those benefits;

(c)  the value of the benefits that, for the purpose of working out (under the Superannuation Contributions Tax (Assessment and Collection) Act 1997) the notional surchargeable contributions factors applicable to the member, were assumed to be likely to be payable to the member on his or her becoming entitled to them;

(d)  whether the member has or had qualified for his or her maximum benefit entitlement under the scheme;

(e)  any other matter that the trustee considers relevant.

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