Explanatory Memorandum
(Circulated by the authority of the Treasurerthe Hon John Dawkins, M.P.)This Memorandum takes account of amendments made by the House of Representatives to the Bill as introduced.Chapter 16 AMENDMENT OF THE SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993
Overview
16.1 The amendment will enable a complying approved deposit fund to accept superannuation guarantee shortfall components [Clause 154] .
Summary of the proposed amendments
16.2 Purpose of amendment: To amend clause 10 of the Superannuation Industry (Supervision) Bill 1993 (the SIS Bill) to change the definition of "approved purposes" to include acceptance of payments of shortfall components prescribed in section 65 of the Superannuation Guarantee (Administration) Act 1992 (the SGAA).
16.3 Date of effect: On commencement of Part 3 of the SIS Bill, or the day after this Bill receives the Royal Assent, whichever is the later.
Background to the legislation
16.4 The SGAA prescribes a minimum level of superannuation support which employers should provide for each of their employees. Employers failing to comply with the prescribed minimum standard are subject to a superannuation guarantee charge based on the shortfall in their superannuation support plus an additional amount for an administrative charge and an amount as proxy for fund earnings.
16.5 An amount equal to the charge less the administrative charge is to be redistributed in the form of vouchers to those employees whose employers did not provide the prescribed minimum level of support. These vouchers are only payable into the account of the named employee held with a complying superannuation fund.
16.6 The majority of these vouchers are likely to be for small amounts. Some superannuation funds are not willing or able to accept vouchers. It has therefore been decided to ensure wider acceptance of the vouchers, or 'shortfall components' in terms of the SGAA, by allowing them to be deposited into complying approved deposit funds (ADFs).
Explanation of the proposed amendments
16.7 Clause 10 of the SIS Bill will be amended by omitting paragraph (a) of the definition of "Approved Purposes" and substituting a paragraph which continues the existing provisions as well as inserting a new provision to allow complying ADFs to accept superannuation guarantee shortfall components [Clause 155] .
16.8 These amendments are to apply to deposits made to a fund at or after the beginning of the fund's 1994-95 year of income [Clause 156] .
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
