Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)General outline and financial impact
Amendment of the Small Superannuation Accounts Act 1995
Amends the Small Superannuation Accounts Act 1995 (SSAA 1995) to tighten the arrangements relating to the early release of monies held in the Superannuation Holding Accounts Reserve (SHAR) in a manner consistent with the arrangements that already apply to superannuation funds and retirement savings accounts (RSAs) by:
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- reducing from $500 to $200 the amount that can be withdrawn from SHAR on the ground that the individual has ceased employment;
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- restricting access to monies in SHAR on the ground that the individual is not an Australian resident, to cases where the individual has reached preservation age (currently age 55); and
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- replacing access to monies in SHAR on the ground of severe financial hardship with a new objective test based on whether the individual has received specified Commonwealth payments for a certain period.
Date of effect: The amendments apply to withdrawal requests (for the withdrawal of money from SHAR) given to the Commissioner of Taxation on or after Royal Assent of the Bill.
Proposal announced: The changes were originally announced in the 1997-98 Budget and modifications were announced by the Assistant Treasurer (Press Release AT/22) on 17 November 1997.
Financial impact: Negligible.
Compliance cost impact: None.
Non-arms length trust distributions etc. to superannuation and similar funds
Amends the Income Tax Assessment Act 1936 so that the special income of a complying superannuation fund, approved deposit fund (ADF) or pooled superannuation trust (PST) will include:
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- distributions from all trusts other than where the superannuation fund, ADF or PST has a fixed entitlement to income from that trust; and
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- non-arms length trust distributions of income where the superannuation fund, ADF or PST has a fixed entitlement to income from that trust.
Date of effect: Subject to a transitional arrangement, the amendments will apply to income derived after 2 pm by standard time in the Australian Capital Territory on 25 November 1997 (ie. the amendments will apply from the time of the Treasurers Press Release).
Proposal announced: Treasurers Press Release No. 123 of 25 November 1997.
Financial impact: Estimated revenue savings of $15 million per annum.
Compliance cost impact: Compliance costs are expected to be minimal as the measure will tighten an existing anti-tax avoidance measure.
Exemption of senior foreign executives from Superannuation Guarantee
Amends the Superannuation Guarantee (Administration) Regulations, to continue from 1 August 1996 an exemption from the Superannuation Guarantee (SG) for employers in respect of certain senior foreign executives who meet the criteria for the former class 413 overseas executive visa.
Date of effect: 1 August 1996.
Proposal announced: By the Assistant Treasurer on 25 June 1997 in Press Release No. AT/10.
Financial impact: Negligible.
Compliance cost impact: Compliance costs are expected to be minimal as the measure will reinstate a former SG exemption for employers.
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