Small Superannuation Accounts Act 1995

PART 1 - INTRODUCTION

SECTION 3

3 SIMPLIFIED EXPLANATION

The following is a simplified explanation of this Act:

• The Australian Taxation Office administers a special account. Notional accounts are kept within the special account.

• The account offers employees with small balances an opportunity to avoid the erosion of those balances by fees.

• Employees may request that account balances be transferred to a nominated superannuation fund or RSA .

• Except in special cases, employees will not have direct access to their account balances.

• Interest will be calculated on the daily balance of the account and credited to the account on a quarterly basis.

• Interest is exempt from income tax .

• If an account balance exceeds $1,200, interest will only be credited on the first $1,200 of the balance. This is an incentive for employees to request that balances of more than $1,200 be transferred to a superannuation fund.

• Under the Income Tax Assessment Act 1936 , employers may get income tax deductions for deposits. There is an annual deduction limit of $1,200 per employee.

• Under the Superannuation Guarantee (Administration) Act 1992 , deposits made by an employer will be treated as superannuation contributions .

• The accounts may also be credited with Government co-contributions payable under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 . The rules for these deposits differ in some respects from those that apply to other deposits.

View history note

History

S 3 amended by No 62 of 2014, s 3 and Sch 12 item 125, by substituting the first item, effective 1 July 2014. The first item formerly read:

• The Australian Taxation Office administers a Special Account. Notional accounts are kept within the Special Account. Employers may deposit money for their employees instead of making superannuation contributions. These deposits are credited to the notional accounts.

S 3 (simplified explanation) amended by No 8 of 2005, s 3 and Sch 1 items 318 and 319, by substituting the first item and " also be credited with " for " also be used to hold " in the final item, effective 22 February 2005.

The first item formerly read:

• The Australian Taxation Office has accounts that allow employers to deposit money for their employees instead of making superannuation contributions.

Act No 8 of 2005, s 4, contained the following savings provision for amendments (including this amendment) in Part 2 of its first Schedule:

Saving of matters in Part 2 of Schedule 1

(1) If:

(a) a decision or action is taken or another thing is made, given or done; and

(b) the thing is taken, made, given or done under a provision of a Part 2 Act that had effect immediately before the commencement of this Act;
then the thing has the corresponding effect, for the purposes of the Part 2 Act as amended by this Act, as if it had been taken, made, given or done under the Part 2 Act as so amended.

(2) In this section:

Part 2 Act
means an Act that is amended by an item in Part 2 of Schedule 1.

S 3 amended by No 111 of 2003, s 3 and Sch 1 item 10, by inserting the list item beginning with " The accounts may also be used " at the end, applicable in relation to contributions made to complying superannuation funds and RSAs on or after 1 July 2003.

S 3 amended by No 62 of 1997.

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