Federal Register of Legislation - Australian Government

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A Bill for an Act to amend the law relating to superannuation, and for related purposes
Administered by: Treasury
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Registered 14 Sep 2017
Introduced HR 14 Sep 2017
Table of contents.

2016‑2017

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

 

 

Presented and read a first time

 

 

 

 

Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017

 

No.      , 2017

 

(Treasury)

 

 

 

A Bill for an Act to amend the law relating to superannuation, and for related purposes

  

  


Contents

1............ Short title............................................................................................. 1

2............ Commencement................................................................................... 1

3............ Schedules............................................................................................ 2

Schedule 1—Choice of fund for workplace determinations and enterprise agreements               3

Superannuation Guarantee (Administration) Act 1992                                      3

Schedule 2—Salary sacrifice integrity                                                                       5

Superannuation Guarantee (Administration) Act 1992                                      5

 

 


A Bill for an Act to amend the law relating to superannuation, and for related purposes

The Parliament of Australia enacts:

1  Short title

                   This Act is the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Act 2017.

2  Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1.  Sections 1 to 3 and anything in this Act not elsewhere covered by this table

The day this Act receives the Royal Assent.

 

2.  Schedules 1 and 2

The day after this Act receives the Royal Assent.

 

Note:          This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

             (2)  Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedules

                   Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1Choice of fund for workplace determinations and enterprise agreements

  

Superannuation Guarantee (Administration) Act 1992

1  Paragraph 19(2B)(c)

Omit “(which deals with certain cases where no contributions are required)”, substitute “(which deals with certain cases where defined benefit members cannot choose another fund)”.

2  Section 20 (heading)

Repeal the heading, substitute:

20  Defined benefit schemes—certain cases where members cannot choose another fund

3  Subsection 20(1)

Omit “either subsection (2) or (3) is satisfied”, substitute “subsection (2), (3) or (3A) is satisfied”.

4  After subsection 20(3)

Insert:

Member’s benefit not affected

          (3A)  This subsection is satisfied if the employee would be entitled, on the employee’s retirement, resignation or retrenchment, to the same amount of benefit from the defined benefit superannuation scheme, whether or not the employee had contributions:

                     (a)  for the quarter; and

                     (b)  made by the employer for the benefit of the employee;

to a fund (within the meaning of Part 3A) other than the defined benefit superannuation scheme.

5  Paragraph 32C(6)(g)

After “determination”, insert “made before 1 July 2018”.

6  Paragraph 32C(6)(h)

After “agreement”, insert “made before 1 July 2018”.

7  After subsection 32C(6)

Insert:

Contributions previously covered by paragraphs (6)(g) and (h)

       (6AA)  A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if:

                     (a)  at the time the contribution is made, there is no chosen fund for the employee; and

                     (b)  the fund is a fund to which the employer has previously made contributions, in compliance with the choice of fund requirements under paragraph (6)(g) or (h), for the benefit of the employee.

Schedule 2Salary sacrifice integrity

  

Superannuation Guarantee (Administration) Act 1992

1  Subsection 6(1)

Insert:

quarterly salary or wages base, for an employer in respect of an employee, for a quarter has the meaning given by subsection 19(1).

sacrificed contribution means a contribution to a complying superannuation fund or an RSA made under a salary sacrifice arrangement.

sacrificed ordinary time earnings amount has the meaning given by subsection 15A(2).

sacrificed salary or wages amount has the meaning given by subsection 15A(2).

salary sacrifice arrangement has the meaning given by subsection 15A(1).

2  At the end of Part 2

Add:

15A   Interpretation: salary sacrifice arrangements

Salary sacrifice arrangement

             (1)  An arrangement under which a contribution is, or is to be, made to a complying superannuation fund or an RSA by an employer for the benefit of an employee is a salary sacrifice arrangement if the employee agreed:

                     (a)  for the contribution to be made; and

                     (b)  in return, for either or both of the following amounts to be reduced (including to nil):

                              (i)  the ordinary time earnings of the employee;

                             (ii)  the salary or wages of the employee.

Sacrificed amounts

             (2)  If an amount mentioned in subparagraph (1)(b)(i) or (ii) is reduced under a salary sacrifice arrangement, the amount of that reduction is:

                     (a)  if ordinary time earnings for a quarter are reduced—a sacrificed ordinary time earnings amount of the employee for the quarter in respect of the employer; and

                     (b)  if salary or wages for a quarter are reduced—a sacrificed salary or wages amount of the employee for the quarter in respect of the employer.

Excluded salary or wages

             (3)  In working out the amount of a reduction for the purposes of subsection (2), disregard any amounts that, had they been paid to the employee (instead of being reduced), would have been excluded salary or wages.

             (4)  For the purposes of this section, excluded salary or wages are salary or wages that, under section 27 or 28, are not to be taken into account for the purpose of making a calculation under section 19.

3  Subsection 19(1) (formula)

Repeal the formula, substitute:

4  At the end of subsection 19(1)

Add:

quarterly salary or wages base, for an employer in respect of an employee, for a quarter means the sum of:

                     (a)  the total salary or wages paid by the employer to the employee for the quarter; and

                     (b)  any sacrificed salary or wages amounts of the employee for the quarter in respect of the employer.

5  Subsection 19(3)

Repeal the subsection, substitute:

             (3)  For the purposes of the definition of quarterly salary or wages base in subsection (1), disregard an amount in a quarter if:

                     (a)  the amount would be covered by paragraph (a) of that definition for the quarter (about amounts paid to the employee); but

                     (b)  the amount is taken into account under paragraph (b) of that definition (about sacrificed salary or wages amounts) for any quarter.

Note:          This prevents double counting if a sacrificed salary or wages amount is later paid as salary or wages, instead of being contributed to superannuation.

             (4)  If the quarterly salary or wages base, for an employer in respect of an employee, for a quarter exceeds the maximum contribution base for the quarter, the employer’s quarterly salary or wages base to be taken into account for the purposes of the application of subsection (1) in relation to the quarter is the amount equal to the maximum contribution base.

6  Subsection 23(2)

Omit “contributes”, substitute “makes a contribution (other than a sacrificed contribution)”.

7  Subsection 23(2) (formula)

Repeal the formula, substitute:

8  Subsection 23(2) (definition of ordinary time earnings)

Repeal the definition.

9  Subsection 23(2)

Insert:

ordinary time earnings base is the number of dollars in the sum of:

                     (a)  the ordinary time earnings of the employee for the quarter in respect of the employer; and

                     (b)  any sacrificed ordinary time earnings amounts, of the employee for the quarter in respect of the employer.

10  After subsection 23(7)

Insert:

Sacrificed ordinary time earnings amounts taken into account in a quarter not to be taken into account for any other quarter

          (7A)  For the purposes of the definition of ordinary time earnings base in subsection (2), disregard an amount in a quarter if:

                     (a)  the amount would be covered by paragraph (a) of that definition for the quarter (about ordinary time earnings of the employee); but

                     (b)  the amount is taken into account under paragraph (b) of that definition (about sacrificed ordinary time earnings amounts) for any quarter.

Note:          This prevents double counting if a sacrificed ordinary time earnings amount is later paid as ordinary time earnings, instead of being contributed to superannuation.

11  Subsection 23(12) (heading)

Repeal the heading, substitute:

Reduction of ordinary time earnings base if amount excluded from employee’s salary or wages

12  Subsection 23(12)

After “ordinary time earnings”, insert “base”.

13  Subsection 23(12)

Omit “are”, substitute “is”.

14  Subsection 23A(1)

After “A contribution”, insert “(other than a sacrificed contribution)”.

15  Section 23B

Before “For”, insert “(1)”.

16  Section 23B

Omit “sections 23 and 23A”, substitute “a provision covered by subsection (2)”.

17  At the end of section 23B

Add:

             (2)  The provisions are as follows:

                     (a)  section 15A (which deals with salary sacrifice arrangements);

                     (b)  section 23 (which deals with reduction of charge percentage);

                     (c)  section 23A (which deals with offsetting late payments against an employer’s liability to pay superannuation guarantee charge).

18  Application

The amendments made by this Schedule apply in relation to working out an employer’s superannuation guarantee shortfall for quarters beginning on or after 1 July 2018.