Federal Register of Legislation - Australian Government

Primary content

Regulations as made
This instrument allows the commutation of certain income streams for the purposes of meeting the superannuation transfer balance cap.
Administered by: Treasury
Registered 04 Apr 2022
Table of contents.

Commonwealth Coat of Arms of Australia

 

Treasury Laws Amendment (Allowing Commutation of Certain Income Streams) Regulations 2022

I, General the Honourable David Hurley AC DSC (Retd), Governor‑General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following regulations.

Dated 31 March 2022

David Hurley

Governor‑General

By His Excellency’s Command

Jane Hume

Minister for Superannuation, Financial Services and the Digital Economy

 

 

 

  

  


Contents

1............ Name............................................................................................................................. 1

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

3............ Authority....................................................................................................................... 1

4............ Schedules...................................................................................................................... 1

Schedule 1—Amendments                                                                                                                          2

Income Tax Assessment (1997 Act) Regulations 2021                                                                    2

Retirement Savings Accounts Regulations 1997                                                                             3

Superannuation Industry (Supervision) Regulations 1994                                                           4

 


1  Name

                   This instrument is the Treasury Laws Amendment (Allowing Commutation of Certain Income Streams) Regulations 2022.

2  Commencement

             (1)  Each provision of this instrument 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.  The whole of this instrument

The day after this instrument is registered.

5 April 2022

Note:          This table relates only to the provisions of this instrument as originally made.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

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

3  Authority

                   This instrument is made under the following:

                     (a)  the Income Tax Assessment Act 1997;

                     (b)  the Retirement Savings Accounts Act 1997;

                     (c)  the Superannuation Industry (Supervision) Act 1993.

4  Schedules

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

Schedule 1Amendments

  

Income Tax Assessment (1997 Act) Regulations 2021

1  At the end of Subdivision 294‑B

Add:

294‑25.02  Credit in transfer balance account—commutation of certain capped defined benefit income streams

             (1)  For the purposes of item 5 of the table in subsection 294‑25(1) of the Act, a transfer balance credit arises under this section in your transfer balance account if:

                     (a)  you receive a superannuation lump sum because a capped defined benefit income stream (the commuted stream) covered by any of items 1 to 7 of the table in subsection 294‑130(1) of the Act is commuted, in full or in part, on or after 1 July 2017; and

                     (b)  the superannuation lump sum is transferred directly to the purchase of a superannuation income stream (the commenced stream) that is covered by an item of the following table and is in the retirement phase.

 

Covered superannuation income stream

Item

Topic

A superannuation income stream is covered if:

1

Life expectancy pension

it is a pension for the purposes of the SIS Act that is provided under rules that meet the standards of subregulation 1.06(7) of the SIS Regulations

2

Life expectancy annuity

it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation 1.05(9) of the SIS Regulations

3

Market linked pension

it is a pension for the purposes of the SIS Act that is provided under rules that meet the standards of subregulation 1.06(8) of the SIS Regulations

4

Market linked annuity

it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation 1.05(10) of the SIS Regulations

5

Market linked pension (RSA)

it is a pension for the purposes of the RSA Act that is provided under terms and conditions that meet the standards of subregulation 1.07(3A) of the RSA Regulations

             (2)  The amount of the credit is the value worked out under item 2 of the table in subsection 294‑25(1) of the Act for the commenced stream as if that item applied to the commenced stream.

             (3)  The credit arises immediately after the transfer balance debit arises in relation to the commutation under subsection 294‑80.02A(3) of this instrument.

             (4)  For the purposes of subsection 294‑25(3) of the Act, item 2 of the table in subsection 294‑25(1) of the Act does not apply to superannuation income streams that are purchased in circumstances resulting in transfer balance credits arising under this section.

2  After section 294‑80.02

Insert:

294‑80.02A  Debit in transfer balance account—commutation of certain capped defined benefit income streams

             (1)  For the purposes of item 8 of the table in subsection 294‑80(1) of the Act, a transfer balance debit arises under this section in your transfer balance account if:

                     (a)  you receive a superannuation lump sum because a capped defined benefit income stream (the commuted stream) covered by any of items 1 to 7 of the table in subsection 294‑130(1) of the Act is commuted, in full or in part, on or after 1 July 2017; and

                     (b)  the superannuation lump sum is transferred directly to the purchase of a superannuation income stream (the commenced stream) that is covered by an item of the table in subsection 294‑25.02(1) of this instrument and is in the retirement phase.

             (2)  The amount of the debit is the amount worked out under item 1 of the table in subsection 294‑80(1) of the Act (as it applies in relation to a capped defined benefit income stream under section 294‑145 of the Act) for the commuted stream as if that item applied to the commuted stream.

             (3)  The debit arises at the later of:

                     (a)  immediately after the commencement of the Treasury Laws Amendment (Allowing Commutation of Certain Income Streams) Regulations 2022; and

                     (b)  immediately after the commutation occurs.

             (4)  For the purposes of subsection 294‑80(3) of the Act, item 1 of the table in subsection 294‑80(1) of the Act does not apply to capped defined benefit income streams that are commuted in circumstances resulting in transfer balance debits arising under this section.

Retirement Savings Accounts Regulations 1997

3  Subparagraph 1.07(3A)(e)(viii)

Omit “and”, substitute “or”.

4  At the end of paragraph 1.07(3A)(e)

Add:

                            (ix)  in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; and

5  At the end of paragraph 1.08(2)(b)

Add:

                            (iv)  to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; or

Superannuation Industry (Supervision) Regulations 1994

6  Subparagraph 1.05(9)(e)(ii)

Omit “and”, substitute “or”.

7  At the end of paragraph 1.05(9)(e)

Add:

                            (iii)  to allow commutation in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; and

8  Subparagraph 1.05(9)(h)(ix)

Omit “and”.

9  At the end of paragraph 1.05(9)(h)

Add:

                             (x)  in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; and

10  Subparagraph 1.05(10)(d)(viii)

Omit “and”.

11  At the end of paragraph 1.05(10)(d)

Add:

                            (ix)  in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; and

12  Subparagraph 1.06(7)(e)(ii)

Omit “and”, substitute “or”.

13  At the end of paragraph 1.06(7)(e)

Add:

                            (iii)  to allow commutation in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; and

14  Subparagraph 1.06(7)(g)(ix)

Omit “and”.

15  At the end of paragraph 1.06(7)(g)

Add:

                             (x)  in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; and

16  Subparagraph 1.06(8)(d)(viii)

Omit “and”.

17  At the end of paragraph 1.06(8)(d)

Add:

                            (ix)  in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; and

18  After subparagraph 1.07B(3)(b)(iii)

Insert:

                            (iv)  to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; or

19  After subparagraph 1.07C(2)(b)(iii)

Insert:

                            (iv)  to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; or

20  At the end of subregulation 1.08(2)

Add:

               ; or (d)  is for conversion in relation to a commutation in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953.