Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]

CORPORATIONS AMENDMENT REGULATIONS 2004 (NO. 1) 2004 NO. 10

The purpose of the Regulations is to amend the Retirement Savings Account Regulations 1997, the Superannuation Industry (Supervision) Regulations 1994 and the Corporations Regulations 2001 in order to support the necessary administration requirements of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003.

The Superannuation (Government Co-contribution for Low Income Earners) Act 2003 introduces a Government co-contribution for undeducted personal superannuation contributions made by low income earners. The Government co-contribution replaces the low income earner superannuation taxation offset. The Government co-contribution matches eligible personal superannuation contributions made on or after 1 July 2003 by qualifying low income earners up to an annual amount of $1,000. The maximum Government co-contribution will apply to those on or below an annual income of $27,500, with the co-contribution being tapered off for those on annual incomes between $27,500 and $40,000.

Retirement Savings Accounts Amendment Regulations 2004 (No. 1)

Subsection 200(1) of the Retirement Savings Accounts Act 1997 (the RSA Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the RSA Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the RSA Act.

The RSA Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Retirement Savings Accounts Regulations 1997, among other matters, set out the contribution rules for Retirement Savings Account providers. The Regulations allow providers to accept Government co-contributions and alter an account holder's benefit in order to be reimbursed for the repayment of an overpaid Government co-contribution.

Details of the Regulations are set out in Attachment A.

The Regulations commenced on gazettal.

Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 1)

Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the SIS Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the SIS Act.

The SIS Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Superannuation Industry (Supervision) Regulations 1994, among other matters, provide for the minimum level of member benefits and set out the contribution rules for superannuation funds. The Regulations provide for the treatment of the Government co-contribution in respect of these matters.

Details of the Regulations are set out in Attachment B.

The Regulations commenced on gazettal.

Corporations Amendment Regulations 2004 (No. 1)

Subsection 1364(1) of the Corporations Act 2001 (the Corporations Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Corporations Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Corporations Act.

The Corporations Regulations 2001, among other matters, prescribe the details to be included in periodic statements for financial products with an investment component. The Corporations Regulations 2001 also specify certain transactions relating to a financial product which do not require confirmation each time they occur. The Regulations provide for the treatment of the Government co-contribution in respect of these matters.

The Corporations Agreement 2002 requires the Commonwealth to consult members of the Ministerial Council for Corporations before making amendments to the Corporations Regulations. The responsible Ministers of the States and Northern Territory on the Ministerial Council for Corporations have been consulted regarding the Regulations.

The Corporations Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Ministerial Council for Corporations has been consulted about the Regulations and no adverse comments have been made.

Details of the Regulations are set out in Attachment C.

The Regulations commence on 1 July 2004.

This start date reflects that in most cases a Government co-contribution will not be paid for qualifying undeducted personal superannuation contributions made in the 2003-2004 financial year until the 2004-2005 financial year. The Commissioner of Taxation will wait until after the end of the 2003-2004 financial year for information on which to make a determination to pay a co-contribution. Given that the co-contributions would not be paid until the 2004-2005 financial year, superannuation providers would not need to meet any of the requirements imposed by the Regulations until the financial years that start on or after 1 July 2004.

The Office of Regulation Review has advised that a Regulatory Impact Statement (RIS) is not required to be included with the regulations. The RIS requirements were met by the RIS included with the Explanatory Memorandum for the Superannuation (Government Co-contribution for Low Income Earners) Act 2003. This should be referred to as necessary for the purposes of these regulations.

ATTACHMENT A

Details of the Retirement Savings Accounts Amendment Regulations 2004 (No. 1)

Explanation of the Amendments

Regulation 1 specifies the name of the Regulations as the Retirement Savings Accounts Amendment Regulations 2004 (No. 1).

Regulation 2 provides that the Regulations commence on gazettal.

Regulation 3 provides that Schedule 1 amends the Retirement Savings Accounts Regulations 1997.

Schedule 1 - Amendments

Items 1 and 2

The regulations amend Subregulation 1.03(1) of the Retirement Savings Accounts Regulations 1997 to include the repayment of an overpaid Government co-contribution to the Commonwealth, in the definition of a cost. This allows a retirement savings account provider to alter an account holder's benefit in order to be reimbursed for the repayment of an overpaid Government co-contribution to the Commissioner of Taxation. Section 24 of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 allows the Commissioner to recover such overpaid amounts.

Items 3 and 4

The regulations insert new paragraph 5.03(1)(g) into the Retirement Savings Accounts Regulations 1997 to allow retirement savings account providers to accept Government co-contributions on behalf of account holders.

ATTACHMENT B

Details of the Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 1)

Explanation of the Amendments

Regulation 1 specifies the name of the regulations as the Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 1).

Regulation 2 provides that the regulations commence on gazettal.

Regulation 3 provides that Schedule 1 amends the Superannuation Industry (Supervision) Regulations 1994.

Schedule 1 - Amendments

Item 1

The regulations amend Subregulation 1.03(1) of the Superannuation Industry (Supervision) Regulations 1994 to define 'Co-contribution Act' as the Superannuation (Government Co-contribution for Low Income Earners) Act 2003.

Item 2

The regulations amend Subregulation 5.01(1) of the Superannuation Industry (Supervision) Regulations 1994 to define 'Government co-contribution benefits' as 'Government co-contributions made under the Co-contribution Act less the costs applicable to them'.

Items 3 to 6

The Regulations amend the Superannuation Industry (Supervision) Regulations 1994 to provide that the Government co-contribution forms part of a member's minimum benefit.

The Regulations insert new paragraph 5.04(2)(c) into the Superannuation Industry (Supervision) Regulations 1994 so that Government co-contribution benefits and any related investment earnings are treated as part of a member's minimum benefits in an accumulation fund.

The Regulations also insert subparagraph 5.04(3)(b)(iii) into the Superannuation Industry (Supervision) Regulations 1994 so that Government co-contribution benefits are treated as part of a member's minimum benefits in a defined benefit scheme.

This is consistent with the treatment of member-financed benefits, which the co-contribution matches.

Item 7

The Regulations make a technical amendment to paragraph 7.04(1)(d) of the Superannuation Industry (Supervision) Regulations 1994.

Items 8 to 11

The regulations insert paragraphs 7.04(1)(g) and 7.05(1)(g) into the Superannuation Industry (Supervision) Regulations 1994 to allow regulated superannuation funds to accept a Government co-contribution.

Items 12 and 13

The regulations insert paragraph 13.16(2)(g) into the Superannuation Industry (Supervision) Regulations 1994 to allow a trustee to be reimbursed for an amount paid to the Commissioner of Taxation on behalf of a member under section 24 of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (i.e. a repayment of an overpaid Government co-contribution amount to the Commissioner).

ATTACHMENT C

Corporations Amendment Regulations 2004 (No. 1)

Explanation of the Amendments

Regulation 1 specifies the name of the regulations as the Corporations Amendment Regulations 2004 (No. 1).

Regulation 2 provides that the regulations commence on 1 July 2004.

Regulation 3 provides that Schedule 1 amends the Corporations Regulations 2001.

Schedule 1 - Amendments

Items 1 to 4

The regulations amend Subregulation 7.9.01(1) of the Corporations Regulations 2001 to insert definitions of 'Government co-contribution', 'net amount of Government Co-contribution received', 'RSA' and 'superannuation provider'.

The definition of a 'net amount of Government co-contribution received' includes all amounts credited to a superannuation fund member or retirement savings account (RSA) holder less any amounts repaid to the Commissioner of Taxation during a reporting period.

Items 5 to 8

The regulations amend subregulations 7.9.20(1) and 7.9.26(1) of the Corporations Regulations 2001 to require trustees of superannuation funds (other than self managed superannuation funds) and RSA providers to report to members and account holders on Government co-contributions that have been credited to a person's account. This will be done via the existing periodic statement processes. The additional item required to be reported is the 'net amount of Government co-contribution received during the reporting period', as defined in the above mentioned amendment to subregulation 7.9.01(l).

Items 9 and 10

The regulations amend Subregulation 7.9.62(4) of the Corporations Regulations 2001 to exempt superannuation providers from confirming a transaction relating to a Government co-contribution. Superannuation funds and RSA providers are not required to report to members each time a Government co-contribution is made. Superannuation funds and RSA providers are only required to report the net amount of Government co-contributions received during a reporting period through the periodic statement process.

Much of the administrative design for the co-contribution measure is based on the reporting system used for superannuation surcharge purposes. This is consistent with the treatment of superannuation surcharge liabilities in this provision.