Commonwealth of Australia Explanatory Memoranda

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TEMPORARY RESIDENTS' SUPERANNUATION LEGISLATION AMENDMENT BILL 2008

2008




               THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA











                                   SENATE











     temporary residents' superannuation legislation amendment bill 2008











                    SUPPLEMENTARY EXPLANATORY MEMORANDUM








             Amendments to be moved on behalf of the Government








                     (Circulated by the authority of the
                      Treasurer, the Hon Wayne Swan MP)






Table of contents


Glossary    1


General outline and financial impact    3


Chapter 1    Temporary residents' unclaimed   superannuation  5



Glossary

         The following abbreviations and acronyms are used throughout this
         supplementary explanatory memorandum.

|Abbreviation        |Definition                   |
|APRA                |Australian Prudential        |
|                    |Regulation Authority         |
|Commissioner        |Commissioner of Taxation     |
|TAA 1953            |Taxation Administration Act  |
|                    |1953                         |

General outline and financial impact

Temporary residents' unclaimed superannuation


         Schedule 1 to this Bill requires superannuation providers to pay to
         the Commissioner of Taxation the unclaimed superannuation they hold
         for certain departed temporary residents by the due and payable
         date.


         These amendments make changes to Schedule 1 to the Bill to allow
         regulations to be made to defer the due and payable date for a
         superannuation provider for such amounts in certain prescribed
         circumstances.


         Proposal announced:  These amendments have not previously been
         announced.


         Financial impact:  Not quantifiable.  No material impact expected
         over the forward estimates.


         Compliance cost impact:  Negligible.



Chapter 1
Temporary residents' unclaimed superannuation

Amendment 1 - redundant definition


      1. This amendment will remove a redundant definition from the Bill.
         The term 'terminal medical condition' is not used in the Bill.


Amendments 2, 3, 4, 5, 6 and 7 - when an amount is due and payable


      2. A superannuation provider that has received a notice from the
         Commissioner of Taxation (Commissioner) under section 20C of the
         Bill (the section 20C notice) in connection with a person's
         superannuation interest, will be required to pay to the
         Commissioner any excess amount worked out under section 20F of the
         Bill by the due and payable date for such an amount.  The due and
         payable date is set out under subsection 20F(1) of the Bill.


      3. Without these amendments the due and payable date can be one of the
         following:


                . the next scheduled statement day after the day the
                  section 20C notice was given; or


                . if the section 20C notice is given less than 28 days
                  before the next scheduled statement day - the following
                  scheduled statement day.


      4. These amendments will allow regulations to be made to defer the due
         and payable date to a date later than either of those two dates for
         a superannuation provider.  The amendments will allow, for example,
         regulations to be made to enable the Australian Prudential
         Regulation Authority (APRA) to provide a short-term deferral of a
         due and payable date for a superannuation provider in exceptional
         circumstances (eg, if payment would have a significant adverse
         effect on a superannuation fund's financial position, such as its
         ability to meet its other liabilities).  This would be similar to
         an existing power provided to APRA under the Superannuation
         Industry (Supervision) Regulations 1994 to suspend requests for
         superannuation benefits transfers if the financial position of a
         fund would be significantly adversely affected.


      5.  It is not envisaged that the regulations would provide for any
         general deferral of due and payable dates for the superannuation
         industry.  Superannuation providers should accordingly continue to
         make necessary preparations to be in a position to make payments to
         the Commissioner by the expected due and payable dates (first
         payments are anticipated to be required in April 2009).  In this
         respect it is noted that superannuation providers are already
         required under the Superannuation Industry (Supervision) Act 1993
         to have investment strategies in place that have regard to, among
         other matters, the anticipated liquidity requirements of the fund,
         and it is expected that a deferral of the due and payable date
         would generally only occur in exceptional circumstances.


Amendment 8 - revocation notice


      6. This amendment makes a consequential amendment to paragraph
         20J(6)(a) of the Bill to ensure consistent treatment of a
         revocation of a section 20C notice where there is a deferral of the
         due and payable date (which with these amendments may occur because
         of a deferral by the Commissioner under the Taxation Administration
         Act 1953 (TAA 1953) or a deferral under the regulations).


      7. Without this amendment, a revocation by the Commissioner of a
         section 20C notice will have no effect if the revocation was given
         to the superannuation provider less than 28 days before the
         scheduled statement day and the provider has either given a
         statement or made a payment to the Commissioner purportedly because
         of the section 20C notice.  This is the case despite the due and
         payable date having been deferred by the Commissioner under the TAA
         1953.  This amendment ensures that this will also be the case
         despite the due and payable date for the provider being deferred
         under the regulations.