The Parliament of the Commonwealth of Australia

Superannuation (Unclaimed Money and Lost Members) Consequential and Transitional Bill 1999

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 1 - Overview and Preliminary

Overview

1.1 This Bill makes consequential amendments to 9 Acts as a result of the Superannuation (Unclaimed Money and Lost Members) Act 1999 (the New Act) and sets out transitional provisions which apply in relation to the New Act.

1.2 This Bill is structured in 3 Parts: Part 1 (Preliminary), Part 2 (Amendment of Acts) and Part 3 (Transitional and Application Provisions). This Bill contains 3 Schedules: Schedule 1 (Amendments), Schedule 2 (Amendments relating to the enactment of the Public Service Act 1999 ) and Schedule 3 (Other amendments).

Summary

Purpose of the provisions

1.3 This Bill makes consequential amendments to the New Act, the Financial Transaction Reports Act 1988 , the Income Tax Assessment Act 1936 (ITAA 1936), the Retirement Savings Accounts Act 1997 (the RSA Act), the Small Superannuation Accounts Act 1995, the Superannuation Act 1976, the Superannuation Act 1990, the Superannuation Industry (Supervision) Act 1993 (the SIS Act) and the Taxation Administration Act 1953 (TAA 1953) and contains transitional provisions relating to the New Act.

Date of effect

1.4 Subject to transitional arrangements, the amendments outlined in this Bill are to have effect when the New Act receives Royal Assent. [Clause 2]

Transitional arrangements

The reporting and payment of unclaimed superannuation money (unclaimed money) to Commonwealth, State and Territory unclaimed money registers is currently linked to half-calendar years (ie. 1 January to 30 June and 1 July to 31 December). Superannuation providers must determine the unclaimed money they have at the end of each half-year and pay those monies and report information in respect of those monies within 4 months from the end of the half-year.

1.6 The New Act continues this half-calendar year cycle of reporting and payment, however to ensure that the effect of this Bill in respect of the half-calendar year cycle is prospective, this Bill will apply in respect of the reporting and payment from the next half-year after Royal Assent. [Clause 8]

1.7 Item 264 of Schedule 1 to the Superannuation Legislation (Commonwealth Employment) Repeal and Amendment Bill 1999proposes to add a new subsection 158(3) into the Superannuation Act 1976 containing a reference to the unclaimed money provisions of the SIS Act. Items 41 and 42 of Schedule 1 to this Bill update that reference to the unclaimed money provisions of the SIS Act (provisions which are repealed by this Bill) with a reference to the New Act. As the commencement time of item 264 is not certain, to ensure that items 41 and 42 achieve their purpose, this Bill provides that if item 264 commences at or after the time when the New Act commences, items 41 and 42 commence at the later of:

·
immediately after the Royal Assent of the New Act; and
·
immediately after the commencement of item 264.

[Subclause 2(3)]

1.9 Item 868 of Schedule 1 to the Public Employment (Consequential and Transitional) Amendment Bill 1999 proposes to amend the Superannuation Contributions Tax (Assessment and Collection Act) 1997 with effect from the commencement of the Public Service Bill 1999, to update references to the Public Service Act 1922 with references to the Public Service Act 1999 .

1.9 Amendments in Schedule 2 to this Bill propose similar amendments to the New Act as a consequence of the Public Employment (Consequential and Transitional) Amendment Bill 1999. As the commencement time of item 868 is not certain, to ensure that Schedule 2 achieves its purpose, this Bill provides that if item 868 commences:

·
before the New Act commences, Schedule 2 to this Bill commences immediately after the New Act commences; or
·
at or after the New Act commences, Schedule 2 to this Bill commences at the later of:

-
immediately after the New Act commences; and
-
immediately after the commencement of item 868.

[Subclause 2(4)]

1.10 This Bill also makes a technical amendment to section 202 of the ITAA 1936 and sections 8WA and 8WB of the TAA 1953to rectify a drafting error which occurred as a result of the insertion of 2 paragraph (k) s in section 202 of the ITAA 1936.

1.11 The first paragraph (k) was inserted by the Family (Tax Initiative) Act 1996 with effect from 1 January 1997 to enable tax file numbers (TFNs) to facilitate the administration of family tax payments under the Family Tax Initiative. The second paragraph (k) was inserted by the Retirement Savings Accounts (Consequential Amendments) Act 1997 with effect from 2 June 1997. This Bill ensures that the drafting error is remedied with effect from that date [subclause 2(5)] . The first paragraph (k) is no longer required as the use of TFNs for the purpose of facilitating the administration of family tax payments under the Family Tax Initiative is also authorised under paragraph 202(e) of the ITAA 1936. As the first paragraph (k) has now become redundant it is repealed with effect from Royal Assent of this Bill [subclause 2(6)] .

1.12 The correction of the drafting error is beneficial to taxpayers as it provides certainty that taxpayers are not liable for an offence for use of TFNs in accordance with the RSA Act. However, to ensure that there can be no adverse impact of the correction on entities such as trustees of superannuation funds who refused to quote TFNs on the basis of the drafting error, this Bill contains a transitional provision that provides that the correction does not make any person liable for an offence. [Clause 9]

Background to the legislation

1.13 The Superannuation Guarantee (Administration) Act 1992 and the Superannuation Guarantee Charge Act 1992 provided a major extension of superannuation to the workforce. With the increased coverage, many casual and itinerant workers and those with broken employment patterns became lost members in the sense that they lost the paperwork associated with their account, were never given the paperwork because they terminated employment before their superannuation guarantee contributions were made, or lost contact with their fund in other circumstances.

1.14 The Commonwealth Government policy document Strengthening Superannuation Security (21 October 1992) announced the establishment of the Commonwealth unclaimed money register and the Commonwealth lost members register to maximise the prospect of superannuation members receiving contributions made on their behalf. Along with State and Territory unclaimed money registers, the Commonwealth registers are currently operating under the SIS Act and the RSA Act.

1.15 The New Act strengthens arrangements for reuniting people with their superannuation (particularly casual and itinerant workers and workers with broken employment patterns) while this Bill makes transitional and consequential amendments to various Commonwealth legislation as a consequence of the New Act.

1.16 Many of the amendments made by this Bill are as a consequence of the New Act consolidating existing provisions relating to unclaimed money and lost superannuation members (lost members) which are currently spread over 4 items of legislation. The existing provisions are set out in Part 22 of the SIS Act, regulation 11.08 of the Superannuation Industry (Supervision) Regulations (the SIS Regulations), Part 8 of the RSA Act and regulation 6.09 of the Retirement Savings Accounts Regulations (the RSA Regulations).

Preliminary

Overview

1.17 Part 1 of this Bill sets out the preliminary provisions of the Act. [Clauses 1 and 2]

Purpose of the provisions

1.18 The purpose of the provisions is to provide the citation of the short title of the Act and the commencement of the Act.

Explanation of the provisions

Short title of the Act

1.19 When this Bill is enacted, it will be called the Superannuation (Unclaimed Money and Lost Members) Consequential and Transitional Act 1999 (the Act). [Clause 1]

Commencement of the Act

1.20 Subject to limited exceptions, the Act commences when the New Act commences. [Subclauses 2(1) and (2)]

1.21 The exceptions are set out in subclauses 2(3), (4), (5) and (6) and are explained at paragraphs 1.7 to 1.12.


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