Taxation Laws Amendment (Superannuation) Act 1992 (208 of 1992)

Part 2   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 2   Amendments relating to limits for deductions for contributions to superannuation funds

4   Deduction for contributions to eligible superannuation fund for employees

Section 82AAC of the Principal Act is amended by omitting subsections (2) and (2A) and substituting the following subsections:

"(2) Subject to subsection (2D) (which deals with elective deduction limits), the total of the deductions allowable under subsection (1) for contributions made by a taxpayer, or by a taxpayer and one or more associates of the taxpayer, in a year of income in respect of a particular employee must not exceed the employee's deduction limit for the year of income (worked out under subsection (2A)).

"(2A) An employee's deduction limit for a year of income is worked out:

(a) by identifying the day in the year of income, or the last day in the year of income, on which the taxpayer, or any of the associates of the taxpayer, made a contribution in respect of the employee, where a deduction would have been allowable to the taxpayer, or to the associate, under subsection (1) for that contribution (assuming subsection (2) had not been enacted); and

(b) by working out the age reached by the employee as at the end of that day; and

(c) if the year of income is the 1994-95 year of income-by applying the following table:

Age in years Deduction limit

under 35 $ 9,000

35 to 49 $25,000

50 and over $62,000 ; and

(d) if the year of income is a later year of income-by applying that table subject to the indexation arrangements set out in subsection (2B).

"(2B) The table in subsection (2A) applies for the 1995-96 year of income or a later year of income as if each indexable amount were replaced by the amount worked out using the formula:

Indexation factor x Previous indexable amount

where:

'Indexation factor' means the indexation factor for the year of income worked out under section 159SG;

'Previous indexable amount' means the indexable amount concerned for the previous year of income.

"(2C) In subsection (2B):

'indexable amount' means:

(a) an amount of $9,000, $25,000 or $62,000 specified in the table in subsection (2A); or

(b) if any such amount has previously been altered under subsection (2B)-the altered amount.

"(2D) If:

(a) at all times during so much of a year of income as occurred when a taxpayer was an employer, 10 or more employee positions under the taxpayer are filled by employees of the taxpayer; and

(b) apart from subsection (2) and this subsection, deductions are allowable to the taxpayer, or to one or more associates of the taxpayer, under subsection (1) for contributions made in the year of income in respect of at least 10 of those positions; and

(c) the taxpayer elects that this subsection is to apply to the taxpayer for the year of income;

then, in spite of subsection (2), the total of the deductions allowable under subsection (1) in respect of contributions made by the taxpayer, or by the taxpayer and one or more of the associates of the taxpayer, in the year of income in respect of all of the employees of the taxpayer must not exceed:

(d) if the year of income is the 1994-95 year of income-the amount calculated using the formula:

Full-year employee positions x $25,000

where:

'Full-year employee positions' means the number of employee positions under the employer which satisfy the following conditions:

(i) the employee positions were filled by employees of the taxpayer at all times during so much of the year of income as occurred when the taxpayer was an employer;

(ii) apart from subsection (2) and this subsection, deductions are allowable to the taxpayer, or to one or more associates of the taxpayer, under subsection (1) for contributions made in the year of income in respect of the employees who filled those positions; or

(e) if the year of income is a later year of income-the amount calculated using that formula subject to the indexation arrangements set out in subsection (2E).

"(2E) The formula in subsection (2D) applies for the 1995-96 year of income or a later year of income as if the indexable amount were replaced by the amount worked out using the formula:

Indexation factor x Previous indexable amount

where:

'Indexation factor' means the indexation factor for the year of income worked out under section 159SG;

'Previous indexable amount' means the indexable amount for the previous year of income.

"(2F) In subsection (2E):

'indexable amount' means:

(a) an amount of $25,000 specified in the formula in subsection (2D); or

(b) if that amount has previously been altered under subsection (2E)-the altered amount.

"(2G) An election by a taxpayer under subsection (2D) must be made before:

(a) the date of lodgment of the taxpayer's return of income for the year of income to which the election relates; or

(b) such later date as the Commissioner allows.

"(2H) For the purposes of subsection (2D), if:

(a) at a particular time ('cessation time'), an employee of an employer ceases to fill an employee position under the employer; and

(b) at a later time, the employee position is filled by another employee of the employer; and

(c) the period:

(i) beginning at the cessation time; and

(ii) ending at that later time;

does not exceed 3 months;

the employee position is taken to have been filled by an employee of the employer at all times during that period.".