Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013 (82 of 2013)

Schedule 4   Sustaining the superannuation contribution concession: consequential amendments

Part 2   Amendment of the Parliamentary Contributory Superannuation Act 1948

5   After Part VB

Insert:

Part VC - Sustaining the superannuation contribution concession

Division 1 - Preliminary

22SA Definitions

In this Part:

defined benefit interest has the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997.

Division 293 tax law has the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997.

release authority lump sum has the meaning given by section 22SC.

superannuation provider has the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997.

22SB Secretary treated as superannuation provider

For the purposes of this Act, the Division 293 tax law applies as if the Secretary of the Finance Department was the superannuation provider in relation to the defined benefit interest established under this Act.

Division 2 - Release under a release authority

22SC Release of benefits under a release authority

(1) A lump sum (the release authority lump sum ) may be paid at a time in compliance with a release authority issued to a person under item 3 of the table in subsection 135-10(1) in Schedule 1 to the Taxation Administration Act 1953 and given to the Secretary of the Finance Department in accordance with Subdivision 135-B in that Schedule if, at that time, either:

(a) the person's surcharge debt account is not in debit; or

(b) subsection (2) applies.

Note: The purpose of the release authority is to allow a lump sum to be paid to the Commissioner to meet a debt the person has under Subdivision 133-C in Schedule 1 to the Taxation Administration Act 1953.

Surcharge election must be made or forgone

(2) This subsection applies if any of the following are satisfied:

(a) the person has made an election under subsection 18A(1) (which deals with the adjustment of benefits to take account of the surcharge deduction amount);

(b) the person has not made an election under that subsection and the period within which such an election may be made has expired;

(c) the person gives the Secretary of the Finance Department written notice that the person forgoes making an election under that subsection.

Appropriation

(3) Payment of a release authority lump sum must be made out of the Consolidated Revenue Fund, which is appropriated accordingly.

22SD Limit on amount that may be released

(1) In addition to any requirements in Division 135 in Schedule 1 to the Taxation Administration Act 1953, the amount of a release authority lump sum paid in relation to a release authority issued to a person must not have the effect that the person's retiring allowance is reduced below zero.

(2) For the purpose of subsection (1), the effect of a release authority lump sum on the amount of the person's retiring allowance is to be worked out after taking account of:

(a) the amount of any surcharge adjustment applicable in relation to the person's retiring allowance under a provision of this Act; and

(b) any reduction under section 22DI (which deals with special payments during deferral period); and

(c) any reduction under Part VAA (which deals with family law splitting).

22SE Calculation of benefits after payment of release authority lump sum

(1) If:

(a) a release authority lump sum is paid in relation to a release authority issued to a person; and

(b) the person is entitled to a retiring allowance in accordance with section 18;

the person's rate of retiring allowance is the applicable percentage of the rate of retiring allowance that would, apart from this section (but having regard to any other provisions of this Act that affect that rate), be worked out under section 18.

(2) For the purposes of subsection (1), the applicable percentage is worked out using this formula:

[1 - ((Release authority lump sum / Age factor) / Basic allowance)] x 100

where:

age factor means the age factor for the person on the day on which the retiring allowance becomes payable (see subsection (4)).

basic rate means the rate of the retiring allowance that would, apart from this subsection (but having regard to any other provisions of this Act that affect that rate), be worked out under section 18 for the person at the time the retiring allowance becomes payable.

(3) The applicable percentage mentioned in subsection (1) is to be calculated to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

(4) The Secretary of the Finance Department may, by legislative instrument, determine the age factor, or the method for working out the age factor, for the purposes of subsection (2).