Explanatory StatementIssued by authority of the Minister for Revenue and Assistant Treasurer
Retirement Savings Accounts Act 1997
Retirement Savings Accounts Amendment Regulations 2003 (No. 1)
Section 200(1) of the Retirement Savings Accounts Act 1997 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Act.
The Act allows banks, building societies, credit unions and life insurance companies to provide superannuation without a trust structure in the form of a Retirement Savings Account (RSA).
Recent amendments to the Superannuation Industry (Supervision) Regulations 1994 and the Retirement Savings Account Regulations 1997 (RSA Regulations) gave effect to the Government's election commitment to allow temporary residents to access their superannuation benefits after they have permanently departed Australia. Since commencement of the measure on 1 July 2002 the implementation process has evolved and further amendments are required.
The RSA Regulations provide that where a RSA holder's withdrawal benefit is $5,000 or more, then the RSA provider of the fund must receive a written statement from the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA) that the RSA holder was the holder of an eligible temporary resident visa that has expired or been cancelled and that they had permanently departed Australia.
Where the RSA holder's benefit is less than $5,000, the RSA provider needs to receive a copy of a visa showing that the RSA holder was the holder of an eligible temporary resident visa that has expired or has been cancelled as well as a copy of their passport showing that they had departed Australia.
An automated approach for temporary residents to apply for release of their benefits is being developed by the Australian Taxation Office (ATO) in conjunction with DIMIA. This will enable the temporary resident to apply electronically (through the ATO website) for certification that they are eligible to have their benefits paid. DIMIA will provide an electronic response to the ATO that will confirm or deny if the applicant held a relevant visa, and if they have departed Australia. It is intended that all temporary residents will have the option of using this electronic system.
However, those currently with benefits less than $5,000 would not be able to use the system as the relevant regulations do not allow them the option of seeking DIMIA certification (rather they must provide copies of visas and passports to the RSA provider).
The purpose of the Regulations is to amend the RSA Regulations to allow temporary residents whose withdrawal benefit is less than $5,000 the option of providing the RSA provider a statement from DIMIA confirming their eligibility for release of their superannuation benefit. This will ensure that all temporary residents, irrespective of the size of their benefit will be able to use the electronic application system of certification rather than having to provide copies of visas or passports to the RSA provider.
The Regulations also amend the RSA Regulations to confirm that New Zealand citizens are excluded from the measure. As stated in the explanatory statement to the original regulations that gave effect to the measure, it was not intended to provide access to superannuation benefits to those people who have the option of retiring in Australia and accessing the Age pension, including New Zealand citizens. In certain limited circumstances it may have been possible for a New Zealand citizen to hold an eligible temporary resident visa. The amendment would put beyond doubt that New Zealand citizens are not eligible.
Details of the Regulations are set out in the Attachment.
The Regulations commenced on gazettal.
This is a formal provision specifying the mode of citation of the regulations.
The regulations will commence on gazettal.
The Retirement Savings Accounts Regulations 1997 (the RSA Regulations) are amended as set out in Schedule 1.
Item 1 of Schedule 1 - amends Subregulation 4.01(2) to provide a new definition for an eligible temporary resident visa.
To be eligible for release of their benefit under the temporary resident measure, an individual has had to be in possession of an eligible temporary resident visa and that visa has expired or has been cancelled (whichever is applicable). Schedule 3 of the regulations contain a list of the eligible temporary resident visa classes.
New Zealand citizens would not normally enter Australia on any of the visas listed, however, in certain limited circumstances it may be possible for them to do so. To put beyond doubt that New Zealand citizens are not eligible, the definition of eligible temporary resident visa is amended so that a visa held by a New Zealand citizen is not a eligible temporary resident visa.
Item 2 of Schedule 1 - amends Subregulation 4.23A(3) to allow temporary residents whose withdrawal benefit is less than $5,000 the option of providing the RSA provider a statement from Department of Immigration and Multicultural and Indigenous Affairs (DIMIA) to confirming their eligibility.
Item 3 of Schedule 1 - inserts new Subregulation 4.23A(3A) which provides that the statement from DIMIA may be in electronic form.
Item 4 of Schedule 2 - amends Schedule 2, item 104 to correct a referencing error.