House of Representatives

Superannuation (Objective) Bill 2016

Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016

Superannuation (Excess Transfer Balance Tax) Imposition Act 2016

Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon Scott Morrison MP and Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP)

Glossary

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

Abbreviation Definition
Accumulation phase The period during which a superannuation interest is not in the retirement phase
APRA Australian Prudential Regulation Authority
ATO Australian Taxation Office
AWOTE Average Weekly Ordinary Time Earnings
Cap increment A component of a child recipient's personal transfer balance cap
Capped defined benefit balance The net amount of capital an individual has transferred to their superannuation retirement phase to support capped defined benefit income streams
Capped defined benefit income stream Certain superannuation income streams that are subject to modifications
CGT Capital gains tax
Child recipient A child dependant that receives a death benefit income stream because of the death of a parent
Commissioner Commissioner of Taxation
Commutation The process of ceasing, in whole or in part, a superannuation income stream and converting it into a superannuation lump sum
Commutation authority A notice the Commissioner issues to a superannuation income stream provider requiring the provider to commute an amount of a specified superannuation income stream.
CPI The Consumer Price Index
Crystallised reduction amount An individual's excess transfer balance that the Commissioner has determined is required to be removed from the retirement phase
Debit value The residual component of a capped defined benefit income stream's special value
Deferred superannuation income stream To be defined in related regulations. Includes guaranteed annuities and group self-annuities where a superannuation income stream benefit payment is delayed
Defined benefit income Superannuation income stream benefits an individual receives from capped defined benefit income streams
Defined benefit income cap The amount of superannuation income stream benefits an individual can receive from capped defined benefit income streams before being subject to additional income tax - $100,000 in 2017-18 (indexed in line with the general transfer balance cap).
Division 293 Division 293 of the Income Tax Assessment Act 1997
Excess transfer balance The amount by which an individual's transfer balance exceeds their personal transfer balance cap on a particular day (unless the excess is attributable to the individual's capped defined benefit balance)
Excess transfer balance earnings A notional amount in respect of an excess transfer balance for a particular day, generally credited to an individual's transfer balance account
Excess transfer balance period A period during which an individual has an excess transfer balance
Excess transfer balance tax Tax imposed on excess transfer balance earnings over an excess transfer balance period
First year cap space The difference between the general transfer balance cap and an individual's total superannuation balance
General transfer balance cap An amount of $1.6 million in 2017-18 and indexed to the CPI in $100,000 increments
IT(TP)A 1997 Income Tax (Transitional Provisions) Act 1997
ITAA 1936 Income Tax Assessment Act 1936
ITAA 1997 Income Tax Assessment Act 1997
ITAR 1997 Income Tax Assessment Regulations 1997
LISTO Low Income Superannuation Tax Offset
Objective Bill Superannuation (Objective) Bill 2016
OBPR Office of Best Practice Regulation
PAYG Withholding Pay-As-You-Go Withholding
Personal transfer balance cap The maximum amount of capital an individual can transfer to their superannuation retirement phase, indexed proportionally to the general transfer balance cap
Reversionary income stream A superannuation income stream that automatically reverts to a nominated beneficiary on the death of its current recipient
RIS Regulation Impact Statement
RP or Retirement phase The period during which a superannuation income stream is currently payable, or, if it is a deferred superannuation income stream, when a person has met a relevant nil condition of release. A TRIS is never in the retirement phase.
RSA Retirement Savings Account
RSAR 1997 Retirement Savings Accounts Regulations 1997
SISR 1994 Superannuation Industry (Supervision) Regulations 1994
SMSF Self-managed superannuation fund
Special value The modified value of a capped defined benefit income stream
SUMLMA Superannuation (Unclaimed Money and Lost Members) Act 1999
Superannuation death benefit A superannuation lump sum, superannuation income stream or superannuation income stream benefit a person receives because of the death of another person
Superannuation income stream Generally a right to receive periodic payments from a superannuation interest, for example a pension or annuity
Superannuation income stream benefit Each individual payment an individual receives under a superannuation income stream
Superannuation lump sum A benefit (other than a superannuation income stream benefit) an individual receives from a superannuation interest
Superannuation income stream provider The trustee of a superannuation fund or approved deposit fund, a RSA provider or a life insurance company that provides a superannuation income stream to an individual
TAA 1953 Taxation Administration Act 1953
TLA Bill Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016
Total superannuation balance A method for valuing all of an individual's superannuation interests
Transfer balance or transfer balance account The net amount of capital an individual has transferred to their superannuation retirement phase
Transfer balance cap See general transfer balance cap and personal transfer balance cap
TRIS Transition to retirement income stream (generally also includes transition to retirement income pensions, non-commutable allocated annuities and non-commutable allocated pensions)


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