SMALL SUPERANNUATION ACCOUNTS ACT 1995

PART 1 - INTRODUCTION  

SECTION 3   3   SIMPLIFIED EXPLANATION  


The following is a simplified explanation of this Act:
  • · The Australian Taxation Office administers a special account. Notional accounts are kept within the special account.
  • · The account offers employees with small balances an opportunity to avoid the erosion of those balances by fees.
  • · Employees may request that account balances be transferred to a nominated superannuation fund or RSA .
  • · Except in special cases, employees will not have direct access to their account balances.
  • · Interest will be calculated on the daily balance of the account and credited to the account on a quarterly basis.
  • · Interest is exempt from income tax .
  • · If an account balance exceeds $1,200, interest will only be credited on the first $1,200 of the balance. This is an incentive for employees to request that balances of more than $1,200 be transferred to a superannuation fund.
  • · Under the Income Tax Assessment Act 1936 , employers may get income tax deductions for deposits. There is an annual deduction limit of $1,200 per employee.
  • · Under the Superannuation Guarantee (Administration) Act 1992 , deposits made by an employer will be treated as superannuation contributions .
  • · The accounts may also be credited with Government co-contributions payable under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 . The rules for these deposits differ in some respects from those that apply to other deposits.

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