Superannuation Contributions Determination

SCD 2004/5

Superannuation contributions: for the 2004-2005 financial year, what is the amount represented by A in the first formula contained within subsection 5(1) of the Superannuation Contributions Tax Imposition Act 1997 and subsection 5(1) of the Termination Payments Tax Imposition Act 1997 ?

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FOI status:

1. The amount represented by A in the first formula contained within subsection 5(1) of the Superannuation Contributions Tax Imposition Act 1997 (SCTIA) and subsection 5(1) of the Termination Payments Tax Imposition Act 1997 (TPTIA) is $1,582.59259. ^[F1]

2. Subsection 5(1) of the SCTIA provides, subject to subsection 5(3):

If the member's adjusted taxable income for a financial year (relevant adjusted taxable income) is not less than the lower income amount but is less than the higher income amount, the rate of the superannuation contributions surcharge that applies to the member for that year is the percentage (calculated to 5 decimal places) of the member's surchargeable contributions for that year worked out using the formula:

(Relevant adjusted taxable income - Lower income amount) / A


where A is:

(Higher income amount - Lower income amount) / (Maximum surcharge percentage * 100)


3. For the 2004-2005 financial year, A is worked out as follows:^[F2]

Higher income amount = $121,075

Lower income amount = $99,710

Maximum surcharge percentage = 13.5%

($121,075 - $99,710) / (0.135 * 100)


= $1,582.59259.

4. Although no legislative provision requires A to be rounded to a defined number of decimal places, the Australian Taxation Office calculates A to five decimal places. This approach allows for certainty and simplicity in the calculation while maintaining its accuracy. It is also consistent with the rounding of the first formula within subsection 5(1) of the SCTIA.

5. In a similar way, for the 2004-2005 financial year, the amount represented by A in the first formula contained within subsection 5(1) of the TPTIA is also $1,582.59259.^[F3]

6. For the 2003-2004 financial year, the amount represented by A in the first formula contained within subsection 5(1) of the SCTIA and subsection 5(1) of the TPTIA was $1,399.31034.

Date of effect

7. This Determination applies to the 2004-2005 financial year.

Commissioner of Taxation
18 June 2004

Not previously issued in draft form.

References

ATO references:
NO 2004/6292

Related Rulings/Determinations:

SCD 2004/1
SCD 2004/2
SCD 2004/3
SCD 2004/4

Subject References:
adjusted taxable income
financial year
higher income amount
lower income amount
maximum surcharge percentage
relevant adjusted taxable income
superannuation contributions surcharge
surchargeable contributions

Legislative References:
SCTIA 1997 5(1)
SCTIA 1997 5(1AA)
SCTIA 1997 5(3)
TPTIA 1997 5(1)
TPTIA 1997 5(1AA)