|
|||
|
|||
|
|
| 2007-08 |
2008-09 |
2009-10 |
2010-11 |
2011-12 |
|---|---|---|---|---|
| Nil |
$251m |
$378m |
$299m |
$224m |
The explanatory memorandum notes that, in relation to Commonwealth implementation costs, provisions, for costs of $10 million per annum for the Australian Taxation office (ATO) and $2 million per annum for the Department of Immigration and Citizenship (DIAC) over the forward estimates period were made in the 2007-08 Mid-Year Economic and Fiscal Outlook. [9] Similarly, it notes that:
Superannuation funds are estimated to, on average, have implementation costs of $33,000 per provider and ongoing annual costs of $2,500 per provider.[10]
There were over 239,152 temporary resident visas granted with work rights and over 87,300 business long-stay ‘457 visas’ issued in the financial year ending in June 2007,[11] and the quantum of temporary visa has been increasing.
For the temporary residents who did not take back their superannuation amount at the time of departure from Australia, this Bill would result in their unclaimed superannuation balance to be transferred to the ATO after six continuous months from the day of departure. And hence, the ATO will be authorised to issue a notice to relevant superannuation funds to comply with the provisions of this legislation.
Departed temporary residents will be able to claim, for an indefinite period, their superannuation benefits less the DASP tax, back from the ATO.
Upon notice from the Commissioner, the provider agency of superannuation to departed temporary residents will have to pay that superannuation to the Commissioner.
In the process, the Government expects that this bill will assist to reduce the number of small and lost accounts relieving the burden from superannuation funds to manage ever increasing number of such accounts.
The Bill will require the ATO to implement a system to match those individuals identified by the DIAC as departed temporary visa holders with account information provided by superannuation funds, and then will notify superannuation funds about the status.
The ATO will pay individuals (or their legal personal representatives) where amounts are claimed late, and roll over amounts into a superannuation fund if directed by the claimants.
The DIAC will identify those individuals who are to be considered for the purpose of notification by the ATO to the relevant superannuation agencies.
Under the provisions of the current law, the superannuation of a departed temporary visa holder who does not take a DASP upon departure remains in the fund until it is claimed or becomes payable to the Commissioner as unclaimed money (eg., reached age 65, no contributions received and no contact). The departed temporary visa holder can later claim the amount back from the Commissioner.
Under the provisions of the proposed law, the superannuation of a departed temporary visa holder, who does not take a DASP upon departure, could be paid to the Commissioner as unclaimed superannuation. The departed temporary visa holder can later claim back the amount from the Commissioner.
For the purpose of Part 3A of the S(UMLM) Act, several new concepts are inserted into the definition provision at section 8.
Items 5-7 and 9-12 deal with the amendment of Part 3A of the S(UMLM) Act, with the insertion of new concepts at section 8 of the S(UMLM) Act. The meaning of concepts including approved form, engage in conduct, general interest charge, leave Australia, legal personal representative, schedule statement day, superannuation interest, and terminal medical condition are in general associated with the duties and obligations of superannuation funds in terms of submission of statement and payments for a departed temporary resident from Australia.
Item 13-15 deal with the insertion of new subsections 16(7), 17(2A) and a note into subsection 17(1) of the S(UMLM) Act in respect of the submission of statements to the Commissioner of ‘unclaimed money’ with a superannuation provider. Under subsection 12(1) of the S(UMLM) Act (member reached age 65) and section 16 of the S(MULM) Act, a person is not required to specify an amount in a statement for the purposes of section 17 of the S(UMLM) Act and paying the amount thereof. These amendments waive the obligation to submit another statement under section 16 of the S(UMLM) Act or to transfer the money under section 17, suggesting that the provider will not commit an offence under subsections 16(5) and 17(6) of the S(UMLM) Act in complying with Part 3A of the S(UMLM) Act. The Commissioner’s requirement to make a payment under Part 3A and not under section 17 of the S(UMLM) Act has been suggested for the money received by the Commissioner under both section 17 and Part 3A of the S(UMLM) Act.
Item 16 inserts new sections 20A –20P into the S(UMLM) Act. These provisions deal with the Commissioner’s notice to a superannuation provider asking for a statement; making payment to the Commissioner by a certain time; encompass how, when and under what circumstances a superannuation provider identifies a temporary visa holder; and when it withdraws an identity provided under section 20C of the S(UMLM) Act.
For instance, proposed section 20C of the Bill deals with notice under Part 3A of the S(UMLM) Act requires the Commissioner to give a written notice (section 20C notice) to a superannuation provider for a fund identifying a person, if the Commissioner is satisfied that all of the circumstances exist:
In general terms, once a provider receives a notice from the Commissioner under proposed section 20C of the S(UMLM) Act, it is required to give a statement and make a payment to the Commissioner by a certain time.
The Commissioner, however, is not required to give a notice under section 20C of the S(UMLM) Act (even where all the circumstances mentioned above exist) to a superannuation provider that is either:
The Commissioner must revoke a notice given to a superannuation provider under proposed section 20C if the Commissioner is satisfied that the notice should never have been given to the provider in the first place for a person (ie, the circumstances for giving the notice did not exist in the first place); or the circumstances relating to a person have changed since the time the notice was given (ie, the circumstances for giving the notice no longer exist)(proposed section 20J).
The proposed new section 20D of the Bill deals with a superannuation providers’ requirement to give statements and make payments to the Commissioner (following receipt of a notice under proposed section 20(C) of the S(UMLM) Act) in the approved form and by the required time (proposed sections 20(D) and 20(E)). The statement must be given to the Commissioner by the end of the next scheduled statement day after the notice which the statement relates to was given.
The proposed new section 20E of the Bill requires a superannuation provider that received a notice under proposed section 20C from the Commissioner to give the statement in the approved form, and to provide it by the next scheduled statement day after 28 days have passed. The nature of the required information must be relevant to the superannuation interest in the fund of the person identified in the notice and /or to the administration of Part 3A of the S(UMLM) Act and related tax legislation.
The proposed new section 20F of the Bill requires a superannuation provider that receives a section 20C notice from the Commissioner which has not been revoked could be required to make payments to the Commissioner in respect of the person identified in the notice. The amount payable by the provider to the Commissioner is the difference between the starting amount, and the total of the amounts that have already been paid or are payable by the provider in respect of the person.
The proposed new section 20G of the Bill discharges superannuation providers from further liability to the temporary resident, once it has made payments of the whole amount to the Commissioner that is payable by the time under Part 3A of the S(UMLM) Act.
Generally, if the Commissioner has received an amount under the S(UMLM) Act for a person and the person was a departed temporary visa holder, then those amounts can be claimed back (subject to any withholding tax that may apply). The proposed new section 20H of the Bill authorises the Commissioner to pay an amount in respect of a person to the person, or to a single fund (if the person so directs and if the Commissioner is satisfied they are an Australian citizen, New Zealand citizen or the holder of a permanent visa or a visa prescribed by the Regulations). This authority is exercisable either on application by the person, or at the Commissioner’s own initiative.
If a superannuation provider makes a payment because of a notice under section 20C of the S(UMLM) Act in respect of a person, and the Commissioner is satisfied that the amount paid exceeded the amount that was payable (if any) in connection with the notice in respect of the person, the proposed new Section 20K of the Bill underlines the obligation of the Commissioner to refund the excess to the provider of the originating fund (or to the provider of the successor fund if the original fund no longer exists). Similarly, accidental overpayments made to departed temporary residents under proposed section 20H are recoverable (proposed section 20L).
If the Commissioner makes a payment in respect of a person on the direction of the person to a fund, and the superannuation provider of that fund has not credited the payment to an account within 28 days after the payment was made, the proposed new Section 20M of the Bill requires that the superannuation provider must return that payment to the Commissioner.
The proposed new section 20N introduces a disclosure regime under part 3A of the S(UMLM) Act allows for the disclosure of migration and citizenship information by central agencies for the purposes of administrating the measure. The relevant agencies, in today’s terms, are the Department of Immigration and Citizenship and the Australian Taxation Office.
The proposed new section 20P of the Bill provided a mechanism to settle disputes arising out of a decision relating to a payment under section 20H of the S(UMLM) Act, including the amount paid by the Commissioner and/or destination of the payment. A ‘person’ includes the person to whom the amount belongs, the person’s legal representative, or a beneficiary. The section refers to Part IVC of the Taxation Administration Act 1953 which sets out the procedures for dispute resolution for taxation decisions.
The proposed new section 25A of the Bill (item 18) authorises the Commissioner to quote the tax file number of a person and of the fund while giving notice to a superannuation provider under section 20C of the S(UMLM) Act. Proposed new subsection 25(2A) (item 17) allows a statement in the approved form from a provider to the Commissioner to contain the tax file number of the provider, of the fund and of the person identified in a notice under section 20C of the S(UMLM) Act (if it was quoted to the provider or in the notice). Under the provision of new paragraph 29(1)(aa) (item 20), the Commissioner can request the tax file number of a person to be quoted for the purpose of administering the S(UMLM) Act or Superannuation (Unclaimed money and Lost Members) Regulations 1999 (Regulations) from someone who claims to be entitled to a payment under the S(UMLM) Act, someone who claims to be a lost member or someone who claims to be entitled to a payment under the S(UMLM) Act and a lost member.
However, the amendment to subsection 29(4) (item 21) allows the person, who refuses to provide tax file number to the Commissioner, not to be prevented from receiving payment (if any) that is payable under Part 3A of the S(UMLM) Act.
Item 22 (the new section 49 of the Bill) issues a clarification that the money paid to the Commissioner under the S(UMLM) Act is not held on trust by the Commissioner and it is not special public money under the Financial Management and Accountability Act 1997.
Items 23-27 amend the TAA on the tax treatment, penalty provisions and taxation objections against a notice under proposed section 20C of the S(UMLM) Act and under the relevant provisions in Part 3A of the S(UMLM) Act. The provisions also represent the amendment to the tax-free treatment of a payment by the Commissioner to a fund as a roll-over superannuation benefit, identifying it as included in the ‘contribution segment’ of the superannuation interest in the receiving fund, and thus treating it as tax free component of the interest. The non-inclusion of this payment in the assessable income of the receiving fund would ensure that an amount which is already subject to the DASP withholding tax is not further taxed when it is paid by a fund as a superannuation benefit from the interest.
Items 28-35 and 37 amend the ITAA to ensure that a payment from the Commissioner under section 20H of the S(UMLM) Act is a superannuation benefit under ITAA; the ITAA sets out how to work out the tax-free component and the taxable component of the payment that is a superannuation benefit. Under the TAA, amounts that are payable or repayable to the Commissioner by a provider under Part 3 of the S(UMLM) Act are a tax-related liability, whereby a general interest charge accrues on any unpaid amount after the time the payment becomes due and payable. The rules to work out the tax components of a superannuation benefit that is a payment from the Commissioner under section 20H of the S(UMLM) Act are set out under Subdivision 307-C of the ITAA. Like any other superannuation benefit, a payment from the Commissioner can consist of a ‘tax-free component’, and a ‘taxable component’.
Except for the ASFA and CSA, there are no outright objections recorded against the Bill by any other stakeholders, nor by any of the non-government political parties.
There are certain sensitivities involved with the superannuation agencies, especially with the implementation of the ATO system of reporting by the superannuation providers given the concerns raised by them with respect to compliance costs. These issues should be given full consideration to ensure that compliance costs are kept at a reasonable level commensurate with the policy objectives of the legislation.
[1]. Temporary Residents and Superannuation, Consultation Paper, May 2008, Commonwealth of Australia, p 1, See: http://www.treasury.gov.au/documents/1374/PDF/Temporary_Residents_and_Superannuation.pdf
[2]. Senator the Hon Nick Sherry ‘Payment of Temporary Residents’ Superannuation to the Australian government’ Media release 5 May 2008.
[3] Payment of Temporary Residents’ Superannuation to the Australian Government, the Association of Superannuation Funds of Australia, Submissions, 26 May 2008
[4] Payment of Temporary Residents’ Superannuation to the Australian Government, the Association of Superannuation Funds of Australia, Submissions, 26 May 2008
[5] ibid, p. 7
[6].
See Lumb and Moens’ The Constitution of the Commonwealth of Australia,
7th ed. 2007,
pp. 183–184.
[7] Submission of Temporary Residents and Superannuation, Corporate Super Association, May 2008
[8] Explanatory Memorandum, Temporary Residents’ Superannuation Legislation Amendment Bill 2008, p. 9
[9] ibid, p. 9.
[10]. ibid.
[11]. ibid.
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