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Wednesday, 15 June 2011
Page: 2972

Superannuation

(Question No. 450)


Senator Cormann asked the Minister representing the Assistant Treasurer, upon notice, on 17 March 2011:

With reference to the changes to concessional superannuation caps and the answer to question on notice no. 367 (Senate Hansard, 3 March 2011, p. 1195):

(1) What is the number of individuals exceeding the concessional contributions caps, as per Table 1 in the answer to question on notice no. 367, broken down by the marginal income tax rate brackets for the each of the following financial years: (a) 2008-09; (b) 2009-10; and (c) 2010-11 (as an estimate).

(2) What percentage of the individuals who have breached the concessional contribution caps are defined benefit members.

(3) How does the Government propose to spend the excess contributions tax collected.

(4) How many of the individuals with excess contributions tax will be expected to pay the proposed flood levy.

(5) Given that in the answer to question on notice no. 367 says that the Government does not assume a rise in excess contributions tax, has there been an assumption elsewhere that the personal income tax collected will increase; if so, by how much.

(6) Are the costs of administering the excess contribution tax expected to continue to grow in the future; if so, what are the projected costs over the forward estimates.

(7) At what point is it expected that the costs of administering the system will outweigh the excess contributions tax.


Senator Sherry: The Assistant Treasurer has provided the following answer to the honourable senator's question:

(1) The number of individuals exceeding the concessional contributions caps, as per Table 1 in the answer to question on notice number 367 broken down by the marginal income tax rate brackets is as follows:

(a) Financial Year 2008-09

Table 1: Number of individuals potentially exceeding contribution caps in 2008-09 by marginal tax rate

Marginal Tax Rate

Concessional Cap

Non Concessional Cap

Both caps

0%

437

627

24

15%

2,086

1,612

90

30%

6,226

1,118

205

40%

8,798

624

194

45%

9,764

457

324

No Income tax return1

980

360

16

Total

28,291

4,798

853

1 Individuals in this category are those who either are not required to lodge a return or have an outstanding tax return. The ATO is following up these cases where required.

(b) Financial Year 2009-10

Table 2: Number of individuals potentially exceeding contribution caps in 2009-10 by marginal tax rate

Marginal Tax Rate

Concessional Cap

Non Concessional Cap

Both caps

0%

333

317

20

15%

2,103

922

46

30%

8,625

627

80

40%

17,409

328

96

45%

13,449

186

102

No Income tax return1

23,814

1,959

197

Total

65,733

4,339

541

1 Individuals in this category are those who still have to lodge their return in accordance with the Tax Agent Lodgment Program and those who either are not required to lodge a return or have an outstanding tax return. The ATO is following up these cases as required.

Note:

In the above tables, not all individuals identified as exceeding the contribution caps will receive an assessment. A number of cases will be subject to correction of reporting errors by funds. Additionally, the ATO takes a practical, risk based approach in relation to cases where the caps are exceeded by only a small amount.

Figures for 2009-10 will change as self managed super funds and some individuals are not required to lodge 2009-10 information until May and June of 2011.

(c) An estimate for 2010-11 is currently not available.

(2) The percentage of the individuals who have exceeded the concessional contribution caps that are defined benefit members is outlined in the below table.

Table 3: Percentage of individuals who have exceeded the concessional cap who are members of a defined benefit fund

Financial Year

% Defined Benefit Fund Members

%Hybrid Defined Benefit Fund Members

2007-08

1.0%

44.9%

2008-09

1.0%

44.1%

2009-10

1.7%

58.8%

Source: The defined benefit numbers shown in the table are ascertained by matching data from the Australian Prudential Regulation Authority Statistics - Superannuation fund-level profiles June 2010 (issued 27 January 2011) with excess contribution data.

Note: Hybrid defined benefits funds will have both a defined benefit and accumulation element (eg Commonwealth Superannuation Scheme). The ATO is unable to determine the proportion of members in the hybrid funds who would only receive defined benefits.

Information for 2010-11 financial year is not available and the ATO is unable to provide percentage figures at this time.

(3) Revenue is generally not hypothecated to spending. The excess contributions tax will become part of general revenue.

(4) This estimate has not been calculated.

(5) The net impact for 2009-10 and 2010-11 were made public as part of the 2010 11 Budget Estimates in Treasury’s written response to BET68. An electronic copy of this response can be found on the Australian Parliament House website, located at:

http://aph.gov.au/Senate/committee/economics_ctte/estimates/bud_1011/Treasury/answers/BET68.pdf

(6) It is not possible to provide projected forward estimates given the legislative detail for some measures are still being finalised, e.g. concessional contributions cap for those over 50.

(7) Excess contributions tax is an integrity measure to ensure the tax concessions provided to superannuation are both fiscally sustainable and targeted appropriately.