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Occupational Superannuation Laws Amendment Bill 1991

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House: House of Representatives

Portfolio: Treasury


To clarify the position where the proposed levy that is to accompany the annual return required to be lodged by superannuation funds and approved deposit funds is not paid and to introduce the collection provisions for the proposed levy contained in the Superannuation Supervisory Levy Bill 1991.


The Insurance and Superannuation Commission (ISC) issues standards that must be complied with for superannuation funds and approved deposit funds to be eligible for concessional tax treatment. The operating standards deal with such matters as who can contribute; the vesting of benefits; the preservation of benefits; and various financial aspects of the fund. The funds are required to submit an annual return to the ISC and the ISC is to give the fund a notice stating whether the conditions have been complied with and detailing rights of appeal. Under sections 12, 14 and 15B of the Occupational Superannuation Standards Act 1987 (the Principal Act) the annual returns are to be accompanied by the prescribed application fee (currently a flat $40). If the fee is not paid there is no obligation on the ISC to issue a notice, although sections 13, 15, and 15C of the Principle Act give the ISC a discretion to issue a notice if no return was received, or the return was received but the ISC was not satisfied that the standards were met, if subsequently satisfied that the standards have been met. The situation where a return is sent but no fee paid is not precisely dealt with.

The proposal to introduce a fee based on the assets of the fund is estimated in the explanatory memorandum to raise $6 to $8 million per year, compared to an estimated $3.6 million if the current fee of $40 applied. The decision to introduce the levy was announced in the 1990 Budget. The levy to be introduced by this Bill and the Superannuation Supervisory Levy Bill 1991 should not be confused with the proposal to impose a levy on life insurance companies due to difficulties with Regal Life and Occidental Life, which is opposed by the industry.

Main Provisions

Clause 13 will amend section 12 of the Principal Act. The amendments will provide that the notice of satisfaction of the standards can be issued without the levy being paid. However, the Commissioner will have a discretion to refuse to issue such a notice if the levy has not been paid.

Section 13 will be amended to remove references to fees now that the discretionary power to provide a notice without the levy being paid is contained in section 12 (clause 14).

Clauses 15 and 16 will amend sections 14 and 15, which deal with approved deposit funds, to achieve the same results as clauses 13 and 14. Similarly, clauses 17 and 18 will amend sections 15B and 15C, which deal with pooled superannuation funds, to achieve these results.

A new Part IIIAA, which deals with the collection of the levy, will be inserted into the Principal Act by clause 20. Trustee's who lodge a return will be liable for the levy (proposed section 15DA) which will be payable on the lodgment of the return (proposed section 15DB). Where the levy remains unpaid at the beginning of the first month after it was due a penalty will be payable. The monthly penalty will be the larger of the amounts calculated in accordance with the formulas contained in proposed section 15DC). These are based on the unpaid levy; the basic levy amount (this is defined in the Superannuation Supervisory Levy Bill 1991) and the minimum basic levy amount (this is related to the basic levy amount). Proposed section 15DF will allow the Commissioner to remit part or all of the late payment penalty.

The amendments will apply to returns lodged after commencement (the date of Royal Assent - clause 2) for the 1990-91 and later financial years ( clause 26).

Section 51 of the Income Tax Assessment Act 1936 will be amended by clause 4 to provide that late payment penalties under the Superannuation Supervisory Levy Bill 1991 will not be deductible.

Bills Digest Service 12 March 1991

Parliamentary Research Service

For further information, if required, contact the Economics and Commerce Group on 06 2772460.

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1991

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Published by the Department of the Parliamentary Library, 1991.