Superannuation (Government Co-contribution for Low Income Earners) Act 2003

6 Person in respect of whom Government co-contribution payable

A Government co-contribution is payable under this Act in respect of a person for an income year of the person if:

the person makes one or more eligible personal superannuation contributions during the income year; and

10% or more of the person’s total income for the income year is attributable to either or both of the following:

the person engaging in activities covered under subsection (2);

(ii) the person carrying on a business (within the meaning of the Income Tax Assessment Act 1997); and

the person’s total income for the income year is less than the higher income threshold; and

an income tax return for the person for the income year is lodged; and

the person’s non-concessional contributions for the financial year corresponding to the income year do not exceed the person’s non-concessional contributions cap for the financial year; and

immediately before the start of that financial year, the person’s total superannuation balance is less than the general transfer balance cap for that financial year; and

the person is less than 71 years old at the end of the income year; and

the person:

(i) is not the holder of a temporary visa under the Migration Act 1958 at any time in the income year; or

(ii) at all times when he or she holds such a temporary visa during the income year, is a New Zealand citizen or the holder of a visa prescribed for the purposes of subsection 20AA(2) of the Superannuation (Unclaimed Money and Lost Members) Act 1999.

A person engages in activities covered under this subsection if:

the person engages in any of these activities in the income year in which the person makes the contribution:

holding an office or appointment;

performing functions or duties;

engaging in work;

doing acts or things; and

(b) the activities result in the person being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that Act had not been enacted).

7 Contributions that attract matching Government co-contributions

(1) A contribution a person made or makes is an eligible personal superannuation contribution if:

the contribution was or is made on or after 1 July 2003 to:

a fund that is a complying superannuation fund in relation to the income year of the fund in which the contribution was or is made; or

an RSA the person holds; and

the contribution was or is made for the purpose of providing superannuation benefits for the person (regardless whether the benefits are payable to the person’s dependants if the person dies before or after becoming entitled to receive the benefits); and

the contribution is not any of the following:

(i) a roll-over superannuation benefit (within the meaning of the Income Tax Assessment Act 1997);

(ii) a superannuation lump sum that is paid from a foreign superannuation fund (within the meaning of the Income Tax Assessment Act 1997);

(iia) an amount transferred from a KiwiSaver scheme to a complying superannuation fund as mentioned in Income Tax Assessment Act 1997;section 312-10 of the

(iii) a directed termination payment (Income Tax (Transitional Provisions) Act 1997);within the meaning of section 82-10F of the

(iv) an amount transferred from a scheme mentioned in paragraph 290-5(c) of the Income Tax Assessment Act 1997.

(2) However, the contribution is an eligible personal superannuation contribution only to the extent that the Commissioner has not allowed the contribution as a deduction for the person.

8 Total income for income year

(1) The person’s total income for the income year is the sum of:

(a) the person’s assessable income for the income year, disregarding the person’s assessable FHSS released amount (within the meaning of the Income Tax Assessment Act 1997) for the income year; and

the person’s reportable fringe benefits total for the income year; and

(c) the total of the person’s reportable employer superannuation contributions (within the meaning of the Income Tax Assessment Act 1997) for the income year.

(1A) For the purposes of paragraph (1)(c) of this section, reduce (but not below zero) the reportable employer superannuation contributions by any excess concessional contributions (within the meaning of the Income Tax Assessment Act 1997) included in the person’s assessable income under paragraph 291-15(a) of that Act for the income year.

(2) However, the person’s total income for the income year is reduced by amounts (if any) for which the person is entitled to a deduction as a result of carrying on a business (within the meaning of the Income Tax Assessment Act 1997).

Subsection (2) does not apply for the purposes of paragraph 6(1)(b).

9 Basic rule—Government co-contribution matches personal contributions

The amount of the Government co-contribution in respect of a person for an income year is:

for the 2003-04 income year—an amount equal to the sum of the eligible personal superannuation contributions the person makes during the income year; and

for the 2004-05 income year, the 2005-06 income year, the 2006-07 income year, the 2007-08 income year or the 2008-09 income year—an amount equal to 150% of the sum of the eligible personal superannuation contributions the person makes during the income year; and

for the 2009-10, 2010-11 and 2011-12 income years—an amount equal to the sum of the eligible personal superannuation contributions the person makes during the income year; and

for the 2012-13 income year or a later income year—an amount equal to 50% of the sum of the eligible personal superannuation contributions the person makes during the income year.

Subsection (1) has effect subject to sections 10, 10A, 11, 12, 21, 22 and 23.

10 Taper based on total income for the income year

The amount of the Government co-contribution in respect of a person for the 2003-04 income year must not exceed the maximum amount worked out using the following table:

The amount of the Government co-contribution in respect of a person for the 2004-05 income year, the 2005-06 income year, the 2006-07 income year, the 2007-08 income year or the 2008-09 income year must not exceed the maximum amount worked out using the following table:

The amount of the Government co-contribution in respect of a person for the 2009-10 income year, 2010-11 income year or 2011-12 income year must not exceed the maximum amount worked out using the following table:

The amount of the Government co-contribution in respect of a person for the 2012-13 income year or a later income year must not exceed the maximum amount worked out using the following table:

Subsections (1), (1A), (1B) and (1C) have effect subject to sections 10A, 11, 12, 21, 22 and 23.

10A Increases in lower and higher income threshold

This section provides for:

indexation of the lower income threshold for the 2007-08 income year and later income years (apart from the 2010-11, 2011-12 and 2012-13 income years); and

increases in the higher income threshold for the 2007-08 income year and each later income year (apart from the 2010-11, 2011-12 and 2012-13 income years) equal to the indexation increase in the lower income threshold for that year.

(2) The lower income threshold for an income year is:

for the 2003-04 income year—$27,500; or

for the 2004-05 income year or a later income year before the 2007-08 income year—$28,000; or

for the 2007-08 income year—$28,000 multiplied by the indexation factor for that income year; or

for a later income year—the amount of the lower income threshold for the previous income year multiplied by the indexation factor for that later income year.

(3) The higher income threshold for an income year is:

for the 2003-04 income year—$40,000; or

for the 2004-05 income year or a later income year before the 2007-08 income year—$58,000; or

for the 2007-08 income year or a later income year before the 2012-13 income year—the sum of:

the lower income threshold for that income year; and

$30,000; or

for the 2012-13 income year or a later income year—the sum of:

the lower income threshold for that income year; and

$15,000.

If the lower income threshold for an income year is an amount of dollars and cents:

if the number of cents is less than 50—the lower income threshold is to be rounded down to the nearest whole dollar; or

otherwise—the lower income threshold is to be rounded up to the nearest whole dollar.

(5) The indexation factor for an income year is the number calculated, to 3 decimal places, using the formula:

where:

current year means the period of 12 months ending on 31 December immediately before the income year for which the lower income threshold is being calculated.

index number, for a quarter, means the estimate of full-time adult average weekly ordinary time earnings for the middle month of the quarter published by the Australian Statistician.

previous year means the period of 12 months immediately before the current year.

(5A) Despite subsection (5), the indexation factor for the 2010-11, 2011-12 and 2012-13 income years is 1.

If the number calculated under subsection (5) for a financial year would, if it were worked out to 4 decimal places, end with a number greater than 4, the number so calculated is increased by 0.001.

If at any time, whether before or after the commencement of this Act, the Australian Statistician has published or publishes an index number for a quarter in substitution for an index number previously published for the quarter, the publication of the later index number is to be disregarded.

The Commissioner must publish before, or as soon as practicable after, the start of the 2007-08 income year, and before the start of each later income year, the lower income threshold and the higher income threshold for the income year.

11 Minimum Government co-contribution

If the amount of the Government co-contribution in respect of a person for an income year, as calculated under sections 9 and 10 would be less than $20, the amount of the co-contribution is to be increased to $20.

12 Government co-contribution increased by interest amount if paid late in certain circumstances

The amount of the Government co-contribution in respect of a person for an income year is increased by the amount of interest worked out under subsection (2) if the Commissioner pays none of the Government co-contribution on or before the payment date for the co-contribution.

The interest is to be calculated:

on the amount of the Government co-contribution; and

for the period from the payment date for the Government co-contribution until the day on which the Commissioner first pays an amount in satisfaction of the Government co-contribution; and

on a daily basis; and

at the base interest rate for the day on which the interest is calculated.

12A Amount of the Government co-contribution for 2005-06 income year

This section applies for the purposes of working out the amount of the Government co-contribution in respect of a person for the 2005-06 income year.

Despite sections 9, 10, 10A and 11, that amount is double the amount worked out under those sections in respect of the person for the 2005-06 income year.

Subsection (2) has effect subject to sections 12, 21, 22 and 23.

For the purposes of working out an amount of interest under section 12, 21 or 22 in relation to the Government co-contribution in respect of a person for the 2005-06 income year:

disregard subsection (2); and

treat an amount paid by the Commissioner as not including any amount paid by the Commissioner because of subsection (2).

19 Underpayment determinations

This section applies if the Commissioner:

pays an amount by way of Government co-contribution in respect of a person for an income year; and

is satisfied that the amount paid is less than the correct amount of the co-contribution.

(2) The amount by which the correct amount exceeds the amount paid is the underpaid amount.

The Commissioner must determine that the underpaid amount is to be paid in respect of the person for the income year.

If the Commissioner makes a determination under subsection (3), the Commissioner must determine whether the underpaid amount is to be paid:

to the trustee of a complying superannuation fund for crediting to an account of the person within that fund; or

to the provider of an RSA that the person holds for crediting to the RSA; or

to the person; or

to the person’s legal personal representative; or

into an account of the person in the Superannuation Holding Accounts Special Account.

If the Commissioner makes a determination under paragraph (4)(a) or (b), the Commissioner must also determine which particular account the underpaid amount is to be paid into.

The Commissioner must make determinations under subsections (4) and (5) in accordance with the regulations made for the purposes of this section.

The Commissioner may revoke a determination made under this section if the Commissioner is satisfied that:

payment of the underpaid amount cannot be effected in accordance with the determination; or

it is otherwise appropriate in the circumstances to revoke the determination.

The regulations may prescribe the time within which determinations under this section are to be made.

The Commissioner must, in accordance with the determinations made under this section, pay the underpaid amount on or before the payment date for the underpaid amount.

20 Superannuation provider to return underpaid amount that cannot be credited to account

If:

the underpaid amount in respect of a person is paid:

to the trustee of a complying superannuation fund for crediting to an account of the person within that fund; or

to the provider of an RSA that the person holds for crediting to the RSA; and

the trustee or the provider has not credited the underpaid amount to an account of that kind by the end of the 28th day after the day on which the co-contribution was paid to the trustee or the provider;

the trustee or the provider:

is liable to repay the underpaid amount to the Commonwealth; and

must give the Commissioner a statement, in the approved form, in relation to the underpaid amount at the time when the underpaid amount is repaid.

Note: Section 25 provides for the imposition of general interest charge if the underpaid amount is not repaid within a certain period.

The Commissioner may recover from the trustee or provider the amount the trustee or provider is liable to repay under subsection (1) as a debt due to the Commonwealth.

The trustee or provider commits an offence if the trustee or provider fails to give the Commissioner a statement, in the approved form, in relation to the underpaid amount at the time when the underpaid amount is repaid.

Penalty: 50 penalty units.

An offence against subsection (3) is an offence of strict liability.

21 Government co-contribution increased by interest amount if underpaid amount paid late in certain circumstances

The amount of the Government co-contribution in respect of a person for an income year is increased by the amount of interest worked out under subsection (3) if the Commissioner does not pay the underpaid amount in full on or before the payment date for the underpaid amount.

The payment date for the underpaid amount is to be worked out in accordance with the regulations.

The interest is to be calculated:

on the underpaid amount that remains unpaid on the payment date for the underpaid amount; and

for the period from the payment date for the underpaid amount (see subsection (2)) until the day on which the underpaid amount is paid in full; and

on a daily basis; and

at the base interest rate for the day on which the interest is calculated.

22 Government co-contribution increased by interest amount if underpaid amount due to administrative error

This section applies if:

the Commissioner makes a determination under section 19 that an underpaid amount is to be paid in respect of a person for an income year; and

the determination is made on the basis that a particular amount is the correct amount of the Government co-contribution payable in respect of the person for the income year; and

the determination is necessary to correct an administrative error.

(2) The payment shortfall is the difference between:

the amount referred to in paragraph (1)(b); and

(b) the sum of the amounts that have already been paid by way of Government co-contribution in respect of the person for the income year before the determination under .section 19 is made

The amount of the Government co-contribution in respect of the person for the income year is increased by the amount of interest worked out under subsection (4).

The interest is to be calculated:

on the amount of the payment shortfall; and

for the period from the payment date for the Government co-contribution (see subsection 17(2)) until the payment date for the underpaid amount (see subsection 21(2)); and

on a daily basis; and

at the base interest rate for the day on which the interest is calculated.

The regulations:

may provide that an error of a kind specified in the regulations is an administrative error for the purposes of this section; and

may provide that an error of a kind specified in the regulations is not an administrative error for the purposes of this section.

23 Small underpayments

If:

the Commissioner makes a determination under section 19 in relation to a Government co-contribution in respect of a person for an income year; and

the underpaid amount is less than $5; and

the underpaid amount is to be paid by cheque to:

the person; or

the person’s legal personal representative;

the amount of the co-contribution is increased by the difference between $5 and the underpaid amount.

24 Recovery of overpayment of Government co-contribution in respect of a person

This section applies if:

the Commissioner pays an amount by way of Government co-contribution in respect of a person for an income year; and

either:

the co-contribution was not payable in respect of the person for the income year; or

the amount paid is more than the correct amount of the co-contribution.

(2) The amount overpaid is:

the whole of the amount referred to in paragraph (1)(a) if the co-contribution was not payable in respect of the person for the income year; or

the amount by which the amount paid exceeds the correct amount if the amount paid is more than the correct amount of the co-contribution.

The Commissioner may take action to recover the amount overpaid under one or more of the items in the following table but may only take action under an item if the conditions (if any) specified for that item are satisfied:

Note: Section 25 provides for the imposition of general interest charge if an amount that the person must pay under a notice given to the person under item 3 or 4 of the above table is not repaid within a certain period.

If:

the Commissioner gives a superannuation provider a notice under item 4 of the table in subsection (3) in relation to an amount overpaid in respect of a person; and

the provider holds one or more Government co-contributions in respect of the person at the time when the Commissioner gives the provider the notice;

the Commissioner may recover from the provider under that item whether or not the provider continues to hold the contribution or contributions after that time.

The Commissioner may revoke a notice given under item 3 or 4 of the table in subsection (3) if the Commissioner is satisfied that it is appropriate in the circumstances to do so.

The total of the amounts deducted, debited or recovered under subsection (3) in relation to an overpayment must not exceed the amount overpaid.

If the Commissioner makes:

a deduction under item 1 of the table in subsection (3); or

a debit under item 2 of the table;

in relation to a Government co-contribution in respect of a person, the Commissioner must give the person the prescribed information in relation to the deduction or debit within 28 days after the deduction or debit is made.

32 Records to be kept and retained by superannuation provider

Superannuation provider to keep records

A superannuation provider commits an offence if the provider fails to keep records that record and explain all transactions and other acts the provider engages in, or is required to engage in, under this Act or the regulations.

Penalty: 30 penalty units.

How records to be kept

The superannuation provider commits an offence if the records are not either:

kept in writing in the English language; or

kept so as to enable the records to be readily accessible and convertible into writing in the English language.

Penalty: 30 penalty units.

Period for retention of records

A superannuation provider commits an offence if the provider fails to retain any records kept or obtained under or for the purposes of this Act until the later of:

the end of 5 years after they were prepared or obtained; and

the completion of the transactions or acts to which those records relate.

Penalty: 30 penalty units.

When records need not be kept

Subsections (2) and (3) do not apply if:

the Commissioner has notified the superannuation provider that the retention of the records is not required; or

the superannuation provider is a company that has gone into liquidation and been finally dissolved.

Note: In a prosecution for an offence against subsection (2) or (3), the defendant bears an evidential burden in relation to the matters in this subsection (see subsection 13.3(3) of the Criminal Code).

33 When an infringement notice can be served

Subject to subsection (2), the Commissioner may cause an infringement notice to be served on a superannuation provider in accordance with this Division if the Commissioner has reasonable grounds to believe that the superannuation provider has committed an offence against:

subsection 16(3); or

subsection 20(3).

An infringement notice must not relate to more than one offence unless:

the offences are:

an offence constituted by refusing or failing to comply with a requirement before a specified time or within a specified period; and

one or more daily offences constituted by refusing or failing to comply with the requirement after that time or period; or

the offences are 2 or more daily offences constituted by refusing or failing to comply with the same requirement after the time before which, or the end of the period within which, the requirement was to be complied with.

Note: For daily offences, see Crimes Act 1914.section 4K of the

An infringement notice does not have any effect unless it is served within one year after the day on which the offence or the earlier or earliest of the offences is alleged to have been committed.

34 Matters to be included in an infringement notice

An infringement notice must:

state the name of the person on whom it is to be served; and

state that it is being served on behalf of the Commissioner; and

state:

the nature of the alleged offence or offences; and

the time (if known) and date on which, and the place at which, the offence or the earlier or earliest of the offences is alleged to have been committed; and

the maximum penalty that a court could impose for the alleged offence or offences; and

specify a penalty that is payable under the notice in respect of the alleged offence or offences; and

state that, if the person does not wish the matter to be dealt with by a court, the person may pay to the Commissioner the amount of the penalty specified in the notice within 28 days after the date of service of the notice; and

state that the person may make written representations to the Commissioner seeking the withdrawal of the notice.

Note: The Commissioner has power to extend periods stated in notices under paragraph (1)(e) (see section 39).

An infringement notice may contain any other matters that the Commissioner considers necessary.

The penalty to be specified in an infringement notice under paragraph (1)(d) is 20% of the maximum amount of the fine or fines that a court could impose for the offence or offences.

35 Withdrawal of infringement notice

A person on whom an infringement notice has been served may make written representations to the Commissioner seeking the withdrawal of the notice.

The Commissioner may withdraw an infringement notice served on a person (whether or not the person has made representations seeking the withdrawal) by causing written notice of the withdrawal to be served on the person within the period within which the penalty specified in the infringement notice is required to be paid.

The matters to which the Commissioner may have regard in deciding whether or not to withdraw an infringement notice include, but are not limited to, the following:

whether the person has previously been convicted of an offence for a contravention of this Act;

the circumstances in which the offence or offences specified in the notice are alleged to have been committed;

whether the person has previously been served with an infringement notice in respect of which the person paid the penalty specified in the notice;

any written representations made by the person.

If:

the person pays the penalty specified in the infringement notice within the period within which the penalty is required to be paid; and

the notice is withdrawn after the person pays the penalty;

the Commissioner must refund to the person, out of money appropriated by the Parliament, an amount equal to the amount paid.

36 What happens if penalty is paid

This section applies if:

an infringement notice is served on a person; and

the person pays the penalty specified in the notice before the end of the period referred to in paragraph 34(1)(e); and

the infringement notice is not withdrawn.

Any liability of the person for the offence or offences specified in the notice, and for any other offence or offences constituted by the same omission, is taken to be discharged.

Further proceedings cannot be taken against the person for the offence or offences specified in the notice and proceedings cannot be taken against the person for any other offence or offences constituted by the same omission.

The person is not regarded as having been convicted of the offence or offences specified in the notice.

37 More than one infringement notice may not be served for the same offence

This Division does not permit the service of more than one infringement notice on a person for the same offence or offences.

38 Infringement notice not required to be served

This Division does not:

require an infringement notice to be served on a person in relation to an offence; or

affect the liability of a person to be prosecuted for an offence if:

an infringement notice is not served on the person in relation to the offence or in relation to any other offence constituted by the same omission; or

an infringement notice served on the person in relation to the offence or in relation to any other offence constituted by the same omission has been withdrawn; or

affect the liability of a person to be prosecuted for an offence if the person does not comply with an infringement notice served on the person in relation to the offence or in relation to any other offence constituted by the same omission; or

limit the amount of the penalty that may be imposed by a court on a person convicted of an offence.

39 Commissioner may extend period for payment of penalty

The Commissioner may, by writing, extend, in relation to a particular person, the period referred to in paragraph 34(1)(e).

The power of the Commissioner under subsection (1) to extend the period may be exercised before or after the end of the period.

If the Commissioner extends a period under subsection (1), a reference in this Division, or in a notice or other instrument under this Division, to the period is taken, in relation to the person, to be a reference to the period as so extended.

46 Commissioner to have general administration of the Act

The Commissioner has the general administration of this Act.

Note: An effect of this provision is that people who acquire information under this Act are subject to the confidentiality obligations and exceptions in Taxation Administration Act 1953.Division 355 in Schedule 1 to the

47 Decisions to be in writing

A decision of the Commissioner under this Act or the regulations must be in writing.

Such a decision is taken to be in writing if it is made, or recorded, by means of a computer.

48 Commissioner may arrange for use of computer programs to make decisions

The Commissioner may arrange for the use, under the Commissioner’s control, of computer programs for any purposes for which the Commissioner may make decisions under this Act or the regulations.

A decision made by the operation of a computer program under an arrangement made under subsection (1) is taken to be a decision made by the Commissioner.

49 Review of decisions

(1) A person affected by a decision (the original decision) made by the Commissioner under Part 2, 2A, 3, 4 or 5 may apply to the Commissioner for review of the decision.

If the person does so, the Commissioner must either:

review the original decision and decide to:

affirm it; or

vary it; or

set it aside and substitute a new decision; or

arrange for an authorised review officer (see section 50) to do so.

In making arrangements for a review under subsection (2), the Commissioner must have regard to the need for the review to be an independent one.

50 Authorised review officers

The Commissioner must authorise taxation officers to be authorised review officers for the purposes of this Division.

51 Withdrawal of review applications

An applicant for review under the Commissioner, withdraw the application at any time before the decision reviewer does any of the things in subsection 49(2).section 49 may, in writing or in any other manner approved by

If an application is so withdrawn, it is taken never to have been made.

52 Tax file numbers

The Commissioner may use for the purposes of this Act, or the regulations, a tax file number that has been provided for any other purpose under a law relating to taxation or superannuation.

54 Reports

After the end of each quarter the Commissioner must give the Minister a report, for presentation to the Parliament, on the working of this Act during the quarter. The report must include, for the quarter to which the report relates, the prescribed details about beneficiaries of, and amounts of, Government co-contributions.

After the end of each financial year the Commissioner must give the Minister a report, for presentation to the Parliament, that:

is on the working of this Act during the financial year; and

includes, for the financial year to which the report relates, the prescribed details about beneficiaries of, and amounts of, Government co-contributions; and

specifies, for each prescribed range of total income, the number of beneficiaries of a Government co-contribution for the financial year whose total income that was used to determine the amount of their Government co-contribution fell within that range; and

specifies, for each prescribed range of taxable income, the number of people who the Commissioner is satisfied:

were, at the end of the financial year, the spouse of a beneficiary of a Government co-contribution for the financial year; and

had a taxable income for that financial year that fell within that range; and

specifies the number of beneficiaries of Government co-contributions for the financial year who the Commissioner was not satisfied had a spouse at the end of the financial year; and

specifies the number of people:

who the Commissioner is satisfied were, at the end of the financial year, the spouse of a beneficiary of a Government co-contribution for the financial year; and

whose taxable income for the financial year was not able to be determined by the Commissioner.

In this section:

spouse of a beneficiary of a Government co-contribution includes:

(a) a person (whether of the same sex or a different sex) with whom the beneficiary is in a relationship that is registered under a law of a State or Territory prescribed for the purposes of Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; andsection 2E of the

a person who, although not legally married to the beneficiary, lives with the beneficiary on a genuine domestic basis in a relationship as a couple.

taxable income has the meaning given by section 4-15 of the Income Tax Assessment Act 1997.