New Bill to Introduce Superannuation Amendments

The federal government introduced a new bill in the House of Representatives on 1 March 2012 entitled the Tax and Superannuation Laws Amendment (2012 Measures No. 1) Bill (the Bill).  The Bill seeks to amend various superannuation and taxation laws and places further obligations on employers regarding payslip reporting.

The following comprises a summary of the Bill’s major amendments.  Note, the Bill is still being debated before the House of Representatives, so the following is not law yet.

Payslip reporting

The Bill requires employers to print on an employee’s payslip the amount of superannuation contribution that will be paid and the date by which the employer expects to pay the superannuation contribution to the relevant fund — this new requirement is in line with regulation 3.46 of the Fair Work Regulations 2009.

Disclosure of superannuation information

The Australian Taxation Office (ATO) will be permitted to disclose an individual’s superannuation interests and benefits to a regulated superannuation fund, a public sector superannuation scheme, an approved deposit fund or a retirement savings account provider.  The ATO will be able to provide the information without the individual’s consent.  The Bill’s explanatory memorandum states the purpose is to allow funds to assist and enable individuals to consolidate their superannuation interests.

Refund of excess contributions

Eligible individuals have the option of the ATO refunding them any eligible excess superannuation contributions of $10,000 or less.  The Bill provides the ATO with discretion to delay a refund where it reasonably needs to confirm the integrity of the individual’s claim.  Where an employee receives a refund, that refund will be considered as income for the relevant financial year the refund was provided and income tax may be payable.

GST exemption

The Bill confirms that where a health care provider makes superannuation contributions to an individual, it will be a GST-free supply.  This includes eligible contributions made by:

• an insurer settling a claim under an insurance policy;
• operation of a statutory compensation scheme;
• an operator of under a compulsory third party scheme; or
• an Australian government agency.

Indexation of the superannuation contributions cap

If the Bill is passed, indexation of the superannuation concessional contributions cap will be temporarily paused for one year.  The concessional cap will not increase from its current rate of $25,000 for individuals less than 50 years of age, until 2014/15.

Concessional contributions (also referred to as ‘pre-tax’ contributions) are generally contributions included in the assessable income of a superannuation fund, including employer contributions (inclusive of any salary sacrifice arrangements) and tax deductable personal contributions claimed by self employed individuals.

Conclusion

The Bill remains before the House of Representatives for debate.  We will monitor its progress and should it be passed by parliament, will update our clients and provide more detailed information on the Bill and its effect.

If you have any questions at this stage, please contact Jason Donnelly, Carly Fielding or Elizabeth Kenny on +61 2 9233 3989.

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.