Commonwealth Numbered Acts

SUPERANNUATION LEGISLATION AMENDMENT ACT 1992 No. 187, 1992 - SECT 26

26. After Part VIA of the Principal Act the following Part is inserted:

"PART VIAA-SUPERANNUATION GUARANTEE TOP-UP BENEFIT Purpose of new Part

"110SA. The purpose of this Part is to establish, in respect of certain
persons who cease to be eligible employees, an entitlement to a benefit
(called 'superannuation guarantee top-up benefit') so that an employer of such
a person while the person was an eligible employee does not have an individual
Superannuation Guarantee (Administration) Act 1992 in relation to that person
in respect of the period, or any part of the period, during which the person
was an eligible employee. Interpretation

"110SB.(1) In this Part, unless the contrary intention appears: 'accumulated
government body contributions', in relation to a person's relevant period of
employment, means the total of:

   (a)  the total amount of the productivity contributions applicable to the
        person in respect of the period; and

   (b)  notional interest on the amount worked out under paragraph (a);
        'government body scheme' means a superannuation scheme:

   (a)  established by, or operating for the benefit of employees of:

        (i)    an authority of the Commonwealth; or

        (ii)   a State or an authority of a State; or

        (iii)  a Territory or an authority of a Territory; or

        (iv)   a body corporate in which the Commonwealth, or a person of the
               kind referred to in paragraph (i), (ii) or (iii), either
               individually or in combination with one or more other such
               persons, has a controlling interest; and

   (b)  that has eligible employees as members; and

   (c)  under which productivity contributions accrue in respect of those
        eligible employees;
'notional accumulated SG contributions', in relation to a person's relevant
period of employment, means an amount equal to the sum of:

   (a)  the person's SG minimum contributions in relation to that period as
        reduced by an amount specified in, or worked out in accordance with, a
        determination made by the Australian Government Actuary under
        subsection (4); and

   (b)  notional interest on the amount worked out under paragraph (a);
'other vested benefit', in relation to a person, means the value that the
Commissioner, having regard to the advice of the Australian Government
Actuary, determines to be the value that the benefits paid or payable in
respect of the person's relevant period of employment would have if the total
amount of these benefits were taken not to include:

   (a)  the amount equal to the total of whichever of the following amounts
        is, or are, applicable:

        (i)    the amount equal to the part of the accumulated employer
               contributions in respect of the person that is based on the
               operation of paragraphs 110Q(1)(a) and (b) in relation to
               productivity contributions paid or payable after 30 June 1992;

        (ii)   the amount equal to that part of an amount paid by or in
               respect of the person that is based on the operation of
               paragraphs 110Q(1)(e) and (f) in relation to payments made
               under section 110L in relation to any period commencing after
               30 June 1992;

        (iii)  the amount equal to that part of an amount paid by or in
               respect of the person that is based on the operation of
               paragraphs 110Q(1)(e) and (f) in relation to payments made
               under section 110M in relation to any period commencing after
               30 June 1992;

        (iv)   the amount equal to that part of an amount paid by or in
               respect of the person that is based on the operation of
               paragraphs 110Q(1)(e) and (f) in relation to payments made
               under section 110MA in relation to any period commencing after
               30 June 1992;

   (b)  the amount equal to that part of the person's accumulated
        contributions based on contributions that became payable, by the
        person, after 30 June 1992;
'period of actual contributory service', in relation to a person, means the
person's period of contributory service other than any part of that period
added by the operation of subsection 128(5) that is not attributable to a
transfer value previously paid under Division 3 of Part IX;
'productivity contribution' means:

   (a)  in relation to a person who is a productivity employee within the
        meaning of Part VIA - a productivity contribution within the meaning
        of that Part (other than an amount taken to be a productivity
        contribution by virtue of the operation of paragraph 128(2)(c)); or

   (b)  in relation to any other person - an amount similar in kind to such a
        productivity contribution, whether worked out under an industrial
        aware or otherwise;
'rate of fund contribution tax' means 15% or such other rate as is determined
by the Minister under section 110SD;
'relevant period of employment', in relation to a person, means:

   (a)  if the whole of the person's period of actual contributory service
        occurred after 30 June 1992 - that period; or

   (b)  if part only of the person's period of actual contributory service
        occurred after that date - that part of the person's period of actual
        contributory service; but does not include any period for which the
        person is engaged or appointed exclusively for employment outside
        Australia unless that period:

   (c)  is a period during which the person is on leave of absence without
        pay; and

   (d)  is a period in respect of which the person is entitled to make
        contributions in accordance with a direction under subsection 51(1);
'SG minimum contribution' has the meaning given by section 110SC;
'top-up benefit' means superannuation guarantee top-up benefit payable under
section 110SE.

"(2) For the purposes of paragraph (a) of the definition of 'accumulated
government body contributions' in subsection (1), the amount of a productivity
contribution applicable to a person in relation to a particular period ('the
accrual period') is:

   (a)  if the relevant government body scheme provides for productivity
        contributions (applicable to all eligible employees who are members of
        the scheme) that may be expressed as a percentage of the earnings (as
        described for the purposes of the scheme) of each employee - that
        percentage of the earnings of the person for the accrual period based
        on the person's fortnightly rate of salary that, for the purposes of
        section 46, was payable on the most recent anniversary of birth of the
        person; or

   (b)  if the relevant government body scheme provides for productivity
        contributions (applicable to a class of eligible employees identified
        by the scheme) that may be expressed as a percentage of the earnings
        (as described for the purposes of the scheme) of each employee in the
        class, and the percentage is lower than the corresponding percentage
        for any other class of eligible employees - that percentage of the
        earnings of the person for the accrual period based on the person's
        fortnightly rate of salary that, for the purposes of section 46, was
        payable on the most recent anniversary of birth of the person; or

   (c)  if the relevant government body scheme is a defined benefit
        superannuation scheme within the meaning of the
        Superannuation Guarantee (Administration) Act 1992 that provides for a
        productivity related benefit applicable to all eligible employees who
        are members of the scheme - the contribution percentage, in relation
        to that benefit, of the earnings of the person for the accrual period
        based on the person's fortnightly rate of salary that, for the
        purposes of section 46, was payable on the most recent anniversary of
        birth of the person.

"(3) For the purposes of paragraph (2)(c), 'contribution percentage' means the
rate of contribution, expressed as a percentage of the eligible employees'
earnings and certified by an actuary, required to provide the productivity
related benefit.

"(4) The percentage referred to in paragraph (2)(a) or (b) must be certified
by the person's employer.

"(5) For the purposes of the definition of 'notional accumulated SG
contributions' in subsection (1), the Australian Government Actuary is to
determine:

   (a)  an amount representing the cost of death and invalidity cover relevant
        to the person's SG minimum contributions; or

   (b)  a means of working out such an amount. Interpretation - SG minimum
        contribution

"110SC.(1) The SG minimum contribution in respect of an eligible employee on a
contribution day during the eligible employee's relevant period of employment
is 4% of the fortnightly rate of salary that, for the purposes of section 46,
was payable to the eligible employee on the anniversary of his or her birth
immediately preceding the contribution day.

"(2) The Minister may vary the percentage mentioned in subsection (1) by
determination.

"(3) In so determining, the Minister is to have regard to the charge
percentages set out in sections 20 and 21 of the Superannuation Guarantee
(Administration) Act 1992.

"(4) Subject to subsection (5), the determination is a disallowable
instrument.

"(5) The determination is a Statutory Rule for the purposes of the Statutory
Rules Publication Act 1903. Minister may determine rate of fund contribution
tax

"110SD.(1) The Minister may vary the percentage mentioned in the definition of
'rate of fund contribution tax' in subsection 62A(1) or 110SB(1) by
determination.

"(2) The determination:

   (a)  takes effect from such date as is specified in the determination; and

   (b)  may provide for a percentage of nil.

"(3) In making the determination, the Minister is to have regard to the rate
of tax payable on employer contributions paid to a superannuation fund.

"(4) Subject to subsection (5), the determination is a disallowable
instrument.

"(5) The determination is a Statutory Rule for the purposes of the Statutory
Rules Publication Act 1903. Superannuation guarantee top-up benefit

"110SE.(1) Superannuation guarantee top-up benefit is payable to or in respect
of a person who ceases to be an eligible employee in respect of his or her
relevant period of employment if an amount greater than nil is worked out,
under whichever of subsections (3) and (4) is applicable, in relation to the
person for that period.

"(2) A top-up benefit to which an entitlement so arises is a lump sum benefit
equal to the amount referred to in subsection (1).

"(3) If the person's employer was liable to pay productivity contributions
under section 110H in respect of the person for his or her relevant period of
employment, the amount mentioned in subsection (1) is the amount worked out
using the formula:
NASGC - AEC X 100 - OVB
(100 - TR) where:
'NASGC' is the notional accumulated SG contributions in respect of the person
for the person's relevant period of employment;
'AEC' is that part of the accumulated employer contributions in respect of the
person that is based on the operation of paragraphs 110Q(1)(a) and (b) in
relation to productivity contributions paid or payable after 30 June 1992;
'TR' is the percentage figure representing the rate of fund contribution tax
applicable to that period;
'OVB' is the person's other vested benefit in respect of that period.

"(4) If the person's employer was liable to pay productivity contributions to
a government body scheme in respect of the person for his or her relevant
period of employment, the amount mentioned in subsection (1) is whichever of
the following amounts is determined by the Commissioner after having regard to
the views of the government body:

   (a)  an amount of nil;

   (b)  an amount worked out using the formula:
NASGC - AGBC - OVB;

   (c)  an amount worked out using the formula:
NASGC - GBB X 100 - OVB
(100 - TR)

   (d)  an amount worked out using the formula:
NASGC - GBPROD X 100 - OVB
(100 - TR) where: 'NASGC' is the notional accumulated SG contributions in
respect of the person for the person's relevant period of employment;
'AGBC' is the accumulated government body contributions in respect of the
person for the relevant period of employment;
'OVB' is the person's other vested benefit in respect of that period;
'GBB' is the benefit paid or payable from the government body scheme in
respect of the person for the person's relevant period of employment together
with, except where the person ceases to be both a member of the government
body scheme and an eligible employee, notional interest on that benefit;
'TR' is the percentage figure representing the rate of fund contribution tax
applicable to that period;
'GBPROD' is the total of:

   (a)  that part of the amount that has been paid to the Commissioner under
        section 110MA in respect of the person for the person's relevant
        period of employment less the amount in the nature of income tax (if
        any) that is relevant to that amount; and

   (b)  interest on the paid amount referred to in paragraph (a).

"(5) In determining the benefit paid or payable form a government body scheme
in respect of a person, the Commissioner may accept a statement from the
trustees, the administrator on behalf of the trustees or, if there are no
trustees, the administrator of the government body scheme as to:

   (a)  the amount of benefit paid or payable; or

   (b)  the date on which it was paid or is payable; or

   (c)  the period in respect of which the benefit was paid or is payable; or

   (d)  rates of interest applicable to amounts of money paid to the scheme;
        or

   (e)  any other matter in connection with the payment of the benefit.

"(6) Despite anything else in this section, top-up benefit does not become
payable to or in respect of a person if the Australian Government Actuary has
certified that, in his or her opinion, because of the value of other benefits
payable to or in respect of the person, an employer of the person while an
eligible employee will not, in respect of the person for a financial year,
have an individual superannuation guarantee shortfall within the meaning of
the Superannuation Guarantee (Administration) Act 1992. Application of
formulae

"110SF. If a single application of a formula set out in section 110SE cannot
properly be made for the whole of a person's relevant period of employment
because of a change in the person's employment, the rate of fund contribution
tax or any other thing:

   (a)  that period is to be broken up into such separate periods as is
        appropriate for the proper application of such a formula in respect of
        each such period; and

   (b)  the resulting amounts (including negative amounts) are to be
        aggregated in respect of the whole of the person's relevant period of
        employment. Payment of top-up benefit - preservation

"110SG.(1) Subject to section 110SH, if top-up benefit becomes payable in
respect of a person, the Commissioner must, in accordance with a nomination
made by the person:

   (a)  pay the benefit, for the benefit of the person, to a preservation
        fund; or

   (b)  apply the benefit on behalf of the person for the purchase of a
        deferred annuity.

"(2) If the person fails, within 2 months after the benefit becomes payable,
to make a nomination, the benefit must be paid, for the benefit of the person,
to a preservation fund nominated by the Commissioner. Payment of top-up
benefit - exceptions to preservation

"110SH. Section 110SG does not apply in any of the following circumstances:

   (a)  the person is 65 or over;

   (b)  the person is 55 or over and has given the Commissioner a written
        statement to the effect that he or she has retired form the workforce;

   (c)  the payment is being made to or in respect of the person on invalidity
        retirement or death;

   (d)  the total of the following amounts is less than $500:

        (i)    the amount of the top-up benefit in respect of the person's
               relevant period of employment;

        (ii)   the amount of the accumulated employer contributions in respect
               of the person;

        (iii)  any amount of a kind preserved or applied under subsection
               128(4A);

   (e)  the Commissioner is satisfied that the person is departing permanently
        from Australia. Payment of top-up benefit - non-preservation

"110SJ. If section 110SG does not apply to top-up benefit in relation to a
person, the Commissioner must:

   (a)  pay the benefit to the person; or

   (b)  if the person has died - pay the benefit to the personal
        representative of the person or such other person or persons (if any)
        as the Commissioner directs.".