On 17 January 2011, Treasury released draft amendments designed
to clarify the scope of the definition of "reportable employer
superannuation contributions" (RESC). That definition is
contained in section 16-182 of Schedule 1 to the Taxation
Administration Act 1953 (Cth).
The draft legislation will amend the definition of RESC
with effect from 1 July 2009 (when the original
definition was introduced) to exclude particular
contributions required by an Australian law over which an employee
and their employer have no real capacity to influence. The draft
amendments will not affect the inclusion of contributions made
under a formal salary sacrifice agreement which an employee has
capacity to influence.
The proposed amendments follow an announcement on 30 June 2010
by Mr Chris Bowen, the former Minister for Financial Services,
Superannuation and Corporate Law, to remove unintended
consequences. Under the current law, RESCs have included additional
employer contributions prescribed in legislation that are not
capable of being influenced by the individual or their employer. In
Mr Bowen's announcement, he stated that this was not the
Government's intention and that the law would be amended
If the proposed amendments are adopted in their current form,
RESCs will be those contributions that an employer makes for an
employee where all of the following apply:
the employee influenced the rate or amount of superannuation
their employer contributes for them,
the contributions are additional to the compulsory
contributions that an employer must make under any of the
the superannuation guarantee law
an industrial agreement
the trust deed or governing rules of a super fund, and
a federal, state or territory law.
Comments on the draft legislation closed on 11 February
In the meantime, employers will need to review current reporting
systems to ensure that they can address these potential
Selecting default super funds – Productivity
Commission asked to help
In a separate development, on 17 January 2011, the Senate asked
the Productivity Commission to create a new process for the
selection and review of default superannuation funds under modern
awards. The report from the Productivity Commission is due to be
tabled in the Senate by 31 May 2011.
We expect that the Productivity Commission will focus its review
on developing suitable objective criteria which could be applied in
the selection of default superannuation funds.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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