New South Wales Consolidated Acts

SUPERANNUATION ACT 1916 - SECT 61RA

61RA Power of STC to reduce pensions and other benefits to offset certain tax liabilities

(1) Whenever:

(a) a right to a benefit under this Act accrues to or in respect of a contributor or former contributor, and

(b) STC has paid or is liable to pay income tax under a Commonwealth taxation law in respect of employers’ contributions to the Fund, and

(c) a portion of that tax is referable to the employer-financed portion of that benefit,

STC must, subject to subsection (2):

(d) calculate the amount necessary to offset STC’s liability to pay tax so far as it is referable to the employer-financed portion of that benefit, and

(e) accordingly make a determination reducing the benefit by the amount so assessed.

(1A) Whenever:

(a) a right to a benefit under this Act accrues to or in respect of a contributor or former contributor, and

(b) STC has paid or is liable to pay an amount of superannuation contributions surcharge in respect of the employer contributions paid or payable to the Fund, or in respect of contributions made under the State Authorities Non-contributory Superannuation Act 1987 , on behalf of the contributor or former contributor,

STC must determine in writing the surcharge deduction amount that, in the opinion of STC, it would be fair and reasonable to take into account in working out the amount of the benefit and must make a determination reducing the benefit accordingly.

(1B) In determining the surcharge deduction amount in respect of a benefit payable to a contributor or former contributor, STC may have regard to any or all of the following matters:

(a) the amount of superannuation contributions surcharge payable or paid by STC in respect of the contributor or former contributor,

(b) the amount by which the contributor’s or former contributor’s surcharge debt account is in debit when the benefit emerges or commences to be paid,

(c) the value of the employer-financed portion of the benefit,

(d) the value of the benefits that, for the purpose of working out (under the Superannuation Contributions Tax (Assessment and Collection) Act 1997 of the Commonwealth) the notional surchargeable contribution factors applicable to the contributor or former contributor, were assumed to be likely to be payable to the person on his or her ceasing to be an employee,

(e) whether the contributor or former contributor has qualified for a benefit that includes an employer-financed component,

(f) the amount of any payments under section 91B,

(g) any other matter STC considers relevant.

(1C) The surcharge deduction amount determined by STC must not exceed:

(a) an amount that is 15% of the employer-financed portion of that part of the benefit payable to the contributor or former contributor that accrued after 20 August 1996, or

(b) such other amount of the employer-financed portion of a benefit as is prescribed by the regulations in relation to the period when the benefit payable to the contributor or former contributor accrued.

(1D) For the purpose of determining the surcharge deduction amount, STC may obtain actuarial advice or advice from any other persons, as STC thinks fit.

(1E) The balance of any additional amount payable by STC for superannuation contributions surcharge in respect of a contributor or former contributor, after payment of the balance of the relevant surcharge debt account, is to be paid by STC from the Fund under section 4 (4) and debited to the appropriate employer reserve.

(2) Subsection (1) does not authorise the reduction of a benefit under this Act, unless:

(a) the benefit is of a kind to which section 61RD applies, and

(b) the method of calculating the reduction is set out in section 61RD, and

(c) the reduction is calculated according to that method.

(3) Subsection (1A) does not authorise the reduction of a benefit as a result of a liability for superannuation contributions surcharge unless the benefit is of a kind to which section 61RD applies.

(3A) If STC determines a surcharge deduction amount in respect of a contributor or former contributor under this section, STC may, on the application of the contributor or former contributor, apply the benefit that accrues to or in respect of the contributor or former contributor under the State Authorities Non-contributory Superannuation Act 1987 toward payment of the surcharge deduction amount, and make a determination reducing the benefit payable under that Act accordingly. In such a case, STC may make a determination reducing the benefit payable under this Act to the extent necessary (if any) to pay the balance of the surcharge deduction amount.

(4) In this section:
"surcharge debt account", in relation to a contributor or former contributor, means the surcharge debt account kept for the contributor or former contributor (while an employee) under section 16 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 of the Commonwealth.

(5) Despite subsection (1A), the benefit of a former contributor who has commenced to be paid that benefit may be adjusted by STC in accordance with the regulations if the former contributor receives (before, on or after the commencement of this subsection) notice of an assessment of superannuation contributions surcharge under the Superannuation Contributions Tax (Assessment and Collection) Act 1997 of the Commonwealth in respect of the employer contributions paid to the Fund on behalf of the former contributor.

(6) The regulations may make provision for or with respect to the following:

(a) the circumstances in which STC may or may not pay superannuation contributions surcharge on behalf of a former contributor,

(b) adjusting the amounts of benefits or paying amounts in relation to a surcharge deduction amount or an assessment of superannuation contributions surcharge received by a former contributor before, on or after the commencement of this subsection.

(7) Without limiting subsection (6), the regulations may make provision for the payment by STC of an amount of additional surcharge payable by a former contributor above the amount determined under subsection (1C).