Superannuation contributions tax: Surchargeable contributions

Are employer contributions that are in respect of an employment period prior to 20 August 1996 but paid to a superannuation provider after 20 August 1996, included as surchargeable contributions under paragraph 8(2)(c) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCT Act)?

Yes. The employer contributions are included as surchargeable contributions under paragraph 8(2)(c) of the SCT Act notwithstanding the contributions relate to a period of the member's employment prior to 20 August 1996.

The member had a salary package agreement with their employer backdated to 1 January 1996. In September 1996 the employer made contributions to a superannuation (accumulated benefits) provider for the member under a salary sacrifice arrangement. The member's provider reported surchargeable contributions in respect of the membership for the 1997 financial year.

Subsection 13(2) requires a provider to report to the Commissioner of Taxation, details of a member's total contributed amounts for a financial year.

Paragraph 8(2)(c) of the SCT Act includes as surchargeable contributions, amounts that are contributed amounts paid by an employer to a provider for a member for a financial year.

The surchargeable contributions for a member of an accumulated benefits provider are calculated by reference to the contributed amounts referred to in section 43 of the SCT Act. The term contributed amounts in relation to a member for a financial year means any amounts paid for or by the member to, or otherwise credited or attributed to an account for the member, by a provider for the financial year. This is the case even where contributed amounts reported by a provider for a particular financial year relate to a period of employment prior to 20 August 1996.

Subsection 8(4) of the SCT (A&C) Act 1997 is a transitional provision designed to ensure that for the 1996-1997 financial year,'surchargeable contributions' are to be worked out only for the part of that financial year that started after 7.30pm by legal time in the ACT on 20 August 1996. There is no discretion under the SCT Act to allow the Commissioner to exclude any employer contributed amount from being a surchargeable contribution where the amount is reported by a provider for a particular financial year as relating to the period after 20 August 1996.