22BDetermination with respect to surcharge commutation amount

22B  Determination with respect to surcharge commutation amount  (1) The Trust must, in accordance with advice received from an actuary, determine in writing the conversion factor that, having regard to:  (a) the age of a person when he or she makes an election under subsection 18A(1); and is applicable for the purpose of working out, in relation to the person, the yearly amount that would have to be paid to discharge a liability equal to the person’s surcharge commutation amount (within the meaning of section 18A).  (2) A determination under subsection (1) must be published in the Gazette. Part VAA—Family law superannuation splitting 22CA  Definitions   In this Part, unless the contrary intention appears: additional service factor at the operative time has the meaning given by section 22CC. additional service factor at the payment time has the meaning given by section 22CC. affected benefit means the affected benefit referred to in section 22CH. applicable additional percentage means the percentage that is applied to the rate of salary, or allowance by way of salary, payable in respect of an office in order to calculate:  (a) the annual rate of an additional retiring allowance; or  (b) the annual rate of an annuity. applicable basic percentage means the percentage that is applied to the rate of parliamentary allowance in order to calculate:  (a) the annual rate of a retiring allowance (other than additional retiring allowance); or  (b) the annual rate of an annuity. associate annuity means an annuity under section 22CD or 22CE. associate deferred annuity means an associate deferred annuity under section 22CE. associate immediate annuity means an associate immediate annuity under section 22CD. base amount means:  (a) for a splitting agreement—the base amount specified in, or calculated under, the agreement; or  (b) for a splitting order—the amount allocated under subsection 90XT(4) or 90YY(5) (as the case may be) of the Family Law Act 1975. basic service factor at the operative time has the meaning given by section 22CB. basic service factor at the payment time has the meaning given by section 22CB. family law value means:  (a) in relation to a superannuation interest within the meaning of Part VIIIB of the Family Law Act 1975—the amount determined in accordance with regulations under that Act that apply for the purposes of paragraph 90XT(2)(a) of that Act; or  (b) in relation to a superannuation interest within the meaning of Part VIIIC of the Family Law Act 1975—the amount determined in accordance with regulations under that Act that apply for the purposes of paragraph 90YY(2)(a) of that Act. In applying regulations referred to in paragraph (a) or (b), the relevant date is taken to be the date on which the operative time occurs. Note: This amount is determined by applying those regulations, whether or not an order has been made under subsection 90XT(1) or 90YY(1) (as the case may be) of the Family Law Act 1975. member spouse means a member spouse within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975. non‑member spouse means a non‑member spouse within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975. non‑standard annuity means an annuity other than a standard allowance or annuity. operative time means:  (a) for a splitting agreement that is a superannuation agreement or a flag lifting agreement within the meaning of Part VIIIB of the Family Law Act 1975 or for a splitting order within the meaning of that Part—the time that is the operative time for the purposes of that Part in relation to a payment split under the agreement or order; or  (b) for a splitting agreement that is a superannuation agreement or a flag lifting agreement within the meaning of Part VIIIC of the Family Law Act 1975 or for a splitting order within the meaning of that Part—the time that is the operative time for the purposes of that Part in relation to a payment split under the agreement or order. Orders means Orders under section 22CK. original interest means a superannuation interest to which section 22CD applies. payment split means a payment split within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975. payment time, in relation to the affected benefit, means the time when the benefit becomes payable. scheme value means the amount determined under the Orders. Secretary means the Secretary of the Department. section 16A amount means the total referred to in paragraph 16A(1)(c). section 22Q amount means the employer component, or the sum of the employer components, referred to in paragraph 22Q(5)(c). splitting agreement means:  (a) a superannuation agreement (within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975); or  (b) a flag lifting agreement (within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975) that provides for a payment split. splitting order means a splitting order within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975. splitting percentage means:  (a) for a splitting agreement—the percentage specified in the agreement under subparagraph 90XJ(1)(c)(iii) or 90YN(1)(c)(iii) (as the case may be) of the Family Law Act 1975; or  (b) for a splitting order—the percentage specified in the order under subparagraph 90XT(1)(b)(i) or 90YY(1)(b)(i) (as the case may be) of the Family Law Act 1975. standard allowance or annuity means:  (a) a retiring allowance; or  (b) an annuity, other than an annuity under section 19AA. superannuation interest means a superannuation interest within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975. transfer amount means:  (a) if a splitting percentage applies—the amount calculated by multiplying the splitting percentage by the greater of:  (i) the family law value; and  (ii) the scheme value; or  (b) if a base amount applies and the scheme value is not more than the family law value—the base amount; or  (c) if a base amount applies and the scheme value is more than the family law value—the amount calculated using the formula:    transfer factor means the number calculated by dividing the number of whole dollars in the transfer amount by the number of whole dollars in the scheme value. 22CB  Basic service factor  (1) In calculating the annual rate of the affected benefit in accordance with section 22CH, the basic service factor at the payment time and the basic service factor at the operative time are worked out under this section. Period of service at least 8 years  (2) If the period of service is at least 8 years, then:  (a) the basic service factor at the payment time is the number calculated, by reference to the member spouse’s period of service before the payment time, by adding:  (i) for service that occurred within the first 8 years—0.0625 for each full year; and  (ii) for service that occurred within the next 10 years:  (A) 0.025 for each full year; and  (B) 0.025/365 for each left‑over day; and  (b) the basic service factor at the operative time is the number calculated, by reference to the member spouse’s period of service before the operative time, by adding:  (i) for service that occurred within the first 8 years:  (A) 0.0625 for each full year; and  (B) 0.0625/365 for each left‑over day; and  (ii) for service that occurred within the next 10 years:  (A) 0.025 for each full year; and  (B) 0.025/365 for each left‑over day. Period of service less than 8 years—retiring allowance (not under subsection 18(2AA))  (3) If the period of service is less than 8 years and the affected benefit is a retiring allowance (other than an allowance under subsection 18(2AA)), then:  (a) the basic service factor at the payment time is 0.5; and  (b) the basic service factor at the operative time is the number calculated using the formula:    Period of service less than 8 years—retiring allowance under paragraph 18(2AA)(b) or (c) or annuity under paragraph 19(1)(a)  (4) If the period of service is less than 8 years and the affected benefit is a retiring allowance under paragraph 18(2AA)(b) or (c) or an annuity under paragraph 19(1)(a), then:  (a) the basic service factor at the payment time is 0.5; and  (b) the basic service factor at the operative time is the number calculated, by reference to the member spouse’s period of service before the operative time, by adding:  (ii) 0.0625/365 for each left‑over day. Period of service less than 8 years—retiring allowance under paragraph 18(2AA)(d)  (5) If the period of service is less than 8 years and the affected benefit is a retiring allowance under paragraph 18(2AA)(d), then:  (a) the basic service factor at the payment time is 0.3; and  (b) the basic service factor at the operative time is the number calculated, by reference to the member spouse’s period of service before the operative time, by adding:  (i) 0.0375 for each full year; and  (ii) 0.0375/365 for each left‑over day. 22CC  Additional service factor  (1) In calculating the annual rate of the affected benefit in accordance with section 22CH, the additional service factor at the payment time and the additional service factor at the operative time are worked out under this section. Where subsection 18(10B) does not apply  (2) If subsection 18(10B) does not apply, then:  (a) for each office, the additional service factor at the payment time is the number calculated, by reference to the member spouse’s period of service in the office before the payment time, by adding:  (ii) 0.0625/365 for each left‑over day; and  (b) for each office, the additional service factor at the operative time is the number calculated, by reference to the member spouse’s period of service in the office before the operative time, by adding:  (ii) 0.0625/365 for each left‑over day. Where paragraph 18(10B)(a) applies (one office)  (3) If paragraph 18(10B)(a) applies, then:  (a) the additional service factor at the payment time is 0.75; and  (b) the additional service factor at the operative time is:  (i) if the period of service in the office is at least 12 years—0.75; or  (ii) otherwise—the number calculated, by reference to the member spouse’s period of service in the office before the operative time, by adding:  (A) 0.0625 for each full year; and  (B) 0.0625/365 for each left‑over day. Where paragraph 18(10B)(b) applies (highest‑paid office)  (4) If paragraph 18(10B)(b) applies, then:  (a) the additional service factor at the payment time is 0.75; and  (b) if, at the operative time, the member spouse is not entitled to parliamentary allowance, then the additional service factor at the operative time for the highest‑paid office to which paragraph 18(10B)(b) applies is 0.75; and  (c) if, at the operative time, the member spouse is entitled to parliamentary allowance, then the additional service factor at the operative time for the highest‑paid office to which paragraph 18(10B)(b) applies is worked out as follows:  (i) calculate a factor under paragraph (2)(b) of this section for each office referred to in paragraph 18(10B)(b), other than an office for which the period of service began after the operative time;  (ii) for each such factor, calculate a weighted factor under subsection (6) of this section;  (iii) add together the weighted factors calculated under subparagraph (ii) of this paragraph.  (5) If the additional service factor at the operative time, worked out under paragraph (4)(c), would be more than 0.75, then it is taken to be 0.75.  (6) The weighted factor is calculated using the formula:    salary for highest office means the number of whole dollars in the salary applicable at the payment time to the office referred to in paragraph 18(10B)(b) that had the highest rate of salary, or allowance by way of salary, at the payment time. salary for the office means the number of whole dollars in the salary, or allowance by way of salary, applicable to the office at the payment time. Division 2—Benefits for non‑member spouse 22CD  Associate annuity for non‑member spouse  (1) This section applies to a superannuation interest under this Act (the original interest) if:  (a) the Secretary receives a splitting agreement or splitting order in respect of the original interest; and  (b) the original interest is not an entitlement to an annuity under section 19AA; and  (c) the member spouse and the non‑member spouse are both alive at the operative time; and  (d) if a base amount applies—the base amount at the operative time is not more than the family law value or the scheme value. Immediate annuity if operative time in payment phase  (2) If, at the operative time, standard allowance or annuity is payable in respect of the original interest, then the non‑member spouse is entitled to an associate immediate annuity from the operative time, at the rate calculated under the Orders by reference to the transfer amount. Deferred annuity if operative time in growth phase  (3) If, at the operative time, standard allowance or annuity is not payable in respect of the original interest, then the non‑member spouse is entitled to an associate deferred annuity in accordance with section 22CE. 22CE  Associate deferred annuity  (1) The associate deferred annuity is payable at an annual rate calculated under the Orders by reference to the transfer amount.  (2) The annuity is payable from the later of:  (a) the operative time; and  (b) the earliest of the following dates:  (i) if the Trust is satisfied that the non‑member spouse has become permanently incapacitated—the date that the Trust considers to have been the date on which the person became permanently incapacitated;  (ii) a date notified to the Secretary under subsection (3);  (iii) the 65th anniversary of the non‑member spouse’s birth.  (3) The non‑member spouse may give a written notice to the Secretary specifying a date that is not earlier than the 55th anniversary of the non‑member spouse’s birth. However, the notice has no effect if section 26B would prevent the annuity being paid to the non‑member spouse from the specified date. Note: Section 26B applies the preservation requirements of the Superannuation Industry (Supervision) Regulations.  (4) The annuity is not payable unless:  (a) a written application has been made requesting payment of the benefit; and  (b) the applicant has provided any information that is necessary to determine whether the benefit is payable.  (5) An application for payment on the ground of incapacity must be accompanied by the following:  (a) a certificate given by a medical practitioner nominated by the Trust;  (b) a certificate given by a medical practitioner nominated by, or on behalf of, the non‑member spouse;  (c) such additional information or documents as the Trust requires.  (6) The certificates mentioned in paragraphs (5)(a) and (b) must include a statement to the effect that, in the opinion of the medical practitioner concerned, the non‑member spouse is permanently incapacitated, as defined in this section.  (7) If the non‑member spouse dies before the annuity becomes payable, an amount calculated under the Orders must be paid to the legal personal representative or, if no legal personal representative can be found, to any individual or individuals that the Trust determines.  (8) For the purposes of this section, a person is permanently incapacitated if, and only if, the person suffers from permanent incapacity within the meaning of the Superannuation Industry (Supervision) Regulations 1994. 22CF  Commutation of small associate annuity  (a) the annual rate of associate immediate annuity that becomes payable to the non‑member spouse is less than the amount determined under the Orders; or  (b) the annual rate of associate deferred annuity that becomes payable to the non‑member spouse is less than the amount determined under the Orders; then the non‑member spouse may elect to commute the annuity.  (2) The election must be made in writing to the Secretary not later than 3 months after the annuity becomes payable.  (3) If the non‑member spouse makes the election, then the non‑member spouse is entitled instead to:  (a) if paragraph (1)(a) applies—a lump sum equal to the transfer amount; or  (b) if paragraph (1)(b) applies—a lump sum calculated under the Orders. Division 3—Reduction of benefits for member spouse 22CG  Operative time during growth phase—reduction of lump sum  (b) the original interest is not an entitlement to an associate annuity.  (2) The contributions in respect of the original interest are reduced, with effect from the operative time, by the amount calculated using the formula:    contributions at OT means the amount of the contributions, ascertained at the operative time. Note: Under subsections 20A(2) and 22Q(3), certain amounts are deemed to be contributions (in addition to contributions under Part IV).  (3) Any section 16A amount in respect of the original interest is reduced, with effect from the operative time, by the amount calculated using the formula:    section 16A amount at OT means the section 16A amount, ascertained at the operative time.  (4) Any section 22Q amount in respect of the original interest is reduced, with effect from the operative time, by the amount calculated using the formula:    section 22Q amount at OT means the section 22Q amount, ascertained at the operative time. 22CH  Operative time during growth phase—reduction of retiring allowance  (b) after the operative time, a retiring allowance (the affected benefit) becomes payable to the member spouse in respect of the original interest. Note: If the member spouse dies before becoming entitled to a retiring allowance, then subsection (1) will nevertheless result in an indirect reduction of any annuity under paragraph 19(1)(a) to a surviving spouse. This happens because the amount of that annuity is based on the amount of retiring allowance that would have become payable to the member spouse if he or she had not died. Reduction of basic percentage  (2) In calculating the annual rate of the affected benefit, the applicable basic percentage is replaced by the percentage calculated using the formula:    BSF at OT means the basic service factor at the operative time. BSF at PT means the basic service factor at the payment time. Reduction of additional percentage  (3) In calculating the annual rate of the affected benefit, each applicable additional percentage is replaced by the percentage calculated using the formula:    ASF at OT means the additional service factor at the operative time for the office concerned. ASF at PT means the additional service factor at the payment time for the office concerned.  (4) Subsection (3) does not apply to an applicable additional percentage for an office if:  (a) the period of service in the office began after the operative time; and  (b) paragraph 18(10B)(b) does not apply. Multiple interest splits for same original interest  (5) If, before the affected benefit becomes payable, the original interest has been split more than once (that is to say, section 22CD has applied more than once), then the calculations under subsections (2) and (3) are modified as set out in subsections (6) and (7). Note: If the same superannuation interest is subject to 2 or more payment splits, then section 22CD applies separately in relation to each of those splits.  (6) In applying the formula in subsection (2), the component (BSF at OT  Transfer factor) is to be replaced by the number calculated using the following steps, based on the chronological order of the operative times (starting with the earliest):  (a) calculate a factor (the interim factor) for the first split using the formula:     (b) calculate a factor (the interim factor) for the next split (the current split), using the formula:     (c) calculate a factor for each remaining split (if any), using the formula in paragraph (b);  (d) add together the factors calculated under paragraphs (a) to (c). Example: Assume 2 splits, with the first split having a basic service factor (BSF) of 0.4 and a transfer factor of 0.5 and the second split having a basic service factor of 0.6 and a transfer factor of 0.5. Applying the above steps, the replacement number for the formula is 0.4, that is:     (7) In applying the formula in subsection (3), the component (ASF at OT  Transfer factor) is to be replaced by the number calculated using the following steps, based on the chronological order of the operative times (starting with the earliest):  (a) calculate a factor (the interim factor) for the first split using the formula:    (b) calculate a factor (the interim factor) for the next split (the current split), using the formula:     (c) calculate a factor for each remaining split (if any), using the formula in paragraph (b);  (d) add together the factors calculated under paragraphs (a) to (c). Reduction not to affect later non‑standard annuity  (8) A reduction under this section is to be disregarded in calculating the amount of any non‑standard annuity that later becomes payable. Note: For example, the reduction will be disregarded in calculating the amount of annuity payable under section 19AA in respect of a child of the member spouse after the member spouse’s death. 22CI  Operative time during growth phase—reduction where original interest is entitlement to associate deferred annuity  (b) the original interest is an entitlement to an associate deferred annuity.  (2) The annual rate of that associate annuity (when it becomes payable) is reduced to the amount calculated under the Orders. Note: Although an associate immediate annuity becomes payable at the operative time, an associate deferred annuity will often not become payable until some time after the operative time. 22CJ  Operative time during payment phase—reduction of standard allowance or annuity  (1) If, at the operative time, standard allowance or annuity is payable in respect of the original interest, then the annual rate of that allowance or annuity is reduced to the amount calculated under the Orders.  (2) A reduction under subsection (1) is to be disregarded in calculating the amount of any non‑standard annuity that later becomes payable. Note: For example, the reduction will be disregarded in calculating the amount of annuity payable under section 19AA in respect of a child of the member spouse after the member spouse’s death. Division 4—Miscellaneous 22CK  Ministerial Orders  (1) The Minister may, by legislative instrument, make Orders prescribing matters required or permitted by this Part to be prescribed.  (2) Despite anything in regulations made for the purposes of paragraph 44(2)(b) of the Legislation Act 2003, section 42 (disallowance) of that Act applies to an Order made under subsection (1) of this section. Part VA—Deferred payment of retiring allowance   22DA  Definitions   In this Part, unless the contrary intention appears: deferral day means the day on which the deferring member attains the age of 55 years. deferral period means the period that starts when the deferring member ceases to be entitled to parliamentary allowance and ends immediately before the deferral day. deferring member has the meaning given by section 22DB. invalidity determination means a determination under section 22DD. SIS regulations means regulations under the Superannuation Industry (Supervision) Act 1993. transitional general election means the first general election after the commencement of this Part. 22DB  Members who are subject to deferral  (1) A person is a deferring member in relation to the person’s entitlement to a retiring allowance if:  (a) the person was elected as a member at the transitional general election; or  (b) the person became a member (by election or otherwise) after the transitional general election.  (2) However, a person is not a deferring member if the person was entitled to parliamentary allowance continuously for a period that:  (a) started before the polling day for the transitional general election; and  (b) ended at the time of the cessation that gave rise to the person’s entitlement to the retiring allowance. Note: Under section 18, a person’s entitlement to a retiring allowance arises because the person ceases to be entitled to parliamentary allowance.  (3) The following provisions apply in determining for the purposes of subsection (2) whether a person was entitled to parliamentary allowance at a particular time.  (4) If the person:  (a) ceased to be a member of the House of Representatives upon the dissolution or expiration of that House; and  (b) was elected as a member of the Senate within 3 months after so ceasing to be a member of the House of Representatives; then the person is taken to have been entitled to parliamentary allowance from the time the person so ceased to be a member of the House of Representatives until the time the person first became entitled to parliamentary allowance after being so elected as a member of the Senate.  (5) If the person:  (a) resigned as a member of the Senate; and  (b) was elected as a member of the House of Representatives within 3 months after the resignation; then the person is taken to have been entitled to parliamentary allowance from the time the person resigned as a member of the Senate until the time the person was elected as a member of the House of Representatives.  (6) For the purposes of this section, a member who is elected as a result of a polling is taken to be elected on the polling day. 22DC  Deferral of retiring allowance  (1) Subject to section 22DE, the retiring allowance of a deferring member is payable from the deferral day.  (2) For the purposes of section 18B, the deferring member is taken not to have become entitled to the retiring allowance before the deferral day.  (3) This section does not apply to a retiring allowance under subsection 18(2AA).  (4) This section does not affect any benefit payable under section 19, 19AA or 19AB. 22DD  Invalidity determination during deferral period  (a) a written application for an invalidity determination is made in accordance with section 22DF by, or on behalf of, a deferring member; and  (b) the Trust is satisfied that the deferring member would be unable, because of physical or mental impairment, to perform the duties of a member if he or she were still a member; then the Trust may make a written determination to that effect.  (2) An invalidity determination takes effect on the day it is made, or on an earlier day specified in the determination (not being earlier than the day on which the application was made).  (3) If the Trust makes a decision refusing to make an invalidity determination, the Trust must give the applicant a written notice of the refusal. 22DE  Effect of invalidity determination   Retiring allowance is payable for any part of the deferral period that is covered by an invalidity determination (not including any part of the period during which the determination is suspended under subsection 22DH(3)). 22DF  Invalidity determination—application requirements  (1) An application for an invalidity determination must be accompanied by the following:  (a) such additional information (if any) as the Trust requires;  (b) a certificate given by a medical practitioner nominated by the Trust;  (c) a certificate given by a medical practitioner nominated by, or on behalf of, the deferring member;  (d) such additional documents (if any) as the Trust requires.  (2) Each certificate must include a statement to the effect that, in the opinion of the medical practitioner concerned, the deferring member would be unable, because of physical or mental impairment, to perform the duties of a member if he or she were still a member. 22DG  Review of invalidity determination  (1) The Trust may at any time review an invalidity determination. The Trust must review it at least once every 2 years.  (2) If, after reviewing an invalidity determination, the Trust is satisfied that the deferring member would no longer be unable, because of physical or mental impairment, to perform the duties of a member if he or she were still a member, then the Trust may revoke the determination.  (3) The revocation takes effect on the day it is made or on a later day specified in the revocation.  (4) The Trust must give the deferring member a written notice of the revocation. 22DH  Review of invalidity determination—medical examination  (1) For the purposes of a review under section 22DG, the Trust may, by written notice given to the deferring member, request the deferring member:  (a) to submit himself or herself for medical examination by a specified medical practitioner at a time and place specified in the notice; or  (b) to give to the Trust, within the period specified in the notice, specified information that is relevant to the review; or  (c) to produce to the Trust, within the period specified in the notice, specified documents that are relevant to the review.  (2) The Trust may give more than one such notice in relation to the review.  (3) If the deferring member fails to comply with a notice under subsection (1), the Trust may, by written notice given to the deferring member, suspend the invalidity determination with effect from a specified day. The day must not be earlier than the day on which the notice was given.  (4) If the deferring member:  (a) submits himself or herself for medical examination in accordance with a notice under subsection (1); and  (b) incurs, in respect of attendance at that examination, expenses in respect of:  (i) transport; or  (ii) accommodation; or  (iii) the purchase of food or drink; or  (iv) incidental matters; then the Trust may determine that the deferring member is entitled to be paid by the Commonwealth an amount equal to so much of those expenses as the Trust considers reasonable. The Consolidated Revenue Fund is appropriated for the purposes of this subsection. 22DI  Other special payments during deferral period  (1) If the Trust is satisfied that a deferring member qualifies on a ground prescribed by the regulations, the Trust may make a written determination that:  (a) authorises payment to the deferring member of an amount specified in the determination; and  (b) specifies the manner in which the deferring member’s retiring allowance is to be reduced on account of the payment.  (2) The determination cannot be revoked or varied after the payment referred to in paragraph (1)(a) is made.  (3) In specifying the manner in which the deferring member’s retiring allowance is to be reduced, the Trust must have regard to advice from an actuary. The reduction may be more than the amount of the payment.  (4) The deferring member’s retiring allowance is reduced in accordance with the determination.  (5) The regulations may prescribe:  (a) the grounds for payments under this section; and  (b) the matters that the Trust must take into account when determining the amount of a payment under this section.  (6) Before the Governor‑General makes a regulation prescribing grounds for the purposes of paragraph (5)(a), the Minister must be satisfied that those grounds are the same as, or substantially similar to, the conditions of release that are referred to in the SIS regulations as “severe financial hardship” and “compassionate ground”.  (7) Before the Governor‑General makes a regulation prescribing matters for the purposes of paragraph (5)(b), the Minister must be satisfied that those matters are the same as, or substantially similar to, matters that are prescribed by the SIS regulations in relation to the conditions of release referred to in subsection (6). Part VB—Preservation of rights of certain members