Document ID: chunk:federal_register_of_legislation:C2024C00651:section:18a:p1
Version: federal_register_of_legislation:C2024C00651
Segment Type: section
Provision Reference: s 18A (pt 1/2)
Character Range: 83236–85965

18A  Commutation of retiring allowance—payment of surcharge liability

Election
 (1) If:
 (a) a person is entitled to a retiring allowance under subsection 18(1A), (1B), (8A) or (8AC) or paragraph 18(2)(a) or (aa) or 18(2AA)(a), (b), (c) or (d); and
 (b) an assessment is made of the surcharge on the person's surchargeable contributions for a financial year; and
 (c) the person becomes liable to pay the surcharge under the assessment in accordance with paragraph 10(4)(c) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997;
the person may, within:
 (d) 3 months after the assessment was made; or
 (e) such longer period as the Trust allows;
give the Secretary of the Finance Department a written notice electing to commute the whole or a part of the person's retiring allowance to a lump sum benefit equal to the amount specified in the election.
 (1A) However, a person may not make an election under subsection (1) if the person has given the Secretary of the Finance Department a written notice under paragraph 22SC(2)(c).
 (2) The election must be accompanied by:
 (a) a written notice requesting that the amount of the lump sum benefit be:
 (i) paid to the Commissioner of Taxation; and
 (ii) wholly applied in payment of surcharge under the assessment; and
 (b) a copy of the notice of assessment.

Surcharge commutation amount
 (3) The amount specified in the election:
 (a) must be equal to or less than the amount of surcharge under the assessment; and
 (b) must not have the effect of reducing the person's retiring allowance below zero; and
 (c) is to be known as the surcharge commutation amount for the purposes of this section.

Entitlement to lump sum benefit
 (4) If a person makes an election under subsection (1), the person is entitled to a lump sum benefit equal to the surcharge commutation amount.
Note: The person's retiring allowance will be reduced under subsection 18(8AC).
 (5) If a person is entitled to a lump sum benefit under subsection (4), the liability to pay that benefit must be discharged by:
 (a) paying the amount of that benefit to the Commissioner of Taxation in accordance with the person's request; and
 (b) informing the Commissioner of Taxation of the person's request that the amount be wholly applied in payment of surcharge under the assessment concerned.

Notional adjustment debit
 (6) If a person makes an election under subsection (1) on a particular day, there is taken to have arisen at the start of that day a notional adjustment debit of the person equal to the amount worked out using the following formula:

where:
conversion factor means the factor applicable to the person under the determination made by the Trust under section 22B.

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