Commonwealth Consolidated Acts Commonwealth Consolidated ActsElection
(1) If:
(a) a person (the deceased person ) dies and:
(i) the deceased person was entitled to a parliamentary allowance; or
(ii) the deceased person was entitled to a retiring allowance, whether or not the retiring allowance was immediately payable; and
(b) either:
(i) the deceased person is survived by a child of the deceased person or of a former spouse of the deceased person; or
(ii) the deceased person is survived by a spouse, the spouse dies, and the spouse is survived by a child of the spouse or of the deceased person; and
(c) an annuity is payable in respect of the child; and
(d) an assessment is made of the surcharge on the deceased person's surchargeable contributions for a financial year; and
(e) the person to whom the annuity is payable (the eligible person ) (who may be the child) becomes liable to pay the surcharge under the assessment in accordance with paragraph 10(4)(ca) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 ;
the eligible person may, within:
(f) 3 months after the assessment was made; or
(g) 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 annuity to a lump sum benefit equal to the amount specified in the election.
(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 annuity 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 an eligible person makes an election under subsection (1), the eligible person is entitled to a lump sum benefit equal to the surcharge commutation amount.
(5) If an eligible 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 eligible person's request; and
(b) informing the Commissioner of Taxation of the eligible person's request that the amount be wholly applied in payment of surcharge under the assessment concerned.
Reduction of annuity
(6) If an eligible person makes an election under subsection (1) in relation to an annuity, the rate of the annuity is to be reduced in accordance with the method determined in writing by the Trust in relation to the child following consultation with an actuary. The reduction takes effect from the beginning of the day of the election.
(7) A method determined by the Trust under subsection (6) is to be a method that, having regard to:
(a) the age of the child when the election is made under subsection (1); and
(b) other relevant factors (if any);
is applicable for the purpose of working out, in relation to the child, the rate by which the annuity would have to be reduced to discharge a liability equal to the surcharge commutation amount.
One election per assessment
(8) An eligible person is not entitled to make more than one election under subsection (1) in relation to a particular assessment.
(9) In this section:
"child" has the same meaning as in section 19AA.