Commonwealth Consolidated Acts Commonwealth Consolidated ActsElection
(1) If:
(a) a person (the deceased person ) dies and:
(i) the deceased person was an eligible employee; or
(ii) the deceased person was a pensioner to whom age retirement pension, early retirement pension or invalidity pension was payable; and
(b) the deceased person is survived by a spouse; and
(c) the spouse is receiving one or more spouse's pensions (whether or not by virtue of section 136); and
(d) an assessment is made of the surcharge on the deceased person's surchargeable contributions for a financial year; and
(e) the spouse 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 spouse may, within 3 months after the assessment was made, give CSC:
(f) if the spouse is receiving only one spouse's pension--a written notice electing to commute the whole or a part of that pension to a lump sum benefit equal to the amount specified in the election in relation to the pension; or
(g) if the spouse is receiving 2 spouse's pensions and wishes to make an election under this subsection in relation to only one of these pensions--a written notice:
(i) identifying that pension; and
(ii) electing to commute the whole or a part of that pension to a lump sum benefit equal to the amount specified in the election in relation to the pension; or
(h) if the spouse is receiving 2 spouse's pensions and wishes to make an election under this subsection in relation to both of those pensions--a written notice:
(i) identifying one of those pensions as the first pension to be commuted; and
(ii) electing to commute all of the first pension to a lump sum benefit equal to the amount specified in the election in relation to the first pension; and
(iii) electing to commute the whole or a part of the other pension to a lump sum benefit equal to the amount specified in the election in relation to the other pension.
(2) An 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 an election in relation to a particular pension:
(a) must be equal to or less than the amount of the surcharge under the assessment; and
(b) must not have the effect of reducing the pension below zero; and
(c) is to be known as the surcharge commutation amount in relation to the pension for the purposes of this section.
(4) The sum of the amounts specified in the elections set out in a notice under paragraph (1)(h) must be equal to or less than the amount of the surcharge under the assessment.
Entitlement to lump sum benefit
(5) If a spouse makes an election under subsection (1) in relation to a pension, the spouse is entitled to a lump sum benefit equal to the surcharge commutation amount.
(6) If a spouse is entitled to a lump sum benefit under subsection (5), 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 spouse's request; and
(b) informing the Commissioner of Taxation of the spouse's request that the amount be wholly applied in payment of surcharge under the assessment concerned.
Reduction of pension
(7) If a spouse makes an election under subsection (1) in relation to a pension, the annual rate of the pension is to be reduced in accordance with the method determined by CSC under section 146F. The reduction takes effect from the beginning of the day of the election.
One election per assessment
(8) A spouse is not entitled to make more than one election under subsection (1) in relation to a particular assessment unless the elections:
(a) relate to different pensions; and
(b) are made on a single occasion; and
(c) are set out in the same notice under paragraph (1)(h).
Elections made before the first pension pay day
(9) If an election under subsection (1) is made during the period:
(a) beginning on 1 January or 1 July in a year; and
(b) ending at the end of the first pension pay day after that 1 January or 1 July;
this section has effect as if the election had been made on the first day after that pension pay day.
Part of spouse's pension
(10) To avoid doubt, if subsection 109AB(9) or 110(12) applies to an election under subsection (1) of this section, this section has effect, in relation to the election, as if a reference to the spouse's pension were a reference to the part of the spouse's pension concerned.