Commonwealth: Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 (Cth)

Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 No. 14, 2022 An Act to amend the law relating to taxation, employee share schemes and product stewardship, to amend the National Health Act 1953, to provide for a one‑off cost of living payment, and for related purposes Contents 1 Short title 2 Commencement 3 Schedules Schedule 1—Medicare Levy and Medicare Levy Surcharge Income Thresholds A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 Medicare Levy Act 1986 Schedule 2—Deductibility of COVID‑19 tests Income Tax Assessment Act 1997 Schedule 3—Deductible gift recipients—new specific recipients Income Tax Assessment Act 1997 Schedule 4—Employee Share Schemes Corporations Act 2001 Schedule 5—Varying the GDP uplift factor for tax instalments Part 1—Amendments Taxation Administration Act 1953 Part 2—Sunsetting Taxation Administration Act 1953 Schedule 6—Low and Middle Income tax offset Income Tax Assessment Act 1997 Schedule 7—Safety net thresholds National Health Act 1953 Schedule 8—2022 cost of living payment Income Tax Assessment Act 1997 Social Security Act 1991 Social Security (Administration) Act 1999 Veterans' Entitlements Act 1986 Schedule 9—Fuel duty consequential amendments Product Stewardship (Oil) Regulations 2000 Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 No. 14, 2022 An Act to amend the law relating to taxation, employee share schemes and product stewardship, to amend the National Health Act 1953, to provide for a one‑off cost of living payment, and for related purposes [Assented to 31 March 2022] The Parliament of Australia enacts: 1 Short title This Act is the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provisions Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day this Act receives the Royal Assent. 31 March 2022 2. Schedule 1 The day after this Act receives the Royal Assent. 1 April 2022 3. Schedules 2 and 3 The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives the Royal Assent. 1 April 2022 4. Schedule 4 The day after the end of the period of 6 months beginning on the day this Act receives the Royal Assent. 1 October 2022 5. Schedule 5, Part 1 The day after this Act receives the Royal Assent. 1 April 2022 6. Schedule 5, Part 2 1 July 2027. 1 July 2027 7. Schedule 6 The day after this Act receives the Royal Assent. 1 April 2022 8. Schedule 7 1 July 2022. 1 July 2022 9. Schedule 8 The day after this Act receives the Royal Assent. 1 April 2022 10. Schedule 9 Immediately after the commencement of the Excise Tariff Amendment (Cost of Living Support) Act 2022. 31 March 2022 However, the provisions do not commence at all if that Act does not commence. Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act. (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act. 3 Schedules Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Note: The provisions of the Product Stewardship (Oil) Regulations 2000 amended or inserted by this Act, and any other provisions of those regulations, may be amended or repealed by regulations made under section 37 of the Product Stewardship (Oil) Act 2000 (see subsection 13(5) of the Legislation Act 2003). Schedule 1—Medicare Levy and Medicare Levy Surcharge Income Thresholds A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 1 Paragraphs 15(1)(c) and 16(2)(c) Omit "$23,226", substitute "$23,365". Medicare Levy Act 1986 2 Subsection 3(1) (paragraph (a) of the definition of phase‑in limit) Omit "$45,881", substitute "$46,156". 3 Subsection 3(1) (paragraph (c) of the definition of phase‑in limit) Omit "$29,032", substitute "$29,206". 4 Subsection 3(1) (paragraph (a) of the definition of threshold amount) Omit "$36,705", substitute "$36,925". 5 Subsection 3(1) (paragraph (c) of the definition of threshold amount) Omit "$23,226", substitute "$23,365". 6 Subsection 8(5) (definition of family income threshold) Omit "$39,167", substitute "$39,402". 7 Subsection 8(5) (definition of family income threshold) Omit "$3,597", substitute "$3,619". 8 Subsections 8(6) and (7) Omit "$39,167", substitute "$39,402". 9 Subsection 8(7) Omit "$51,094", substitute "$51,401". 10 Paragraph 8D(3)(c) Omit "$23,226", substitute "$23,365". 11 Subparagraph 8D(4)(a)(ii) Omit "$23,226", substitute "$23,365". 12 Paragraph 8G(2)(c) Omit "$23,226", substitute "$23,365". 13 Subparagraph 8G(3)(a)(ii) Omit "$23,226", substitute "$23,365". 14 Application of amendments The amendments made by this Schedule apply to assessments for the 2021‑22 year of income and later years of income. Schedule 2—Deductibility of COVID‑19 tests Income Tax Assessment Act 1997 1 Section 12‑5 (after table item headed "copyrights") Insert: COVID‑19 expenditure on COVID‑19 tests ........... 25‑125 2 At the end of Division 25 Add: 25‑125 COVID‑19 tests (1) You can deduct a loss or outgoing to the extent it is incurred in gaining or producing your assessable income if: (a) you are an individual; and (b) the loss or outgoing is incurred in respect of testing you for the novel coronavirus SARS‑CoV‑2 that causes COVID‑19 using a test covered by subsection (3); and (c) the purpose of testing you is to determine whether you may attend or remain at a place where you: (i) engage in activities to gain or produce your assessable income; or (ii) engage in activities in the course of carrying on a *business for the purpose of gaining or producing your assessable income. (2) However, you cannot deduct a loss or outgoing under this section to the extent that it is a loss or outgoing of capital, or of a capital nature. (3) This subsection covers a test that: (a) is a polymerase chain reaction test; or (b) is a therapeutic good (within the meaning of the Therapeutic Goods Act 1989) that: (i) is included in the Australian Register of Therapeutic Goods maintained under section 9A of that Act; and (ii) has an intended purpose, accepted in relation to that inclusion, that relates to the detection of the novel coronavirus SARS‑CoV‑2 that causes COVID‑19. 3 At the end of subsection 900‑30(7) Add: ; (d) a loss or outgoing you incur in relation to producing your salary or wages that entitles you to a deduction under section 25‑125 (COVID‑19 tests). 4 Application The amendments made by this Schedule apply in relation to losses and outgoings incurred on or after 1 July 2021. Schedule 3—Deductible gift recipients—new specific recipients Income Tax Assessment Act 1997 1 In the appropriate position in subsection 30‑25(2) (table) Insert: 2.2.54 The Australian Future Leaders Foundation Limited the gift must be made after 30 June 2021 2.2.55 The Ramsay Centre for Western Civilisation Limited the gift must be made after 30 June 2021 2 In the appropriate position in subsection 30‑50(2) (table) Insert: 5.2.37 Perth Korean War Memorial Committee Incorporated the gift must be made after 30 June 2021 and before 1 July 2024 3 In the appropriate position in section 30‑105 (table) Insert: 13.2.31 Greek Orthodox Archdiocese of Australia Consolidated Trust Cathedral of the Annunciation of our Lady Restoration Fund the gift must be made after 30 June 2021 and before 1 July 2024 13.2.32 Lord Mayor's Charitable Foundation the gift must be made after 30 June 2021 13.2.33 Royal Humane Society of New South Wales Incorporated the gift must be made after 30 June 2020 4 Section 30‑315 (after table item 21) Insert: 21AA Australian Future Leaders Foundation Limited item 2.2.54 5 Section 30‑315 (after table item 52B) Insert: 52BA Greek Orthodox Archdiocese of Australia Consolidated Trust Cathedral of the Annunciation of our Lady Restoration Fund item 13.2.31 6 Section 30‑315 (after table item 68) Insert: 68A Lord Mayor's Charitable Foundation item 13.2.32 7 Section 30‑315 (after table item 84) Insert: 84A Perth Korean War Memorial Committee Incorporated item 5.2.37 8 Section 30‑315 (after table item 94AA) Insert: 94AAA Ramsay Centre for Western Civilisation Limited item 2.2.55 9 Section 30‑315 (after table item 103) Insert: 103AA Royal Humane Society of New South Wales Incorporated item 13.2.33 Schedule 4—Employee Share Schemes Corporations Act 2001 1 Section 9 (paragraph (a) of the definition of contribution plan) Repeal the paragraph, substitute: (a) regular deductions are made from the wages or salary of an employee or director (the contributor) to acquire financial products that are offered for issue or sale to the contributor under a scheme for employees or directors of a company to acquire any of the following financial products of the company: (i) fully paid ordinary shares; (ii) options, offered for no more than nominal consideration, for the issue or transfer of fully paid ordinary shares; (iii) units in fully paid ordinary shares; 2 Section 9 (definition of eligible employee share scheme) Repeal the definition. 3 Section 9 Insert: employee share buy‑back means a buy‑back under a scheme that: (a) has as its purpose the acquisition of shares in a company by, or on behalf of: (i) employees of the company, or of a related body corporate; or (ii) directors of the company, or a related body corporate, who hold a salaried employment or office in the company or in a related body corporate; and (b) has been approved by the company in general meeting. 4 Section 9 (definition of employee share scheme) Repeal the definition, substitute: employee share scheme: see subsection 1100L(1). 5 Section 9 (definition of employee share scheme buy‑back) Repeal the definition. 6 Section 9 Insert: ESS contribution plan: see section 1100T. 7 Section 9 (definition of ESS interest) Repeal the definition, substitute: ESS interest: see section 1100M. 8 Section 9 Insert: ESS participant: see subsection 1100L(2). incentive right: see subsection 1100M(4). liquidity period, for an ESS interest: see subsection 1100ZB(7). 9 Section 9 (after paragraph (ma) of the definition of managed investment scheme) Insert: (maa) an ESS contribution plan for an offer of ESS interests that is eligible to be made under Division 1A of Part 7.12; 10 Section 9 (paragraph (d) of the definition of selective buy‑back) Repeal the paragraph, substitute: (d) an employee share buy‑back. 11 Paragraph 113(3)(a) After "its shares", insert ", or of options in respect of its shares,". 12 Subsection 257B(1) (table) Omit "employee share scheme", substitute "employee share". 13 Subsection 257B(1) (note) Omit "employee share scheme buy‑back", substitute "employee share buy‑back". 14 Section 703B (note) Omit "Note", substitute "Note 1". 15 At the end of section 703B Add: Note 2: Division 1A of Part 7.12 (Employee share schemes) contains a separate regime for the making of offers in connection with employee share schemes. The provisions of this Part do not apply in relation to offers that are eligible to be made under that Division: see subsection 1100ZC(2) and section 1100ZD. 16 Subsection 708(5) (note) Omit "Note", substitute "Note 1". 17 At the end of subsection 708(5) Add: Note 2: Issues and sales that result from offers that are eligible to be made under Division 1A of Part 7.12 (Employee share schemes) are also disregarded for the purposes of subsection (1): see subsection 1100ZC(4). 18 Subsection 709(5) Omit "eligible". 19 Section 725A (note) Omit "Note", substitute "Note 1". 20 At the end of section 725A Add: Note 2: Division 1A of Part 7.12 (Employee share schemes) contains a separate regime for the making of offers under employee share schemes. The provisions of this Part do not apply in relation to offers that are eligible to be made under that Division: see subsection 1100ZC(2) and section 1100ZD. 21 Paragraphs 911A(2)(ed), (ee), (ef) and (eg) Repeal the paragraphs. 22 Subsection 911A(2) (note) Omit "Note", substitute "Note 1". 23 At the end of subsection 911A(2) Add: Note 2: A person is also exempt from the requirement to hold an Australian financial services licence in relation to certain services connected with offers that are eligible to be made under Division 1A of Part 7.12 (Employee share schemes): see subsection 1100ZC(7). 24 At the end of subsection 992A(2) Add: Note 3: Subsection (1) also does not apply in relation to an offer that is eligible to be made under Division 1A of Part 7.12 (Employee share schemes): see subsection 1100ZC(8). 25 Paragraph 994B(3)(c) Repeal the paragraph. 26 At the end of subsection 994B(3) Add: Note: Division 1A of Part 7.12 (Employee share schemes) contains a separate regime for the making of offers in connection with employee share schemes. Subsections (1) and (2) of this section do not apply in relation to securities that are issued, sold or transferred under an offer that is eligible to be made under that Division: see subsection 1100ZC(6). 27 Subsection 1010A(1) (note) Omit "Note", substitute "Note 1". 28 At the end of subsection 1010A(1) Add: Note 2: Division 1A of Part 7.12 (Employee share schemes) contains a separate regime for the making of offers in connection with employee share schemes. The provisions of this Part do not apply in relation to offers that are eligible to be made under that Division: see subsection 1100ZC(3) and section 1100ZD. 29 Section 1010BA (heading) Repeal the heading, substitute: 1010BA Part does not apply to contribution plans and ESS contribution plans 30 At the end of section 1010BA Add "or ESS contribution plans for offers of ESS interests that are eligible to be made under Division 1A of Part 7.12". 31 Subsection 1012E(8) (note) Omit "Note", substitute "Note 1". 32 At the end of subsection 1012E(8) Add: Note 2: Issues and sales that result from offers that are eligible to be made under Division 1A of Part 7.12 (Employee share schemes) are also disregarded for the purposes of subsection (2): see subsection 1100ZC(4). 33 After Division 1 of Part 7.12 Insert: Division 1A—Employee share schemes Subdivision A—Introduction 1100E Simplified outline of this Division This Division provides for regulatory relief for offers of interests (ESS interests) under an employee share scheme of: (a) a body corporate; or (b) a registered scheme that meets certain listing requirements. Offers may be made to: (a) directors and employees of the body corporate or the responsible entity of the registered scheme; and (b) directors and employees of an associated entity of the body corporate or the responsible entity of the registered scheme; and (c) persons that provide services to the body corporate or responsible entity of the registered scheme. Offers may also be made to certain related persons of directors, employees and service providers. The regulatory relief consists of exemptions from the following requirements of this Act: (a) the disclosure requirements for the issue, sale and transfer of securities (Parts 6D.2 and 6D.3) and financial products (Part 7.9); (b) the restrictions on advertising of offers for the issue, sale and transfer of securities (section 734) or financial products (section 1018A); (c) the requirement to make a target market determination for a financial product and distribute financial products in accordance with a target market determination (Part 7.8A); (d) the requirement to hold an Australian financial services licence for a financial service provided in relation to the employee share scheme (section 911A); (e) the prohibition on the hawking of financial products (section 992A). An offer of ESS interests for no consideration is eligible to be made under this Division. An offer of ESS interests for monetary consideration is eligible to be made under this Division if: (a) the proportion of shares covered by ESS interests that are offered complies with an issue cap; and (b) the terms of the offer include certain terms; and (c) streamlined disclosure requirements are met. An offer of ESS interests by an unlisted body corporate must also generally comply with a monetary cap. Regulatory relief is revoked if: (a) an offer ceases to meet these requirements; or (b) the body corporate or responsible entity of the scheme does not comply with a term of the offer dealing with disclosure. An offer of ESS interests is also eligible to be made under this Division if it could otherwise have been made under section 708, 708AA, 1012D, 1012DAA or 1012DA. There are offences for making material misleading statements in, or material omissions from, required disclosure documents and information. 1100F Geographical coverage of Division This Division applies to offers of ESS interests that are received in this jurisdiction, regardless of where any resulting issue, sale or transfer occurs. 1100G Offers and invitations both covered For the purposes of this Division: (a) offering ESS interests for issue includes inviting applications for the issue of the ESS interests; and (b) offering ESS interests for sale includes inviting offers to purchase the ESS interests. 1100H Person offering interests For the purposes of this Division, the person who offers ESS interests is the person who has the capacity, or who agrees, to issue or transfer the ESS interests if the offer is accepted. 1100J Offers may also be made in reliance on section 708 or 1012D (1) The fact that a body corporate makes an offer of securities that is eligible to be made under this Division does not prevent the body corporate from also making an offer, in reliance on a provision of section 708, of securities that are of the same class as those offered under the first‑mentioned offer. Note: The interaction of this Division with section 708 is affected by section 1100R and subsection 1100ZC(4). (2) The fact that a body corporate or responsible entity of a registered scheme makes an offer of financial products that is eligible to be made under this Division does not prevent the body corporate or responsible entity from also making an offer, in reliance on a provision of section 1012D, of financial products that are of the same kind as those offered under the first‑mentioned offer. Note: The interaction of this Division with section 1012D is affected by section 1100R. 1100K Financial markets recognised under this Division (1) For the purposes of this Division, the following financial markets are covered by this section: (a) a financial market operated by a market licensee; (b) a foreign financial market determined by ASIC under subsection (2). (2) ASIC may, by legislative instrument, determine one or more foreign financial markets for the purposes of this section. Subdivision B—Key concepts 1100L Meaning of employee share scheme Meaning of employee share scheme (1) An employee share scheme of a body corporate, or of a registered scheme that is included in the official list of a financial market covered by section 1100K, means a scheme under which an ESS interest of the body corporate or registered scheme may be issued, sold or transferred to: (a) a person (a primary participant) who is: (i) an employee or director of, or an individual who provides services to, the body corporate or the responsible entity of the registered scheme; or (ii) an employee or director of, or an individual who provides services to, an associated entity of the body corporate or of the responsible entity of the registered scheme, where that associated entity is a body corporate; or (iii) a prospective person to whom subparagraph (i) or (ii) may apply; or (iv) a person prescribed by the regulations for the purposes of this subparagraph; or (b) another person (a related person) on behalf of a primary participant, where the related person is: (i) a spouse, parent, child or sibling of the primary participant; or (ii) another body corporate controlled by the primary participant or a person mentioned in subparagraph (i); or (iii) a body corporate that is the trustee of a self managed superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993) where the primary participant is a director of the body corporate; or (iv) a person prescribed in relation to the primary participant by the regulations for the purposes of this subparagraph. Note: An ESS participant who is an employee may be entitled to certain protections, conditions and minimum wages under the Fair Work Act 2009, and protections under other laws of the Commonwealth, including section 31 of Schedule 2 to the Competition and Consumer Act 2010 (misleading conduct relating to employment). Meaning of ESS participant (2) A person is an ESS participant in an employee share scheme if the person is: (a) a primary participant mentioned in paragraph (1)(a) in relation to the scheme; or (b) a related person mentioned in paragraph (1)(b) in relation to the scheme. 1100M Meaning of ESS interest Bodies corporate included in the official list of a financial market (1) An ESS interest, in a body corporate that is included in the official list of a financial market covered by section 1100K, means any of the following: (a) a fully paid share in the body corporate that is in a class of shares that is able to be traded on the financial market; (b) a beneficial interest in a fully paid share in the body corporate where the beneficial interest is in a class of interests that is able to be traded on the financial market; (c) a fully paid share in the body corporate that is convertible into an interest referred to in paragraph (b), where the conversion can be made without charge or for a nominal fee; (d) a beneficial interest in a fully paid share in the body corporate that is convertible into an interest referred to in paragraph (a), where the conversion can be made without charge or for a nominal fee; (e) a unit in an interest mentioned in any of paragraphs (a), (b), (c) or (d); (f) a fully paid stapled security that is in a class of stapled securities that is able to be traded on the financial market, that consists of 2 or more interests, each of which would separately be: (i) an ESS interest under any of paragraphs (a) to (e) of the body corporate, or of an associated entity of the body corporate; or (ii) an ESS interest under paragraph (3)(a) or (b) in a registered scheme, where the responsible entity of the scheme is an associated entity of the body corporate; (g) a unit in a stapled security mentioned in paragraph (f); (h) an incentive right granted in relation to, or an option to acquire, an interest mentioned in any of paragraphs (a), (b), (c), (d) or (f) (the underlying ESS interest); (i) any other interest in the body corporate prescribed by the regulations for the purposes of this paragraph. Meaning of ESS interest in other bodies corporate (2) An ESS interest, in a body corporate to which subsection (1) does not apply, means: (a) a fully paid share in the body corporate; or (b) a unit in an interest mentioned in paragraph (a); or (c) an incentive right granted in relation to, or an option to acquire, an interest mentioned in paragraph (a) (the underlying ESS interest); or (d) any other interest in the body corporate prescribed by the regulations for the purposes of this paragraph. Meaning of ESS interest in a registered scheme (3) An ESS interest, in a registered scheme that is included in the official list of a financial market covered by section 1100K, means: (a) an interest in the scheme that is of the same kind as an interest in the scheme that is able to be traded on the financial market; or (b) a unit in an interest mentioned in paragraph (a); or (c) an incentive right granted in relation to, or an option to acquire, an interest mentioned in paragraph (a) (the underlying ESS interest); or (d) any other interest in the scheme prescribed by the regulations for the purposes of this paragraph. Meaning of incentive right (4) Incentive right, in relation to a security or financial product, means: (a) a conditional right to acquire the security or financial product; or (b) a conditional right to be paid a cash amount where the amount is determined (wholly or in part) with reference to any of the following: (i) the price or value of the security or financial product at a particular time; (ii) the change in the price or value of the security or financial product over a particular period; (iii) the amount of dividends or distributions paid in respect of the security or financial product at a particular time; (iv) the change in the amount of dividends or distributions paid in respect of the security or financial product over a particular period; or (c) a conditional right to: (i) acquire the security or financial product; and (ii) be paid a cash amount where the amount is determined (wholly or in part) with reference to any of the matters mentioned in subparagraphs (b)(i) to (iv). Subdivision C—Offers that are eligible to be made under this Division 1100N Offers that are eligible to be made under this Division An offer for the issue, sale or transfer of ESS interests of a body corporate or registered scheme to ESS participants in connection with an employee share scheme is eligible to be made under this Division if: (a) the offer is covered by any of the following: (i) section 1100P (about offers for no monetary consideration); (ii) section 1100Q (about offers for monetary consideration); (iii) section 1100R (about offers that would otherwise not need disclosure); and (b) the offer is expressed to be made under this Division. 1100P Offers for no monetary consideration An offer for the issue or transfer of ESS interests of a body corporate or registered scheme to ESS participants in connection with an employee share scheme is covered by this section if: (a) no monetary consideration is to be provided for the issue or transfer of the interests; and (b) if the offer is of options or incentive rights—no monetary consideration is to be provided on the exercise of the options or rights; and (c) any trust that may issue or transfer ESS interests under the scheme meets the requirements in section 1100S; and (d) the offer meets any requirements prescribed in the regulations for the purposes of this paragraph. 1100Q Offers for monetary consideration (1) An offer for the issue, sale or transfer of ESS interests to ESS participants in connection with an employee share scheme of a body corporate or registered scheme is covered by this section if: (a) either or both of the following apply: (i) the interests are offered for issue or sale in return for monetary consideration, and the interests will be acquired by the ESS participant who pays for the interests; (ii) the interests are options or incentive rights and monetary consideration is to be provided on the exercise of the options or rights; and (b) any trust that may issue or transfer ESS interests under the scheme meets the requirements in section 1100S; and (c) any plan under which an ESS participant may acquire ESS interests by making regular payments, or having regular deductions made from the participant's salary or wages, is an ESS contribution plan for the offer (see section 1100T); and (d) any loan offered by the body corporate or relevant responsible entity, or an associated entity of the body corporate or responsible entity, in connection with the scheme complies with section 1100U; and (e) the offer complies with the issue cap (see section 1100V); and (f) the offer complies with section 1100W (about disclosure); and (g) the terms of the offer comply with sections 1100Y and 1100Z; and (h) the offer meets any additional requirements prescribed in the regulations for the purposes of this paragraph. Additional requirements for unlisted bodies corporate (2) However, if the offer is of ESS interests in a body corporate that is not included in the official list of a financial market covered by section 1100K, the offer is not eligible to be made under this Division unless: (a) if the interests are offered for issue or sale in return for monetary consideration—the offer is accompanied by the supporting information required by section 1100X; and (b) the offer complies with section 1100ZA (about the monetary cap); and (c) the offer meets any additional requirements prescribed in the regulations for the purposes of this paragraph. 1100R Offers that would otherwise not need disclosure Offers other than small scale offerings (1) An offer for the issue, sale or transfer of ESS interests to ESS participants in connection with an employee share scheme of a body corporate or registered scheme is covered by this section if: (a) the offer would not require disclosure to any investor under Part 6D.2 (if that Part otherwise applied to the offer) because of section 708 (apart from subsection 708(1) or (15)) or 708AA; or (b) the offer would not require any person to be given a Product Disclosure Statement under Part 7.9 (if that Part otherwise applied to the offer) because of section 1012D (apart from subsection 1012D(5) or (6)), 1012DAA or 1012DA. Note: This subsection puts beyond doubt that the no consideration exemptions from disclosure in subsections 708(15) and 1012D(5) and (6) cannot be used to exempt an offer of ESS interests from disclosure under Part 6D.2 or 7.9. Small scale offerings (2) An offer for the issue, sale or transfer of ESS interests to ESS participants in connection with an employee share scheme of a body corporate or registered scheme is covered by this section if: (a) either: (i) the offer would not require disclosure to any investor under Part 6D.2 (if that Part otherwise applied to the offer) because of subsection 708(1); or (ii) the offer would not require any person to be given a Product Disclosure Statement under Part 7.9 (if that Part otherwise applied to the offer) because of subsection 1012E(2); and (b) any trust that may issue or transfer ESS interests under the scheme meets the requirements in section 1100S; and (c) any plan under which an ESS participant may acquire ESS interests by making regular payments, or having regular deductions made from the participant's salary or wages, is an ESS contribution plan for the offer (see section 1100T); and (d) any loan offered by the body corporate or relevant responsible entity, or an associated entity of the body corporate or responsible entity, in connection with the scheme complies with section 1100U. 1100S Requirements for trusts (1) A trust meets the requirements in this section for an employee share scheme of a body corporate or registered scheme under which an ESS interest may be issued or transferred by the trustee of the trust if: (a) the trust is covered by subsection (2); and (b) either: (i) the trustee acquires the ESS interest in connection with the employee share scheme for the purposes of the trustee transferring the ESS interest to an ESS participant; or (ii) if the ESS interest is a unit in another ESS interest—the trustee acquires the other ESS interest in connection with the employee share scheme for the purposes of the trustee issuing or transferring the unit to an ESS participant. (2) A trust is covered by this subsection if the trust deed of the trust: (a) provides that, in its capacity as trustee of the trust, the activities of the trustee are limited to managing employee share schemes of the body corporate or registered scheme referred to in subsection (1); and (b) requires the trustee of the trust to keep written records on the administration of the trust; and (c) prevents the trustee of the trust charging any fees or charges for administering the trust, other than: (i) reasonable disbursements charged to the trust; or (ii) amounts charged to the body corporate or responsible entity of the registered scheme; and (d) if the trustee of the trust is an associated entity of the body corporate or the relevant responsible entity—provides that the trustee may only exercise voting rights associated with the ESS interests in accordance with the instructions of the holder of the interests or consistent with the trustee's fiduciary duties; and (e) contains terms that meet any requirements prescribed in the regulations for the purposes of this paragraph. 1100T Meaning of ESS contribution plan An ESS contribution plan, for an offer for the issue or sale of ESS interests, means a plan with terms that: (a) allow an ESS participant to make regular payments, or elect to have regular deductions made from their wages or salary, for the purpose of acquiring the ESS interests under the offer; and (b) provide that, before the participant acquires the ESS interests under the offer, the payments or deductions are held on trust in an account with an Australian ADI that is kept solely for that purpose; and (c) allow the participant to elect to discontinue the deductions or payments at any time; and (d) provide that, if the participant so elects: (i) any deductions from the participant's wages or salary will cease, and any deductions made after the election will be repaid to the participant, within 45 days of the election; and (ii) the amount of the deductions or payments standing, at the time when the election is made, to the credit of the account for the participant, and any interest on that amount, will be repaid to the participant within 45 days of the election; and (e) require the participant to agree in writing to the terms of the plan before participating in the plan; and (f) meet any requirements prescribed in the regulations for the purposes of this paragraph. 1100U Requirements for connected loans (1) A loan offered by a body corporate or responsible entity, or an associated entity of a body corporate or responsible entity, in connection with an employee share scheme complies with this section if: (a) the loan is offered on the following terms: (i) that the loan has no interest or fees payable; (ii) that the rights of the body corporate, responsible entity or associated entity as against the ESS participant, in the event of default in payment of the loan, are wholly limited to forfeiture of the ESS interests acquired using the loan; and (b) the borrower is the ESS participant who will acquire ESS interests offered under the employee share scheme; and (c) the terms of the loan meet any requirements prescribed in the regulations for the purposes of this paragraph. Additional requirement for unlisted bodies corporate (2) However, if the offer is of ESS interests in a body corporate that is not included in the official list of a financial market covered by section 1100K, a loan does not comply with this section if it is offered or made by the body corporate to any ESS participant who, at the time the loan is offered or made (as the case may be), is a shareholder of the body corporate. 1100V Issue cap for offers involving consideration (1) An offer of ESS interests in a body corporate or registered scheme complies with the issue cap if, at the time the offer is made, the body corporate or responsible entity of the registered scheme reasonably believes: (a) the total number of fully paid shares in the body corporate or interests in the registered scheme that are, or are covered by, the ESS interests of the body corporate or scheme that may be issued under the offer; and (b) the total number of fully paid shares in the body corporate or interests in the registered scheme that are, or are covered by, the ESS interests that have been issued, or could have been issued, under offers made in connection with the employee share scheme at any time during the 3 year period ending on the day the offer is made; does not exceed the percentage referred to in subsection (2) of the number of those fully paid shares or interests actually issued by the body corporate or scheme (whether in connection with the employee share scheme or otherwise) as at the start of the day the offer is made. (2) The percentage is: (a) if the constitution of the body corporate or registered scheme specifies an issue cap percentage—that percentage; or (b) if paragraph (a) does not apply—the greater of the following: (i) for a body corporate or registered scheme that is included in the official list of a financial market covered by section 1100K—5%; (ii) for a body corporate that is not included in the official list of a financial market covered by section 1100K—20%; (iii) the percentage (if any) prescribed by the regulations for the purposes of this subparagraph. Modification for stapled securities (3) However, if the ESS interest is, or covers, a stapled security, then: (a) each body corporate or registered scheme mentioned in paragraph 1100M(1)(f) in relation to an interest that comprises the stapled security is treated as offering that interest; and (b) to comply with the issue cap, subsection (1) must be satisfied in relation to each of those offers. 1100W Disclosure requirements for offers involving consideration (1) An offer of ESS interests in connection with an employee share scheme complies with this section if the offer is made in, or accompanied by, a document that meets the requirements of subsections (2) and (3). ESS offer document (2) A document (an ESS offer document) meets the requirements of this subsection for an offer of ESS interests in connection with an employee share scheme if the document: (a) includes the terms of the offer, or a summary of the terms of the offer with a statement that, on request, a copy of the full terms of the offer will be provided to the ESS participant; and (b) provides general information about the risks of acquiring and holding the ESS interests being offered; and (c) states that advice given in relation to the offer does not take into account the ESS participant's objectives, financial situation and needs; and (d) suggests that the ESS participant obtain personal advice in relation to the offer; and (e) states the period (the application period) during which the ESS participant may accept the offer; and (f) for an employee share scheme of a body corporate that is included in the official list of a financial market covered by section 1100K: (i) states either the acquisition price of the ESS interests or, if the acquisition price will be determined at a future date, how the acquisition price will be determined; and (ii) explains how the ESS participant may ascertain the market price of the shares or, if beneficial interests, units, options or incentive rights are offered, how the ESS participant may ascertain the market price of the underlying ESS interest; and (g) if ESS interests may be acquired under the offer using a loan or ESS contribution plan—includes: (i) the terms of the loan or plan; or (ii) a summary of the terms of the loan or plan and a statement that, on request, a copy of the terms of the plan or loan will be provided to the ESS participant; and (h) if ESS interests will be held on trust for ESS participants (other than by a body corporate of the kind mentioned in subparagraph 1100L(1)(b)(iii) (which is about self managed superannuation funds))—includes: (i) the trust deed; or (ii) a summary of the trust deed and a statement that, on request, a copy of the full deed will be provided to the ESS participant; and (i) includes, or directs the participant to, any of the following documents (if they exist) that relate to the same class of ESS interests as those being offered: (i) a disclosure document prepared under Part 6D.2 in relation to an offer of securities, where that offer was made in the 12 months before the start of the application period; (ii) a Product Disclosure Statement prepared under Part 7.9 in relation to an offer of financial products for issue or sale, where that offer was made in the 12 months before the start of the application period; and (j) includes any other information prescribed by the regulations for the purposes of this paragraph. Additional requirement for unlisted bodies corporate (3) If the offer is of ESS interests in a body corporate that is not included in the official list of a financial market covered by section 1100K, the ESS offer document must also include the following: (a) a statement that the ESS interests may not have any value and that the value of the ESS interests will depend on future events that may not occur; (b) if the ESS interests are: (i) shares that are not ordinary shares; or (ii) units in, incentive rights granted in relation to, or options to acquire, shares that are not ordinary shares; a description of the rights that attach to the shares, and how the shares differ from ordinary shares. Regulations may provide other ways of complying with this section (4) An offer also complies with this section if the offer is of a kind prescribed by the regulations for the purposes of this subsection. 1100X Additional disclosure requirements for offers by unlisted bodies corporate Supporting information for offers by unlisted bodies corporate (1) The supporting information required by this section is: (a) the financial information mentioned in subsection (2), accompanied by a statement as to whether that financial information has been audited; and (b) a document covered by subsection (3) (about valuations) in relation to the ESS interests being offered; and (c) a statement that the body corporate is solvent; and (d) any other financial information prescribed by the regulations for the purposes of this paragraph. Financial information (2) The financial information is: (a) if the body corporate must lodge a report for a financial year with ASIC under section 319—a copy of the most recent report lodged with ASIC; or (b) if the body corporate is a registered foreign company—a copy of the most recent documents lodged with ASIC under section 601CK; or (c) otherwise—a balance sheet and profit and loss statement prepared in compliance with either the accounting standards or the international accounting standards (within the meaning of the Australian Securities and Investments Commission Act 2001). Valuation information (3) This subsection covers the following documents: (a) a copy of a valuation of the ESS interest that has been prepared consistently with an applicable method approved by the Commissioner of Taxation under section 960‑412 of the Income Tax Assessment Act 1997; (b) if securities in the same class as the ESS interests are on offer at the same time as the ESS interests—a disclosure document for that offer that has been lodged with ASIC as mentioned in section 727; (c) if financial products in the same class as the ESS interests are on offer at the same time as the ESS interests—a disclosure document or statement (within the meaning of section 952B) in relation to those financial products; (d) a copy of an executed agreement under which ESS interests in the same class as the ESS interests are to be acquired on arm's length terms by a third party who is not an associate of the person making the offer, where the agreement specifies the amount of monetary consideration to be paid for an ESS interest in that class; (e) a copy of a draft agreement under which ESS interests in the same class as the ESS interests are to be acquired on arm's length terms by a third party who is not an associate of the person making the offer, where the agreement specifies the amount of monetary consideration to be paid for an ESS interest in that class; (f) a document prescribed by the regulations for the purposes of this paragraph. 1100Y Terms of the offer—disclosure etc. (1) The terms of an offer of ESS interests in connection with an employee share scheme comply with this section if, under those terms: (a) an ESS participant cannot acquire an ESS interest under the offer until at least 14 days after receiving the ESS offer document and any supporting information required under section 1100X (if applicable) for the offer; and (b) if the ESS offer document included only a summary of the terms of the offer—the person who makes the offer must provide an ESS participant with a copy of the full terms of the offer within 10 business days of the ESS participant requesting a copy of those full terms; and (c) if the ESS offer document included only a summary of the terms of a loan or ESS contribution plan—the person who makes the offer must provide an ESS participant with a copy of the full terms of the loan or plan within 10 business days of the ESS participant requesting a copy of those full terms; and (d) if the ESS offer document included only a summary of a trust deed—the person who makes the offer must provide an ESS participant with a copy of the full trust deed within 10 business days of the ESS participant requesting a copy of the full trust deed; and (e) if the offer is made by a trustee of a trust that meets the requirements of section 1100S—the trustee must comply with the trust deed. Note: If an offer contravenes a term mentioned in this subsection, or subsection (3) or (4) (if applicable), regulatory relief for the offer is revoked: see section 1100ZG. Additional requirements for unlisted bodies corporate (2) Subsections (3) and (4) apply if the offer is of ESS interests in a body corporate that is not included in the official list of a financial market covered by section 1100K. (3) The terms of the offer must also provide that, if the ESS participant is given a draft sale agreement in satisfaction of paragraph 1100X(3)(e) (about valuations), the ESS participant cannot acquire an ESS interest until a sale agreement that is not materially different from the draft sale agreement has been executed. (4) If the offer is of options or incentive rights, and monetary consideration is to be provided on the exercise of the options or incentive rights, the terms of the offer must also be such that: (a) the options cannot be exercised, or the incentive rights cannot vest, unless the following documents are provided to the ESS participant at least 14 days before the exercise of the option or vesting of the incentive right: (i) the financial information mentioned in subsection 1100X(2), accompanied by a statement as to whether that financial information has been audited; (ii) a document covered by subsection 1100X(3) (about valuations) in relation to the underlying ESS interest; (iii) a statement that the body corporate is solvent; (iv) any other information prescribed by the regulations for the purposes of this subparagraph; and (b) the person who made the offer must provide the ESS participant with the information mentioned in paragraph (a) at least 14 days before the option becomes exercisable or the incentive right vests; and (c) if the ESS participant is given a draft sale agreement in satisfaction of subparagraph (a)(ii)—the ESS participant cannot exercise the option or right until a sale agreement that is not materially different from the draft sale agreement has been executed. Regulations may provide other ways of complying with this section (5) An offer also complies with this section if the offer is of a kind prescribed by the regulations for the purposes of this subsection. 1100Z Terms of the offer—misleading statements and omissions (1) The terms of an offer of ESS interests in connection with an employee share scheme comply with this section if, under those terms: (a) the ESS offer document, any supporting information required under section 1100X (if applicable), and the terms of the offer: (i) must not include a misleading or deceptive statement; and (ii) must not omit any information that would result in the ESS offer document, supporting information or terms of the offer being misleading or deceptive; and (b) the person who makes the offer (the offeror) must provide each ESS participant with an updated ESS offer document as soon as practicable after becoming aware that the document that was provided has become out of date, or is otherwise not correct, in a material respect; and (c) if the offer is of options or incentive rights and monetary consideration is to be provided on the exercise of the options or incentive rights—the offeror must provide each ESS participant with updated documents in satisfaction of paragraph 1100Y(4)(a) as soon as practicable after becoming aware that the information that was provided has become out of date, or is otherwise not correct, in a material respect; and (d) each person mentioned in items 2, 3 and 4 of the table in subsection (2) must notify, in writing, the offeror as soon as practicable if, during the application period for the offer mentioned in paragraph 1100W(2)(e), the person becomes aware that: (i) a material statement in the documents mentioned in paragraph (a) is misleading or deceptive; or (ii) information was omitted from any of those documents that has resulted in one or more of those documents being misleading or deceptive; or (iii) a new circumstance has arisen during the application period which means the ESS offer document is out of date, or otherwise not correct, in a material respect; and (e) if the offer is of options or incentive rights and monetary consideration is to be provided on the exercise of the options or incentive rights—each person mentioned in items 2, 3 and 4 of the table in subsection (2) must notify, in writing, the offeror as soon as practicable if, after the documents mentioned in paragraph 1100Y(4)(a) have been provided to an ESS participant in accordance with that paragraph, the person becomes aware that: (i) a material statement in the documents is misleading or deceptive; or (ii) information was omitted from any of the documents that has resulted in one or more of those documents being misleading or deceptive; or (iii) a new circumstance has arisen since the documents were provided to an ESS participant which means the documents are out of date, or otherwise not correct, in a material respect; and (f) an ESS participant who suffers loss or damage because of a contravention of a term of the offer covered by paragraph (a), (b), (c), (d) or (e) of this subsection can recover the amount of loss or damage in accordance with the table in subsection (2). (2) For the purposes of paragraph (1)(f), an ESS participant must be able to recover loss or damage in accordance with the following table: Item An ESS participant may recover loss or damage suffered as a result of a contravention of … from these people … 1 a term of the offer covered by any of the following paragraphs: the body corporate or responsible entity making the offer (a) paragraph (1)(a) (misleading or deceptive statements and omissions); (b) paragraph (1)(b) (out of date ESS offer document); (c) paragraph (1)(c) (out of date option or incentive right information) 2 a term of the offer covered by any of the following paragraphs: each director of the body corporate or responsible entity making the offer (a) paragraph (1)(a) (misleading or deceptive statements and omissions); (b) paragraph (1)(b) (out of date ESS offer document); (c) paragraph (1)(c) (out of date option or incentive right information) 3 a term of the offer covered by any of the following paragraphs: a person named, with their consent, in an ESS offer document, any supporting information required under section 1100X (if applicable) or the terms of the offer as a proposed director of the body corporate or responsible entity of a registered scheme whose ESS interests are being offered (a) paragraph (1)(a) (misleading or deceptive statements and omissions); (b) paragraph (1)(b) (out of date ESS offer document); (c) paragraph (1)(c) (out of date option or incentive right information) 4 a term of the offer covered by paragraph (1)(a) (misleading or deceptive statements and omissions) a person named, with their consent, in the ESS offer document, any supporting information required under section 1100X (if applicable) or the terms of the offer as having made: (a) the misleading or deceptive statement; or (b) a statement on which the misleading or deceptive statement is based 5 a term of the offer covered by paragraph (1)(d) or (e) (failure to notify body corporate or responsible entity of misleading or deceptive statement and omissions or new circumstances) the person mentioned in item 2, 3 or 4 of this table who failed to notify the body corporate or responsible entity in accordance with the term covered by paragraph (1)(d) or (e) Note: Item 2—director includes a shadow director (see section 9). Additional terms of the offer—no liability terms (3) The terms of the offer may also include terms to the effect that a person mentioned in the table in subsection (2) is not liable for any loss or damage suffered by an ESS participant because of a contravention of a term of the offer covered by paragraph (1)(a), (b) or (c) if: (a) the person: (i) made all inquiries (if any) that were reasonable in the circumstances; and (ii) after doing so, believed on reasonable grounds that the statement was not misleading or deceptive; or (b) the person did not know that the statement was misleading or deceptive; or (c) the person placed reasonable reliance on information given to the person by: (i) if the person is a body corporate or a responsible entity of a registered scheme—someone other than a director, employee or agent of the body corporate or responsible entity; or (ii) if the person is an individual—someone other than an employee or agent of the individual; or (d) for a person mentioned in column 2 of item 3 or 4 of the table in subsection (2)—the person proves that they publicly withdrew their consent to being named in the document in that way; or (e) the contravention arose because of a new circumstance that has arisen since the ESS offer document was prepared and the person proves that they were not aware of the matter. (4) The terms of the offer must not limit liability of a person mentioned in the table in subsection (2) in any way other than as required by subsection (3). 1100ZA Monetary cap for offers by unlisted bodies corporate (1) An offer complies with this section if it is made on terms that could not result in a breach of the monetary cap for any primary participant in relation to the scheme for: (a) the 12‑month period starting on the day that an offer was first accepted by the participant or a related person of the participant in connection with the scheme; or (b) any subsequent 12‑month period starting immediately after the end of the previous 12‑month period. Note 1: For who is a primary participant in an employee share scheme, see paragraph 1100L(1)(a). Note 2: For who is a related person of a primary participant, see paragraph 1100L(1)(b). (2) The offer breaches the monetary cap for a 12‑month period if the amount worked out under subsection (3) for the participant for the period exceeds the monetary cap worked out under subsection (5) for the participant for the period. Amounts that use up the cap (3) The amount worked out under this subsection for a 12‑month period is the sum of the following amounts, worked out in accordance with subsection (4): (a) the maximum amount the participant could pay in the 12‑month period under the terms of any offer made in connection with any employee share scheme operated by the body corporate or an associate of the body corporate; (b) the maximum amount that could be paid by related persons of the participant in the 12‑month period under the terms of any offer made in connection with any employee share scheme operated by the body corporate or an associate of the body corporate. (4) In working out amounts under subsection (3): (a) subject to paragraph (b), include amounts payable on the exercise of options and incentive rights, and amounts paid out of any related ESS contribution plan; and (b) do not include any amounts that are excluded from the monetary cap under section 1100ZB. Amount of the monetary cap (5) The monetary cap for a primary participant for a 12‑month period (the current period) is the sum of: (a) the amount referred to in subsection (6); and (b) 70 per cent of the amount of any distributions received in the current period by the participant or a related person on an ESS interest acquired under the scheme (whether under the offer mentioned in subsection (1) or under another offer); and (c) 70 per cent of the amount of any cash remuneration received in the current period by the participant, to the extent the remuneration was conditional on the achievement of objectives; and (d) if the current period is not the first 12‑month period—the sum of any amount carried forward under subsection (7) for each previous 12‑month period that started: (i) at or after the start of the first 12‑month period; and (ii) not earlier than 4 years before the start of the current period. (6) The amount (the basic cap amount) is: (a) unless paragraph (b) applies—$30,000; or (b) if an amount is prescribed in the regulations for the purposes of this paragraph—that amount. Carry‑forward of unused cap (7) If the amount worked out for a 12‑month period by: (a) starting with the lesser of: (i) the basic cap amount; and (ii) the amount that would be worked out under subsection (3) and in accordance with subsection (4), if the only amounts included were amounts payable on the exercise of options and incentive rights; and (b) subtracting the total amount paid in the 12‑month period by the participant and each related person under the terms of any offer made in connection with any employee share scheme operated by the body corporate or an associate of the body corporate on the exercise of options and incentive rights; is greater than nil, then that amount is carried forward for the purposes of paragraph (5)(d). Regulations may provide other ways of complying with this section (8) An offer also complies with this section if the offer is of a kind prescribed by the regulations for the purposes of this subsection. 1100ZB Amounts that are excluded from the monetary cap (1) Each amount mentioned in a subsection of this section is not included in working out under section 1100ZA whether an offer breaches the monetary cap. (2) An amount paid into an ESS contribution plan for the offer. (3) An amount payable by a participant or related person for the issue or sale of ESS interests to the extent that, under the terms of the offer, the amount can only become payable during a liquidity period for the ESS interests. (4) An amount payable on the exercise of options or incentive rights to the extent that, under the terms of the offer, the amount can only become payable during a liquidity period for the underlying ESS interests. (5) An amount payable by an ESS participant for the issue or sale of ESS interests to the extent that, under the terms of the offer: (a) the amount can only become payable no longer than 7 days before the start of a liquidity period for the ESS interests; and (b) all application money received from ESS participants before the start of a liquidity period must be held on trust for the ESS participants until: (i) the start of the liquidity period; or (ii) the money is returned to the ESS participants; and (c) if application money needs to be returned to an ESS participant, it must be returned as soon as practicable. (6) An amount payable by an ESS participant on the exercise of options or incentive rights to the extent that, under the terms of the offer: (a) the amount can only become payable no longer than 7 days before the start of a liquidity period for the underlying ESS interests; and (b) all application money received from ESS participants before the start of a liquidity period must be held in trust for the ESS participants until: (i) the start of the liquidity period; or (ii) the money is returned to the ESS participants; and (c) if application money needs to be returned to an ESS participant, it must be returned as soon as practicable. Liquidity period for ESS interests (7) A liquidity period for an ESS interest is a period during which: (a) the ESS interest is in a class of interests that is able to be traded on the official list of a financial market covered by section 1100K; or (b) an executed sale agreement constituting an offer to acquire ESS interests in the same class as the ESS interest is open for acceptance; or (c) a circumstance prescribed by the regulations for the purposes of this paragraph exists. Regulations may prescribe other amounts (8) The regulations may prescribe an amount for the purposes of this subsection. Subdivision D—Making offers under this Division 1100ZC Making offers under this Division (1) This section applies (subject to section 1100ZG) in relation to an offer for the issue, sale or transfer of ESS interests in connection with an employee share scheme if the offer is eligible to be made under this Division (see Subdivision C). Relief relating to disclosure (2) Parts 6D.2 and 6D.3 do not apply in relation to the offer. (3) Part 7.9 does not apply in relation to the offer, or any issue or sale of the i