Superannuation (CSS) (Eligible Employees - Exclusion) Amendment Declaration 2005 (No. 1)

Administered by Department of Finance

Legislation au F2005L01861 Not in force Legislative Instrument

Legislation content

explanatory statement

Issued by the authority of the Minister for Finance and Administration

Superannuation Act 1976

Declaration under paragraph (j) of the definition of eligible employee included in subsection 3(1)

The Superannuation Act 1976 (the Act) makes provision for and in relation to the Commonwealth Superannuation Scheme (CSS) for Australian Government employees and for certain other persons.

Subsection 3(1) of the Act contains the definition of the term ‘eligible employee’ that describes various classes of persons who may contribute to the CSS (ie CSS members).  Paragraph (j) of the definition provides that the Minister may declare a class of persons not to be CSS members.

The Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 (the Principal Declaration) identifies the persons who are declared not to be CSS members under paragraph (j) of the definition of eligible employee. In most cases the classes of persons declared not to be CSS members in respect of particular employment will include persons who are, or who are required to become, a member of a ‘superannuation scheme’ in respect of that employment and persons who become a member of such a ‘superannuation scheme’ at a later date.

The purpose of the Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 1) (the Amending Declaration) is to amend the Principal Declaration to ensure that the choice of superannuation fund requirements do not change the intention of the Principal Declaration.

Part 2 of the Principal Declaration identifies the classes of persons, including those listed in Schedule 1 of the Principal Declaration, who cease to be CSS members when certain conditions are met.  A person ceases to be a CSS member if they are or are required to be a member of a ‘superannuation scheme’ as defined in section 3(1) of the Principal Declaration.

Part 3 of the Principal Declaration identifies the classes of persons who are not CSS members.  They are excluded from being CSS members if they have membership of a ‘superannuation scheme’ as defined in section 3(1) of the Principal Declaration.

The definition of the term ‘superannuation scheme’ in the Principal Declaration relies on a ‘superannuation scheme’ applying to a person because they are engaged in certain employment.  For Parts 2 and 3 of the Principal Declaration the definition of ‘superannuation scheme’ does not cover contributions to a superannuation fund where there is no common employment‑related feature shared by the members or a Retirement Savings Account (RSA).

From 1 July 2005, most employers making superannuation guarantee contributions on behalf of an employee will be required to provide employees with a choice of superannuation fund to which those contributions will be paid.  Employer contributions made to the CSS, the Public Sector Superannuation Scheme or in accordance with the Superannuation (Productivity Benefit) Act 1988 are exempt from the choice of superannuation fund requirements.  Employers who have employees in alternative arrangements are likely to have to comply with the choice of superannuation fund requirements in respect of those employees.

Persons excluded from the CSS by membership of a ‘superannuation scheme’ related to their employment in accordance with the definition of ‘superannuation scheme’ in the Principal Declaration may not continue to be excluded if they exercise choice to move to a superannuation fund that is not a scheme applying to that person because they are engaged in that employment.  If the definition of ‘superannuation scheme’ is not changed to recognise that most employees are to be offered choice of superannuation fund from 1 July 2005 the result could be that these employees may unintentionally become CSS members.

From 1 July 2005, the Amending Declaration amends the definition of ‘superannuation scheme’ and introduces a new definition, ‘alternative superannuation scheme’, so as to cover any superannuation fund or RSA.

The Amending Declaration generally provides that persons excluded from being CSS members will continue to be ineligible for CSS membership because of employer contributions made in relation to particular employment that is paid to a superannuation fund with or without a common employment‑related feature shared by the members or to an RSA.

The Amending Declaration includes some technical amendments to clarify some provisions in the Principal Declaration.

The Amending Declaration has been prepared in consultation with the Office of Legislative Drafting and Publishing.  No further consultation is required as the instrument is machinery in nature and does not substantially alter existing arrangements.

The Amending Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Amending Declaration commences on 1 July 2005.

The details of the Amending Declaration are explained in the Attachment.


Attachment

Superannuation (CSS) (Eligible Employees – EXclusion) Amendment Declaration 2005 (No. 1)

Section 1

This section provides that the name of the Declaration is the Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 1).

Section 2

This section provides for the Declaration to commence on 1 July 2005.

Section 3

This section provides that Schedule 1 of the Declaration amends the Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 (the Principal Declaration).

Schedule 1 – Amendments

Item 1 inserts a definition of alternative superannuation scheme into subsection 3(1) of the Principal Declaration.  The definition is used in some of the provisions in Schedule 1 of the Principal Determination to exclude certain people from being eligible employees (ie CSS members).  The definition is limited to a superannuation scheme that is receiving contributions in relation to a person’s employment or holding of an office.

There are some exceptions to the definition so that a person having contributions made to a superannuation scheme that would otherwise be an alternative superannuation scheme remains a CSS member.  These exceptions were previously included in the definition of ‘superannuation scheme’ and various provisions in the Principal Declaration which are amended by items 10 to 16.  These exceptions are:

  • contributions made to a superannuation scheme in relation to another employment or holding of another office;
  • where membership of a superannuation scheme is only for the preservation or payment of productivity related benefits as defined in section 110A of the Superannuation Act 1976;
  • participation in a superannuation scheme on behalf of a member solely for the employer satisfying their obligations under the Superannuation Guarantee (Administration) Act 1992;
  • a superannuation scheme to which contributions are made in relation to a person only in relation to performance pay;
  • for a prescribed person (see item 4), a superannuation scheme to which a person is taken to be a member for top-up purposes (salary sacrifice arrangements) under subsection 3(2); or
  • a member of the Police Force of the Northern Territory, who under their conditions of service, is contributing to the Northern Territory Police Supplementary Benefit Scheme.

Item 2 inserts a definition of member in relation to a Retirement Savings Account (RSA) into subsection 3(1) of the Principal Declaration.  The definition includes as a member of a superannuation scheme a person who holds an RSA.

Item 3 amends the definition of performance pay in subsection 3(1) of the Principal Declaration to include a payment made under an agreement under Part VIB of the Industrial Relations Act 1988 that was in force before 15 November 1996.

Item 4 inserts a definition of prescribed person into subsection 3(1) of the Principal Declaration.  This item is used to limit the exception in subparagraph (b)(v) of the definition of alternative superannuation scheme to persons who can choose whether to take part of their remuneration in a non-monetary form.  This removes the need for subsections 6(2) and 7(2) of the Principal Declaration.  As a consequence of the amendments made by item 4, item 9 omits subsection 6(2) of the Principal Declaration and item 17 omits subsection 7(2) of the Principal Declaration.

Item 5 substitutes a new definition of superannuation scheme in subsection 3(1) of the Principal Declaration to mean any scheme, fund or arrangement that pays superannuation or retirement benefits and expands the definition to include an RSA within the meaning of the Retirement Savings Account Act 1997.

Item 6 omits subsection 3(4) from the Principal Declaration as a consequence of the new definition of alternative superannuation scheme and its application.

Item 7 omits section 4 of the Principal Declaration as a consequence of the new definition of alternative superannuation scheme and its application.

Item 8 amends paragraph 6(1)(b) of the Principal Declaration to exclude a person from becoming a CSS member if the person is a member of an alternative superannuation scheme.

Parts 2 and 3 of the Principal Declaration identify those classes of people who either cease being or are not CSS members under the Principal Declaration.  A number of provisions exclude people from CSS membership under the Principal Declaration if they are members of a superannuation scheme, as currently defined in the Principal Declaration, except if:

  • the superannuation scheme is the CSS or a scheme to which contributions are made in relation to the person only in relation to performance pay; or
  • the person is a person who can choose whether to take part of their remuneration in a non-monetary form and the scheme membership is taken to be for top-up purposes.

These exceptions are now included in the definition of alternative superannuation scheme.  Items 10 to 16 amend various provisions of the Principal Declaration to replace the existing provisions with a reference to membership of an alternative superannuation scheme.

 

Overview

The Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 1) amends the Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 (Principal Declaration) under the Superannuation Act 1976 to address the issue of employees being unintentionally included as members of the Commonwealth Superannuation Scheme (CSS) due to changes in superannuation choice requirements. The Superannuation Act 1976, enacted in 1976, establishes the CSS for Australian Government employees and other persons. From 1 July 2005, employers were required to offer employees a choice of superannuation fund, which could result in employees who were previously excluded from CSS membership being inadvertently included if they chose a superannuation fund that did not meet the existing definition of a superannuation scheme in the Principal Declaration. The enacting body is the Minister for Finance and Administration, and the policy objective is to ensure that the choice of superannuation fund requirements do not alter the intended exclusions from CSS membership. The Amendment Declaration clarifies and expands the definition of "superannuation scheme" and introduces the term "alternative superannuation scheme" to include any superannuation fund or Retirement Savings Account, thereby maintaining the intended exclusions from CSS membership. The Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 1) is a legislative instrument prepared in consultation with the Office of Legislative Drafting and Publishing, and it does not require further consultation as it is machinery in nature and does not substantially alter existing arrangements. The Amendment Declaration commences on 1 July 2005 and includes technical amendments to various provisions in the Principal Declaration to align with the new definitions and ensure that persons excluded from CSS membership remain excluded, regardless of their choice of superannuation fund.

Scope and Application

The Superannuation Act 1976 applies to the Commonwealth Superannuation Scheme (CSS) for Australian Government employees and other eligible persons. It governs the membership of the CSS, with the definition of 'eligible employee' found in subsection 3(1) of the Act. The Act allows the Minister to declare certain classes of persons not to be CSS members, as outlined in paragraph (j) of the definition. The Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 (Principal Declaration) identifies these excluded classes of persons, typically including those who are members of another 'superannuation scheme' related to their employment. The Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 1) amends the Principal Declaration to clarify and expand the definition of'superannuation scheme' to include any superannuation fund or Retirement Savings Account (RSA), thereby ensuring that the exclusion from CSS membership remains consistent even when employees exercise their choice of superannuation fund. This amendment is crucial to prevent unintended inclusion of employees in the CSS from 1 July 2005, when most employers are required to offer a choice of superannuation fund. The amendments made by the Amending Declaration aim to maintain the integrity of the exclusion criteria by introducing the term 'alternative superannuation scheme', which encompasses any superannuation fund or RSA. This ensures that employees who are members of such schemes remain excluded from CSS membership, irrespective of whether the scheme has a common employment-related feature. The changes include technical adjustments to various provisions in the Principal Declaration to reflect these new definitions and exceptions. The Amending Declaration was prepared in consultation with relevant authorities and is considered machinery in nature, not substantially altering existing arrangements. It commences on 1 July 2005, aligning with the new superannuation choice requirements.

Key Provisions

The Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 1) amends the Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 to refine the criteria for exclusion from the Commonwealth Superannuation Scheme (CSS) for Australian Government employees. Section 3 of the amending Declaration provides that it commences on 1 July 2005 and Schedule 1 outlines the specific amendments. Key amendments include the introduction of a new definition for 'alternative superannuation scheme' in Item 1 of Schedule 1, which is used to exclude certain individuals from CSS membership if they are members of such schemes, but with certain exceptions. The definition of 'superannuation scheme' is expanded in Item 5 to include Retirement Savings Accounts (RSAs) and any scheme, fund, or arrangement that pays superannuation or retirement benefits. This broader definition ensures that the exclusion criteria remain consistent with the legislative intent despite changes in superannuation laws. The obligations imposed by the amending Declaration on employers and employees primarily involve ensuring that the definitions and provisions within the Principal Declaration are accurately applied. Employers must ensure that their superannuation contributions comply with the new definitions, particularly regarding the choice of superannuation funds and the criteria for exclusion from CSS membership. Employees who are affected by these changes must be informed of their continued exclusion from CSS membership or any changes in their eligibility based on their superannuation arrangements. The Declaration also imposes a duty on the Minister to ensure that the legislative framework remains consistent with the overarching purpose of the Superannuation Act 1976. There are no specific offences, penalties, or civil/criminal consequences outlined within the amending Declaration itself. However, the overarching Superannuation Act 1976 provides for various penalties for non-compliance with its provisions. For instance, failure to comply with the requirements regarding superannuation contributions can result in civil penalties, and more severe breaches may lead to criminal sanctions. The Act empowers the Australian Taxation Office (ATO) to enforce compliance, and penalties can include fines and, in some cases, imprisonment for persistent or significant breaches. The precise penalties depend on the nature and severity of the non-compliance, as specified in the Superannuation Act 1976.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.