EXPLANATORY STATEMENT
STATUTORY RULES 1983 NO 76
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976 - SUPERANNUATION (ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)
The Superannuation Act 1976 (the Act) provides a contributory superannuation scheme for Commonwealth employees.
Section 168 of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters that the Act requires or permits to be prescribed, or that are necessary or convenient to be prescribed, for carrying out or giving effect to the Act.
Persons eligible to contribute under the Act are referred to in the Act as “eligible employees”.
Sub-section 3(1) of the Act defines the term “eligible employee”. In accordance with the definition, the term does not include a person included in a prescribed class of persons. Thus, certain classes of employees may be excluded by regulation from becoming contributors. The classes of persons so excluded are prescribed in the Superannuation (Eligible Employees) Regulations.
In certain circumstances, persons who have become employed by the Commonwealth (including a Commonwealth authority or body) are permitted to remain members of the superannuation scheme of a previous employer. In such cases, the Commonwealth reimburses the other employers for the employer superannuation liability that accrues while those persons are in Commonwealth employment. Clearly, it would be appropriate for such persons to be excluded from becoming “eligible employees” but not all are so excluded by the current regulations.
This has not been a problem in the past as the persons concerned have been appointed to positions with the Commonwealth as temporary employees or as the holders of a statutory office for a term of years. Appointees to these positions may become “eligible employees” only if, inter alia, the Commissioner for Superannuation, in the exercise of a discretion given to him under the Act, issues a direction to that effect. Given the existence of the Commissioner’s discretionary power to refuse to issue such a direction, it has not been considered necessary in the past to amend the regulations to exclude these appointees from becoming “eligible employees”.
Were the Commonwealth to employ persons in circumstances similar to those referred to above but on a permanent basis, however, they would automatically come within the definition of “eligible employee” and would therefore be required to contribute under the Act. The Commonwealth would then be in the position of having to meet the accruing employer superannuation liability under two schemes for the one employee; likewise, the employee would be in the position of being required to pay contributions to two schemes simultaneously. This, of course, would be inappropriate.
The amendments to the Superannuation (Eligible Employees) Regulations therefore exclude from becoming “eligible employees” under the Act those persons:
(a) who become employed by the Commonwealth and, as a result of that employment, would be, or would be eligible to become, “eligible employees”;
(b) who remain members of a superannuation or retirement scheme of a previous employer; and
(c) in respect of whom the Commonwealth makes payments to the previous employer in respect of the accruing employer superannuation liability under that other scheme.
These amendments apply to temporary employees and statutory office-holders as well as to permanent employees.
The Statutory Rule also makes two minor drafting amendments to the Superannuation (Eligible Employees) Regulations, one to insert a definition of the term “superannuation scheme” and the other to clarify a reference to the Superannuation Act 1976.