EXPLANATORY STATEMENT

Issued by authority of the Assistant Treasurer and Minister for Financial Services

Superannuation Guarantee (Administration) Act 1992

Superannuation Guarantee (Administration) Amendment (Aged Care Registered Nurses’ Payment) Regulations 2022

The Superannuation Guarantee (Administration) Act 1992 (the Act) governs the arrangements that apply to the superannuation contributions that an employer must make in order to avoid being subject to a superannuation guarantee charge.

Section 80 of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. Paragraph 27(1)(e) of the Act refers to prescribed kinds of salary or wages that are excluded from calculating the superannuation guarantee payable by an employer in respect of an employee

The Superannuation Guarantee (Administration) Amendment (Aged Care Registered Nurses’ Payment) Regulations 2022 (the Regulations) ensure that an employer is not required to make additional superannuation contributions as a result of a payment paid to an employee under the Aged Care Registered Nurses’ Payment to reward clinical skills and leadership (the Grant). The Regulations achieve this by exempting payments made to an employee under the Grant from being included in the “salary or wages” that are used to calculate an employer’s superannuation guarantee charge.

In the 2021-22 Budget, the then Government announced that the Grant will fully fund payments to registered nurses working in aged care. This payment recognises the integral role of registered nurses in delivering high quality care for senior Australians. Payments will help with the attraction and retention of registered nurses in the aged care sector.

The Regulations apply to payments made under the Grant on or after 1 November 2022. Eligible employers may apply for the Grant on behalf of their eligible employees from 1 November 2022. Eligible employers will make the payment to their eligible employees (including at a pro‑rata rate for part‑time employees).

Public consultation on the Regulations was not undertaken as the amendments are minor or machinery in nature. However, consultation was conducted with the Department of Health and Aged Care who support making the Regulations.

Details of the Regulations are set out in Attachment A.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

The Regulations commenced on the day after this instrument is registered on the Federal Register of Legislation.

Regulation Impact Statement

The Office of Best Practice Regulation advised the proposal is unlikely to have a more than minor regulatory impact, and therefore the preparation of a Regulation Impact Statement was not required (OBPR22-01854). As employers are responsible for applying on behalf of their eligible registered nurses, grant recipients will receive 5 per cent of the total funding to ease the administrative burden.

A statement of Compatibility with Human Rights is at Attachment B.

ATTACHMENT A

Details of the Superannuation Guarantee (Administration) Amendment (Aged Care Registered Nurses’ Payment) Regulations 2022  

Section 1 – Name of the Regulations

This section provides that the name of the Regulations is the Superannuation Guarantee (Administration) Amendment (Aged Care Registered Nurses’ Payment) Regulations 2022 (the Regulations).

Section 2 – Commencement

Schedule 1 to the Regulations commence on the day after the instrument is registered.

Section 3 – Authority

The Regulations are made under the Superannuation Guarantee (Administration) Act 1992 (the Act).

Section 4 – Schedule(s)

This section provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in the Schedule to this instrument has effect according to its terms.

Schedule 1 – Amendments  

Item 1 inserts a new paragraph 12(1)(g) into the Superannuation Guarantee (Administration) Regulations 2018. This new paragraph exempts an employer from being required to make superannuation contributions, or pay a superannuation guarantee charge, in respect of a payment made to an employee on or after 1 November 2022, that was funded as part of the program established by the Commonwealth and known as the Aged Care Registered Nurses Payment to reward clinical skills and leadership (the Grant).

The Grant funds payments to eligible registered nurses working in aged care. This payment recognises the integral role of registered nurses in delivering high quality care for senior Australians. The Grant is paid to employers on the condition that the funds be used to make payments to their eligible employees. The Regulations exclude those payments from the calculation of the amount of superannuation contribution that an employer must make to avoid being liable for a superannuation guarantee charge, or where an employer does not elect to make superannuation contributions in respect of their employees, the superannuation guarantee charge payable.

This ensures that employers do not incur superannuation guarantee‑related liabilities as a result of their employees receiving a payment under the Grant.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Superannuation Guarantee (Administration) Amendment (Aged Care Registered Nurses’ Payment) Regulations 2022

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Superannuation Guarantee (Administration) Amendment (Aged Care Registered Nurses’ Payment) Regulations 2022 exempt an employer from being required to make a superannuation contribution (in order to avoid a superannuation guarantee charge liability) in respect of a payment made by the employer to an employee under the Grant.

Human rights implications

The Regulations engage the right to social security under Article 9 of the International Covenant on Economic, Social and Cultural Rights as it exempts an employer from having to make a superannuation contribution in respect of a payment that is funded by the Government. Making a superannuation contribution reduces the superannuation guarantee charge liability that is payable by the employer. As the payments are a form of remuneration, this exemption lowers the superannuation contributions by the employer than would otherwise be the case.

Without the exemption, employers will incur additional costs associated with participating in the Grant and may chose not to apply. This would result in employees not receiving the payment at all. Exempting the payment from being included in the superannuation guarantee charge calculation ensures that no additional costs are incurred by an employer who chooses to participate and is therefore an acceptable limitation on the right to work.

Conclusion

This Legislative Instrument is compatible with human rights as it is a reasonable, necessary and proportionate limitation on human rights.