Superannuation (Productivity Benefit) 1997-98 Continuing Contributions
Declaration 1997 No. 144
EXPLANATORY STATEMENT
STATUTORY RULES 1997 No. 144
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
DECLARATION UNDER SECTION 3D
VARIATION OF TABLE
The Superannuation (Productivity Benefit) Act 1988 (the PB Act) provides the mechanism by which the Superannuation Guarantee (SG) is made available to the Australian Government employees who have no other employer sponsored superannuation coverage. Prior to 1 July 1992, the PB Act provided productivity superannuation to these employees.
The designated employers of such employees are required to pay to the superannuation fund nominated by the Minister for Finance, or another superannuation fund approved by the Minister or to a regulated fund under the Superannuation Industry Supervision legislation (where the employee is eligible), periodic contributions based on the salary of the employee. The amount to be contributed is calculated using a table set out in the Schedule to the Act. The Table is structured so that a proportionately greater benefit is provided to lower paid wage earners. The amount to be contributed is adjusted where the employee is not employed full-time. The rates in this table apply for the 1997-98 financial year.
The benefits provided under the Act comply with the minimum requirements of the SG legislation. The only employees receiving superannuation under the Act who do not receive a flat rate superannuation contribution equivalent to 6 per cent of their salaries are those for whom that amount would represent a reduction (ie below the minimum weekly benefit for lower paid wage earners of $13.53) and those on salaries in excess of $94,520 per annum who receive a flat contribution equivalent to 6 per cent of $94,520 (ie $109.06 per week), as required by the SG legislation.
The Declaration commences on 1 July 1997.
Overview
The Superannuation (Productivity Benefit) Act 1988 was enacted to ensure that Australian Government employees who do not receive employer-sponsored superannuation coverage still receive the Superannuation Guarantee (SG). This Act was introduced to address the gap in superannuation coverage for certain government employees, providing them with the minimum required benefits under the SG framework. The policy objective is to ensure compliance with the minimum SG requirements for these employees. The Superannuation (Productivity Benefit) 1997-98 Continuing Contributions Declaration 1997 No. 144, issued under the authority of the Minister for Finance, specifies the rates for the 1997-98 financial year, ensuring that designated employers make the appropriate contributions to the superannuation funds of eligible employees, with adjustments made for part-time employment and high-income earners.
Scope and Application
The Superannuation (Productivity Benefit) 1997-98 Continuing Contributions Declaration 1997 No. 144 applies to employers designated under the Superannuation (Productivity Benefit) Act 1988. These designated employers are required to make contributions to a superannuation fund on behalf of their employees who are Australian Government employees and do not have any other employer-sponsored superannuation coverage. The contributions are calculated based on the employee's salary, with adjustments made for part-time employment, and are intended to provide a proportionately greater benefit to lower paid wage earners. The application of the Act is national in scope, impacting designated employers across Australia. There are no exclusions specified within the Declaration itself, but the benefits provided comply with the minimum requirements of the Superannuation Guarantee legislation, which includes certain threshold conditions for superannuation contributions. The Declaration supplements the primary Act by setting the specific rates for the 1997-98 financial year, thereby extending its application through subordinate instruments.
Key Provisions
The Superannuation (Productivity Benefit) 1997-98 Continuing Contributions Declaration 1997 No. 144, issued under the authority of the Minister for Finance, primarily varies the table in the Superannuation (Productivity Benefit) Act 1988 (the PB Act) to set the rates of continuing contributions for the 1997-98 financial year. This Declaration (section 3D) modifies the rates at which designated employers must contribute to superannuation funds for Australian Government employees who do not have other employer-sponsored superannuation coverage. Employers are required to make these contributions to either the superannuation fund nominated by the Minister for Finance, another approved fund, or to a regulated fund under the Superannuation Industry Supervision legislation, depending on the employee's eligibility. The rates in the table are structured to ensure that a proportionately greater benefit is provided to lower-paid wage earners.
Under this Act, designated employers bear the obligation to calculate and remit the specified contributions based on the employee’s salary. The contributions are adjusted for part-time employees to reflect their pro-rata entitlement. The contribution rates are derived from the table set out in the Schedule to the Act, which is updated annually to align with the financial year. Employers must ensure that these contributions are made periodically, as required by the legislation. This obligation extends to accurately calculating the contributions, which involves understanding the employee's salary and employment status, and then ensuring the correct amount is remitted to the designated superannuation fund.
Failure to comply with the requirements of this Act can result in various consequences. Employers who do not remit the required contributions may be subject to penalties, including financial fines. The precise nature and extent of these penalties are determined by the Superannuation Guarantee Charge (Administration) Act 1992 and other relevant legislation. Additionally, non-compliance can lead to legal action by the Commissioner of Taxation or the Australian Taxation Office. In severe cases, repeated or significant non-compliance might result in more stringent penalties, including imprisonment for individuals found guilty of wilful default. These penalties serve as a deterrent to ensure that employers adhere to their obligations under the Act.