Superannuation (Productivity Benefit) 1998-99 Continuing Contributions
Declaration 1998 No. 170
EXPLANATORY STATEMENT
STATUTORY RULES 1998 No. 170
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE AND ADMINISTRATION
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) minimum superannuation contribution is made available to Australian Government employees (and certain other employees) who have no other employer-sponsored superannuation cover. Prior to 1 July 1992, the PB Act provided productivity superannuation to these employees.
Since 1 July 1990, the designated employers of employees covered by the PB Act arrangements have been required to pay periodic contributions based on the salary of the employee to the superannuation fund nominated by the Minister for Finance and Administration, or another superannuation fund approved by the Minister. Where the employee is eligible, contributions may be paid to a regulated fund as defined by the Superannuation Industry Supervision legislation. 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.
This Declaration, made under section 3D of the PB Act and cited as the Superannuation (Productivity Benefit) 1998-99 Continuing Contributions Declaration provides substituted amounts for the Table in the Schedule to the Act in relation to the financial year which commenced on 1 July 1998.
The benefits provided under the PB Act comply with the requirements of the SG legislation. The only employees receiving superannuation under the Act who do not receive a flat rate superannuation equivalent to 7 per cent of their salaries (as provided under SG), 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 $97,920 per annum who receive a flat contribution equivalent to 7 per cent of $97,920 (ie $131.82 per week), as required by the SG legislation. Historically, the benefit is skewed so that low income earners receive more than 7 per cent of salary while higher income earners receive less.
The Declaration commenced on gazettal.
Overview
The Superannuation (Productivity Benefit) 1998-99 Continuing Contributions Declaration 1998 No. 170 is a statutory instrument issued under the authority of the Minister for Finance and Administration to provide variations to the table in the Superannuation (Productivity Benefit) Act 1988. This Act was enacted to address the need for a minimum level of superannuation contributions for Australian Government employees and certain other employees who do not have employer-sponsored superannuation cover. The Declaration, which came into effect upon gazettal, adjusts the productivity benefit contributions for the financial year beginning 1 July 1998, ensuring that these contributions align with the Superannuation Guarantee legislation. The policy objective is to provide a fair and proportionate superannuation benefit, particularly favouring lower paid employees, while complying with the broader superannuation legislative framework.
Scope and Application
The Superannuation (Productivity Benefit) 1998-99 Continuing Contributions Declaration applies to Australian Government employees and certain other employees who are not covered by other employer-sponsored superannuation arrangements. This legislation is a variation of the table set out in the Superannuation (Productivity Benefit) Act 1988, which provides a productivity superannuation benefit to these employees. The Act mandates that designated employers of employees covered by the Productivity Benefit arrangements must make periodic contributions based on the employee's salary to a superannuation fund nominated by the Minister for Finance and Administration or an approved fund. These contributions are calculated using a table in the Schedule to the Act, which ensures that lower paid wage earners receive a proportionately greater benefit. The Declaration adjusts the amounts for the financial year commencing 1 July 1998 and ensures compliance with the Superannuation Guarantee legislation, which mandates a flat rate superannuation contribution of 7 per cent of salary. The legislation applies across Australia, extending the geographic reach to include all employees within the specified categories regardless of location within the country.
Key Provisions
The Superannuation (Productivity Benefit) 1998-99 Continuing Contributions Declaration 1998 No. 170, made under section 3D of the Superannuation (Productivity Benefit) Act 1988 (PB Act), sets out the specific amounts for the contributions employers must make to the superannuation funds of eligible employees for the financial year commencing 1 July 1998. This Declaration is intended to update the contribution amounts according to the productivity benefit provisions of the Act, which aim to provide a minimum level of superannuation for certain employees who do not have access to other employer-sponsored superannuation arrangements. The Declaration directly modifies the table in the Schedule to the PB Act, providing new contribution rates that reflect the financial year in question.
The primary obligation for employers under this Declaration is to ensure that they make the correct contributions to the superannuation funds of eligible employees. These contributions must be based on the employee's salary and are to be made periodically to the superannuation fund nominated by the Minister for Finance and Administration, or another approved fund. The amount to be contributed is determined by the rates specified in the Declaration, which vary depending on the employee's salary and whether they are employed full-time or part-time. Employers must ensure that these contributions are made in accordance with the specified rates to comply with the requirements of the PB Act.
There are no explicit offences or penalties outlined in the Declaration itself, but breaches of the requirements to make contributions as specified by the PB Act and this Declaration could lead to legal consequences. Employers who fail to make the required contributions could face civil actions from their employees for non-compliance with superannuation guarantee laws. Additionally, the Australian Taxation Office (ATO) may impose penalties and interest on any unpaid superannuation contributions, further underscoring the importance of compliance with the PB Act and this Declaration. The specific penalties for non-compliance with superannuation laws are set out in other related legislation, such as the Superannuation Industry (Supervision) Act 1993, and can include substantial fines and interest charges.