Superannuation (Productivity Benefit) (2000-2001 Continuing Contributions) Declaration 2000 2000 No. 166
EXPLANATORY STATEMENT
STATUTORY RULES 2000 No. 166
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 for Commonwealth 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 superannuation fund as defined by the Superannuation Industry Supervision legislation.
The amount to be contributed by an employer is determined from the table in the Schedule to the PB 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 31) of the PB Act and cited as the Superannuation (Productivity Benefit) (2000-2001 Continuing Contributions) Declaration 2000 substitutes a new table in the Schedule to the PB Act in relation to the financial year commencing on 1 July 2000.
The benefits provided under the PB Act comply with the requirements of the SG legislation. This Declaration ensures that the table of contribution rates take into account the increase in the SG rate to 8 per cent of salaries in 2000-2001 as provided for in the Superannuation Guarantee (Administration) Act 1992.
Two groups of employees covered by the PB Act do not receive a flat rate superannuation contribution equivalent to 8 per cent of their salaries. These are:
* lower paid wage earners whose weekly rate of salary is less than $161.85, and for whom 8 per cent of weekly salary would be less than their current weekly contribution of $13.53 (these persons will continue to receive their current contribution); and
* employees on salaries in excess of $105,200 per annum who will receive a flat contribution equivalent to 8 per cent of $105,200 (ie $161.85 per week), as required by the SG legislation.
Historically, the benefit is skewed so that low income earners receive more than the SG minimum rate while higher income earners receive less.
The Declaration commenced on gazettal.
Overview
The Superannuation (Productivity Benefit) (2000-2001 Continuing Contributions) Declaration 2000 was introduced to ensure that the contribution rates under the Superannuation (Productivity Benefit) Act 1988 align with the updated Superannuation Guarantee (SG) rate, which increased to 8% of salaries in 2000-2001. This legislative instrument, enacted by the Minister for Finance and Administration, modifies the table in the Schedule to the PB Act to reflect the new SG rate while maintaining the progressive nature of contributions that favours lower paid wage earners. This Declaration was issued under section 31) of the PB Act and was designed to address the discrepancy between the SG minimum rate and the productivity benefit contributions, particularly for lower and higher income earners, ensuring compliance with the SG legislation. The policy objective is to maintain equitable and adequate superannuation contributions for employees covered by the PB Act, particularly those without other employer-sponsored superannuation arrangements.
Scope and Application
The Superannuation (Productivity Benefit) (2000-2001 Continuing Contributions) Declaration 2000 applies to employers designated under the Superannuation (Productivity Benefit) Act 1988, specifically those employing Commonwealth Government employees and certain other employees without alternative employer-sponsored superannuation cover. This includes employers who must make periodic contributions based on employee salaries to a superannuation fund approved by the Minister for Finance and Administration. The geographic reach of this legislation is primarily Commonwealth-wide, impacting employers and employees across Australia who are covered by the Act’s provisions. The Declaration varies the contribution table in the Schedule to the PB Act to reflect the increased Superannuation Guarantee rate of 8 per cent for the financial year commencing on 1 July 2000. Notably, the Declaration excludes two groups of employees: lower paid wage earners whose weekly salary is below $161.85, who continue to receive their current weekly contribution, and high-income earners whose weekly salary exceeds $105,200 per annum, who will receive a flat contribution equivalent to 8 per cent of $105,200. This Declaration commenced on gazettal and ensures compliance with the SG legislation by adjusting contribution rates accordingly.
Key Provisions
The main operative sections of the Superannuation (Productivity Benefit) (2000-2001 Continuing Contributions) Declaration 2000 (section 3(1)) vary the table in the Schedule of the Superannuation (Productivity Benefit) Act 1988 (PB Act) to adjust the contribution rates for the financial year commencing on 1 July 2000. This adjustment is necessary to reflect the increase in the Superannuation Guarantee (SG) rate to 8 per cent of salaries as provided for in the Superannuation Guarantee (Administration) Act 1992. The new rates aim to maintain the benefit structure where lower paid wage earners receive a proportionately greater benefit while ensuring that higher income earners are also covered appropriately.
The Act imposes obligations on designated employers to make periodic contributions to the superannuation funds of employees covered by the PB Act. Employers must ensure that these contributions are made based on the new rates specified in the Declaration. The contributions are to be calculated from the updated table in the Schedule of the PB Act, ensuring that the proportionately greater benefit for lower paid wage earners is maintained, and that higher income earners are not adversely affected by the SG increase. Employers must also ensure that the contributions are paid to a superannuation fund nominated by the Minister for Finance and Administration or another approved by the Minister, as defined by the Superannuation Industry Supervision legislation.
Any breach of the obligations imposed by the Act may result in civil or criminal consequences. Employers who fail to make the required contributions, or make them incorrectly, may face penalties. The exact penalties are not specified in the explanatory statement, but generally, under the PB Act, non-compliance can result in substantial financial penalties. Additionally, failure to meet the requirements can also lead to legal action being taken against the employer, further highlighting the seriousness of adhering to the Act’s provisions.