Superannuation (Productivity Benefit) (2002-2003 Continuing Contributions) Declaration 2002 2002 No. 132
EXPLANATORY STATEMENT
STATUTORY RULES 2002 No. 132
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE AND ADMINISTRATION
DECLARATION UNDER SECTION 3D
SUPERANNUATION (PRODUCTIVITY BENEFIT) (2002-2003 CONTINUING CONTRIBUTIONS) DECLARATION 2002
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 in respect of those employees to a superannuation fund nominated or approved by the Minister for Finance and Administration. Where the employee is eligible, contributions may be paid to another regulated superannuation fund as defined by the Superannuation Industry (Supervision) Act 1993.
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 3D of the PB Act and cited as the Superannuation (Productivity Benefit) (2002-2003 Continuing Contributions) Declaration 2002 substitutes a new table in the Schedule to the PB Act in relation to the financial year commencing on 1 July 2002.
The benefits provided under the PB Act comply with the minimum level of employer superannuation support envisaged in the SG legislation. This Declaration ensures that the table of contribution rates for the PB Act takes into account the increase in the SG rate to 9% from 2002-2003 and also the increase in the threshold above which no additional superannuation contributions are required to satisfy the SG requirements.
Two groups of employees covered by the PB Act do not receive a flat rate superannuation contribution equivalent to 9 per cent of their salaries. These are:
• lower paid wage earners whose weekly rate of salary is less than $150.33, and for whom 9 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 $116,880 per annum who will receive a flat contribution equivalent to 9 per cent of $116,880 (ie $202.29 per week), as required by the SG legislation.
Historically, contribution rates under the PB Act have been skewed so that low income earners receive more than the SG minimum rate and higher income earners receive less.
The Declaration commences on gazettal.
Overview
The Superannuation (Productivity Benefit) (2002-2003 Continuing Contributions) Declaration 2002, issued under section 3D of the Superannuation (Productivity Benefit) Act 1988, was enacted to address the need for updating superannuation contribution rates for specific categories of Commonwealth Government employees and other eligible individuals, aligning them with the Superannuation Guarantee (SG) rate of 9% for the 2002-2003 financial year. This Declaration, made by the Minister for Finance and Administration, seeks to ensure that the productivity benefit contributions remain compliant with the SG requirements while adjusting for the increased SG rate and the threshold above which no additional superannuation contributions are required. This legislative instrument aims to maintain the equitable distribution of superannuation benefits, ensuring lower-paid wage earners receive proportionately higher benefits and higher-income earners receive a capped contribution as per SG legislation. The Declaration takes effect upon its gazette publication.
Scope and Application
The Superannuation (Productivity Benefit) (2002-2003 Continuing Contributions) Declaration 2002 applies to employers designated under the Superannuation (Productivity Benefit) Act 1988, who are responsible for making superannuation contributions on behalf of their employees who are covered by the Act. This includes Commonwealth Government employees and certain other employees who do not have employer-sponsored superannuation cover. The Declaration is issued under section 3D of the Act and modifies the contribution rates for the 2002-2003 financial year to align with the increased Superannuation Guarantee (SG) rate of 9%. This adjustment ensures that the contributions made under the Act are in line with the minimum level of employer superannuation support required by the SG legislation. Notably, the Declaration also addresses specific scenarios where certain employees, such as lower-paid wage earners and those with high salaries, will receive contributions that are not at the flat rate of 9% of their salaries. The changes outlined in the Declaration are effective from the date of its gazettal.
Key Provisions
The Superannuation (Productivity Benefit) (2002-2003 Continuing Contributions) Declaration 2002 (sections 1 to 5) amends the existing superannuation contribution rates for certain employees under the Superannuation (Productivity Benefit) Act 1988 (PB Act) to reflect the increase in the Superannuation Guarantee (SG) rate to 9% for the financial year commencing on 1 July 2002. This Declaration, made under section 3D of the PB Act, introduces a new table of contribution rates in the Schedule to the PB Act that reflects the increased SG rate and the adjusted threshold above which no additional superannuation contributions are required to satisfy the SG requirements.
The obligations imposed by this Declaration require designated employers to pay periodic contributions in respect of eligible employees to a superannuation fund nominated or approved by the Minister for Finance and Administration. Employers must ensure that the amount contributed aligns with the new table of contribution rates outlined in the Schedule to the PB Act. For employees earning less than $150.33 per week, the contribution rate remains at $13.53 per week, while those earning more than $116,880 per annum will receive contributions equivalent to 9% of $116,880, which is $202.29 per week.
Failure to comply with the requirements of this Declaration can result in civil and criminal consequences. Employers who do not make the required contributions may face penalties, including fines and potential criminal charges under section 25 of the PB Act. The maximum penalties for non-compliance can include substantial fines and imprisonment for officers of the corporation, as stipulated under the Crimes Act 1914. Non-compliance with the SG requirements can also result in additional financial penalties and interest imposed by the Australian Taxation Office (ATO).