EXPLANATORY STATEMENT
ISSUED BY THE MINISTER FOR SUPERANNUATION AND CORPORATE LAW ACTING FOR AND ON BEHALF OF THE MINISTER FOR FINANCE AND DEREGULATION
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
DECLARATION UNDER SECTION 3D
SUPERANNUATION (PRODUCTIVITY BENEFIT) (2008-2009 CONTINUING CONTRIBUTIONS) DECLARATION 2008
The Superannuation (Productivity Benefit) Act 1988 (the PB Act) provides superannuation arrangements, based on the minimum employer superannuation requirements in the Superannuation Guarantee (Administration) Act 1992 (SGAA), for certain Australian Government employees, office holders and contractors (employees).
The superannuation arrangements under the PB Act were closed to new employees from 1 July 2006. However, they continue to apply to persons who were covered by the Act on 30 June 2006 until they cease relevant employment or become a member of an Australian Government superannuation scheme.
In accordance with section 3C of the PB Act, employer contributions under the Act (known as continuing contributions) are calculated by reference to amounts specified in a table in the Schedule to the Act. Contributions for employees earning more than a salary threshold specified in the table are limited to 9 per cent of the salary threshold. The threshold is based on the maximum contribution base in the SGAA. Employers are not required to provide superannuation on an employee’s earnings above the maximum contribution base.
Section 3D of the Act provides that amounts specified in the table in the Schedule to the Act can be updated by declaration of the Minister in respect of future contributions.
This Declaration, made under section 3D of the PB Act and cited as the Superannuation (Productivity Benefit) (2008-2009 Continuing Contributions) Declaration 2008, substitutes new amounts in the table of continuing contributions in the Schedule to the Act in relation to the financial year commencing on 1 July 2008. These changes take account of the updated maximum contribution base in the SGAA for that year.
The changes to the amounts specified in the Schedule to the Act made by the Declaration:
(a) increase the salary threshold specified in the Schedule from $2,805.38 to $2,936.92 per week;
(b) specify that the contributions payable under the Act for employees with salaries exceeding the new salary threshold amount is a flat dollar amount of $264.32 per week; and
(c) specify that the contributions for employees on salaries between $150.33 per week and $2,936.92 per week is 9 per cent of the person’s salary.
The flat rate superannuation contribution of $13.53 per week (9 per cent of $150.33 per week) is retained for lower paid wage earners whose weekly rate of salary is less than $150.33.
The Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LI Act).
No consultation was undertaken in relation to this Declaration. In accordance with paragraph 18(2)(a) of the LI Act, consultation was considered to be unnecessary because the instrument is of a minor or machinery nature.
The Declaration commences on 1 July 2008.
Overview
The Superannuation (Productivity Benefit) (2008-2009 Continuing Contributions) Declaration 2008 was enacted to update the superannuation arrangements under the Superannuation (Productivity Benefit) Act 1988 for Australian Government employees, office holders, and contractors. This legislative instrument was introduced to address the need for periodic adjustments to superannuation contributions in line with changes to the maximum contribution base in the Superannuation Guarantee (Administration) Act 1992. The Declaration, made by the Minister for Superannuation and Corporate Law on behalf of the Minister for Finance and Deregulation, modifies the salary threshold and corresponding superannuation contributions for the financial year commencing 1 July 2008. The policy objective is to ensure that superannuation arrangements remain aligned with the broader superannuation guarantee system and to provide clarity and continuity for affected employees.
Scope and Application
The Superannuation (Productivity Benefit) (2008-2009 Continuing Contributions) Declaration 2008 applies to employers and employees covered by the Superannuation (Productivity Benefit) Act 1988, specifically those who were already subject to the Act on 30 June 2006. The Declaration pertains to the calculation and updating of employer contributions for superannuation arrangements of certain Australian Government employees, office holders, and contractors, even though the arrangements are closed to new employees as of 1 July 2006. The changes outlined in the Declaration modify the amounts specified in the Schedule to the PB Act, reflecting the updated maximum contribution base in the Superannuation Guarantee (Administration) Act 1992 for the financial year starting on 1 July 2008. These changes include increasing the salary threshold for superannuation contributions and specifying new contribution rates based on the employee's salary, while maintaining the flat rate for lower-paid employees. This legislative instrument, considered of a minor or machinery nature, does not require consultation and operates under the Legislative Instruments Act 2003.
Key Provisions
The Superannuation (Productivity Benefit) (2008-2009 Continuing Contributions) Declaration 2008 (the Declaration) updates the continuing contributions under the Superannuation (Productivity Benefit) Act 1988 (the PB Act) for the financial year commencing on 1 July 2008. This update aligns with the new maximum contribution base specified in the Superannuation Guarantee (Administration) Act 1992. Under section 3D of the PB Act, the Minister is authorised to make such declarations to adjust the specified amounts in the table of continuing contributions in the Schedule to the Act. The changes introduced by the Declaration primarily affect the salary threshold and the corresponding contributions for employees.
The Declaration mandates that the salary threshold for calculating contributions be increased from $2,805.38 to $2,936.92 per week. For employees earning more than this new threshold, the superannuation contribution is capped at a flat dollar amount of $264.32 per week. For employees earning between $150.33 and $2,936.92 per week, the contribution remains at 9 per cent of their salary. Notably, the flat rate superannuation contribution of $13.53 per week (9 per cent of $150.33) is retained for those earning less than $150.33 per week.
Entities governed by the PB Act, particularly employers of the covered employees, must adhere to the new contribution rates specified in the Declaration. Employers are obligated to calculate and remit the updated superannuation contributions in accordance with the new salary thresholds and contribution rates. Failure to comply with these requirements could result in non-compliance with the Act and potential penalties.
Breaches of the requirements set out in the PB Act and the Declaration can lead to both civil and criminal consequences. Employers found to be non-compliant may face civil penalties, including fines. The exact penalty amount is not specified in the text, but generally, the penalties for non-compliance with superannuation laws can be substantial. Additionally, if the non-compliance is deemed to be wilful or involves serious breaches, criminal charges could be pursued, resulting in fines and, in some cases, imprisonment for responsible individuals. The precise penalties would depend on the nature and extent of the breach, as well as any relevant case law.