Superannuation (Productivity Benefit) Alternative Arrangements Declaration No. 3 1991 No. 126
EXPLANATORY STATEMENT STATUTORY RULES 1991 No. 126
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988 (THE ACT) ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE DECLARATION UNDER SECTION 4A OF THE ACT
The Superannuation (Productivity Benefit) Act 1988 (the Act) is the mechanism by which a 3 per cent benefit is provided to Commonwealth employees without other superannuation coverage. The benefit is funded by contributions made by employers.
The amount to be contributed in respect of an employee is related to the weekly rate of salary for that employee. Where the employee is employed on a part-time basis, the amount to be contributed is calculated by pro-rating either salary or hours worked against a full-time equivalent in accordance with section 3C of the Act.
Statutory Rules 1990 No 415 addressed the problem of highly casual and short term employees by allowing individuals earning less than $110 per week, or whose expected period of employment is less than 3 months, to elect to have no contributions made to a fund on their behalf. Instead such employees receive an equivalent cash benefit on retirement. Employees who choose to make this election do not receive invalidity or death cover. In addition, if their total benefit is $500 or more, the normal preservation arrangements apply.
The declaration replaces the previous salary threshold ($110) for highly casual employees with a new threshold of $113. The $113 figure, like its predecessor, represents one-quarter of the minimum amount at which graduated 3 per cent contributions are required to be paid (currently $452 per week).
The declaration commences on 1 July 1991.
Overview
The Superannuation (Productivity Benefit) Alternative Arrangements Declaration No. 3 1991 No. 126 was enacted to address issues related to the application of the Superannuation (Productivity Benefit) Act 1988 for highly casual and short-term employees. This Act was established to provide a 3% benefit to Commonwealth employees who do not have other superannuation coverage, funded through employer contributions. The declaration was issued under the authority of the Minister for Finance and is aimed at ensuring that the provisions of the Act are properly applied to employees with varying employment conditions, particularly those who work on a casual or short-term basis. The key change introduced by this declaration is the adjustment of the salary threshold for highly casual employees from $110 to $113 per week, reflecting the minimum amount at which graduated contributions are required. This amendment ensures that the Act continues to provide a fair and effective mechanism for superannuation benefits for a broad range of employees.
Scope and Application
The Superannuation (Productivity Benefit) Alternative Arrangements Declaration No. 3 1991 No. 126, issued under the authority of the Minister for Finance, is an instrument that applies to Commonwealth employees without other superannuation coverage, providing them with a 3% benefit funded by employer contributions. This benefit is calculated based on the weekly salary rate of the employee, with pro-rated contributions for part-time employees. The declaration adjusts the salary threshold for highly casual and short-term employees, setting the new threshold at $113 per week, which is one-quarter of the minimum weekly salary for graduated 3% contributions. This amendment aims to streamline the process for highly casual employees, allowing those earning below $113 per week or expected to be employed for less than three months to opt for a cash benefit instead of superannuation contributions. Such employees do not receive invalidity or death cover, and if their total benefit is $500 or more, normal preservation arrangements apply. The declaration, effective from 1 July 1991, replaces the previous threshold and ensures that the application of the Act remains relevant and fair, considering changes in economic conditions and employment practices.
Key Provisions
The Superannuation (Productivity Benefit) Alternative Arrangements Declaration No. 3 1991 No. 126 establishes specific provisions under the Superannuation (Productivity Benefit) Act 1988, ensuring the operation of a 3% benefit for Commonwealth employees without other superannuation coverage. The declaration, which commenced on 1 July 1991, adjusts the salary threshold for highly casual and short-term employees, setting it at $113 per week, as per section 3C of the Act. This amount represents one-quarter of the minimum salary required for graduated 3% contributions. For employees earning less than $113 per week or whose employment is expected to be less than three months, contributions to a superannuation fund are not made, and instead, these employees receive an equivalent cash benefit on retirement (section 4A).
The Act imposes specific obligations on employers to calculate the required contributions for employees based on their weekly salary rates. Employers must pro-rate the contributions for part-time employees by considering either their salary or hours worked against a full-time equivalent. Additionally, employers must ensure that employees are informed about their options under the Act, including the ability to elect not to have contributions made if they fall within the specified salary threshold or expected employment duration.
Failure to comply with the obligations set forth in the Act may result in civil or criminal consequences. The declaration does not explicitly state the penalties for non-compliance; however, breaches of the Superannuation (Productivity Benefit) Act 1988 could lead to significant legal and financial repercussions for the employer. These may include fines or other penalties as determined by relevant Australian authorities. The precise nature and extent of penalties would depend on the specific circumstances of the breach and any relevant case law or regulations.