Superannuation (Productivity Benefit) Alternative Arrangements (Short-Term and Highly Casual Employment) Declaration No. 1 1995 No. 75
EXPLANATORY STATEMENT
STATUTORY RULES 1995 No. 75
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) provides the mechanism by which the minimum level of employer superannuation contribution is made available to Commonwealth sector employees who have no other employer-sponsored superannuation coverage. The Act also provides superannuation arrangements for the Senior Executive Service and senior officers of the APS who elect to participate in the performance based pay superannuation arrangements.
Subsection 4A(1) of the Act allows the Minister to declare that a group of employees who come within the ambit of the Act (qualified employees) is a specified class of employees who are neither fund employees nor interim arrangement employees.
Subsection 4A(2) of the Act allows the Minister to specify that particular superannuation arrangements apply to declared classes of qualified employees.
Currently, the Superannuation (Productivity Benefit) Alternative Arrangements Declaration No. 3 allows shortterm and highly casual employees earning less than $113 per week, or whose expected period of employment was less than 3 months, to elect not to have their minimum employer-sponsored superannuation contributions paid directly into a fund on their behalf. (Contributions are required under the Act even where the earnings of the employee are below the Superannuation Guarantee (SG) contribution threshold of $450 per month because of "award" obligations that pre-date the SG.) Such employees could instead elect to receive the accumulated contributions direct from the employer as a cash lump sum on completing their relevant Commonwealth employment. The short term and highly casual arrangements were first implemented in 1990, also before the introduction of the SG from 1 July 1992.
This declaration, the Superannuation (Productivity Benefit) Alternative Arrangements (Short-Term and Highly Casual Employment) Declaration No. 1, revokes the Superannuation (Productivity Benefit) Alternative Arrangements Declaration No. 3. This declaration alters the current threshold ($113 per week), above which contributions must be paid directly to an approved fund in accordance with the SG, to align the threshold with the SG requirements ($450 per month). The declaration also removes the current ability of employees who are employed for a period of less than 3 months to access the notional unfunded arrangement. This is because the SG requires contributions to be made to a fund where the salary exceeds $450 in any month irrespective of the period of employment.
The declaration commences with the introduction of the SG on 1 July 1992. The retrospective effect of this declaration does not affect in a prejudicial manner the rights of any person other than the Commonwealth.
Overview
The Superannuation (Productivity Benefit) Act 1988 was enacted to ensure that Commonwealth sector employees, who do not have other employer-sponsored superannuation coverage, receive a minimum level of employer superannuation contributions. This legislation also provides specific superannuation arrangements for senior executive service employees and senior officers within the Australian Public Service who choose to participate in performance-based pay superannuation arrangements. The Superannuation (Productivity Benefit) Alternative Arrangements (Short-Term and Highly Casual Employment) Declaration No. 1, issued in 1995, modifies the existing short-term and highly casual employment arrangements by adjusting the earnings threshold for mandatory superannuation contributions, aligning it with the Superannuation Guarantee requirements. This declaration also eliminates the option for employees with less than three months of employment to receive their superannuation contributions as a cash lump sum, ensuring that contributions are made to an approved fund when earnings exceed the Superannuation Guarantee threshold of $450 per month.
Scope and Application
The Superannuation (Productivity Benefit) Act 1988 applies to Commonwealth sector employees who do not have other employer-sponsored superannuation coverage and provides mechanisms for minimum employer superannuation contributions. The Act also applies to Senior Executive Service and senior officers of the Australian Public Service who choose to participate in performance-based pay superannuation arrangements. The explanatory statement for Statutory Rules 1995 No. 75 indicates that the Minister for Finance has the authority to declare certain employees as a specified class under the Act and to specify particular superannuation arrangements for these employees. Currently, short-term and highly casual employees earning less than $113 per week or those whose employment is expected to be less than three months can elect to receive their superannuation contributions as a cash lump sum from their employer upon completing their employment. However, the Superannuation (Productivity Benefit) Alternative Arrangements (Short-Term and Highly Casual Employment) Declaration No. 1 revokes the previous arrangements and aligns the threshold with the Superannuation Guarantee (SG) requirements, which mandate contributions to be paid to an approved fund when the salary exceeds $450 per month irrespective of the employment period. This declaration commenced with the introduction of the SG on 1 July 1992 and ensures that the rights of individuals are not prejudicially affected.
Key Provisions
The Superannuation (Productivity Benefit) Alternative Arrangements (Short-Term and Highly Casual Employment) Declaration No. 1, under Section 4A of the Superannuation (Productivity Benefit) Act 1988, primarily revises the existing superannuation arrangements for short-term and highly casual employees within the Commonwealth sector. Section 4A(1) and 4A(2) of the Act empower the Minister to specify that certain classes of employees, who are neither fund employees nor interim arrangement employees, are subject to particular superannuation arrangements. This declaration specifically affects employees earning less than $113 per week or those whose employment period is less than three months, by altering the threshold for mandatory superannuation contributions to align with the Superannuation Guarantee (SG) requirements of $450 per month.
The obligations imposed by this declaration require employers to ensure that all Commonwealth employees, except those specifically declared as short-term or highly casual, have their superannuation contributions paid into an approved fund if their earnings exceed the SG threshold of $450 per month. For short-term and highly casual employees, the employer must now pay the contributions directly into an approved fund, regardless of the period of employment, if the employee's earnings exceed the $450 per month threshold. Employers must also ensure that the correct amount of contributions is made in line with the SG, and these contributions should be paid on a monthly basis.
Breaching the provisions of this declaration can result in significant legal consequences. Employers found to be non-compliant with the requirements to make SG contributions to an approved fund for eligible employees may face penalties. The penalties can include financial fines and potential legal actions that could lead to further civil or criminal liabilities, depending on the severity and intent behind the breach. The exact penalties for non-compliance are not specified in the explanatory statement but generally align with those stipulated under the Superannuation Guarantee (Administration) Act 1992, which can include substantial fines per breach and additional penalties for ongoing or repeated violations.