Overview

The Superannuation (Productivity Benefit) Act 1988 was enacted to provide superannuation arrangements for certain Australian Government employees, office holders, and contractors, ensuring they received minimum employer superannuation contributions in line with the Superannuation Guarantee (Administration) Act 1992. The Act was initially designed to cover new employees until 30 June 2006, after which new employees were no longer eligible for these arrangements. However, the Act continued to apply to those who were already covered as of 30 June 2006. The Superannuation (Productivity Benefit) (Continuing Contributions) Amendment Declaration 2014 (No. 1) was introduced by the Minister for Finance to amend the mechanism for calculating continuing contributions under the Act, aligning it directly with the superannuation guarantee charge percentage as stipulated in the Superannuation Guarantee (Administration) Act 1992. This amendment aimed to streamline the calculation process and eliminate the need for future declarations to update the contribution amounts. The Office of Best Practice Regulation assessed that these changes would have negligible impacts, deeming further detailed analysis unnecessary. The Declaration is subject to disallowance under the Superannuation (Productivity Benefit) Act 1988 and the Legislative Instruments Act 2003, and it commenced on 1 July 2014.

Scope and Application

The Superannuation (Productivity Benefit) (Continuing Contributions) Amendment Declaration 2014 (No. 1) amends the mechanism for calculating continuing contributions under the Superannuation (Productivity Benefit) Act 1988, thereby directly linking the specified percentage in the calculation to the superannuation guarantee charge percentage as outlined in the Superannuation Guarantee (Administration) Act 1992. This change ensures that the Principal Declaration, which was established to introduce a mechanism for calculating amounts in the table of continuing contributions for future years, will have perennial application, eliminating the need for future declarations. The amendment applies to persons who were covered by the PB Act on 30 June 2006 and continue to be covered until they cease their relevant employment or become a member of an Australian Government superannuation scheme. The amendment is effective from 1 July 2014 and is subject to disallowance in accordance with section 9B of the PB Act. The Declaration does not require consultation as it is considered to be of a minor or machinery nature, with no substantial alteration to existing arrangements, and has been assessed by the Office of Best Practice Regulation to have nil or low impacts.

Key Provisions

The Superannuation (Productivity Benefit) (Continuing Contributions) Amendment Declaration 2014 (No. 1) (the Declaration) amends the mechanism for calculating amounts in the table of continuing contributions as specified in the Superannuation (Productivity Benefit) (Continuing Contributions) Declaration 2013 (the Principal Declaration). This amendment directly links the specified percentage with the superannuation guarantee charge percentage as set out in the Superannuation Guarantee (Administration) Act 1992 (SGAA). By doing so, the Declaration aims to streamline the calculation process and ensure that the Principal Declaration has perennial application, eliminating the need for future declarations to be made. This change will take effect from 1 July 2014, as specified in Section 2 of the Declaration. The Declaration imposes specific obligations on employers who are subject to the Superannuation (Productivity Benefit) Act 1988 (the PB Act). These obligations include calculating continuing contributions for certain Australian Government employees, office holders and contractors based on the updated mechanism outlined in the Declaration. Employers must ensure that their contributions adhere to the new method of calculation, which now directly correlates with the superannuation guarantee charge percentage specified in the SGAA. Furthermore, employers are required to maintain records of these contributions in accordance with the provisions of the PB Act and related regulations. Breach of the obligations imposed by the Declaration can result in civil or criminal consequences, depending on the nature and severity of the non-compliance. While the Declaration itself does not explicitly state penalties, non-compliance with the PB Act generally can attract fines and other penalties under the SGAA. For example, failure to make the required superannuation contributions can result in a civil penalty of up to 200% of the unpaid amount, as well as interest on the unpaid superannuation. Additionally, the SGAA provides for criminal penalties, including fines of up to $26,100 for individuals and $130,500 for corporations, for serious breaches such as wilful failure to comply with the Act. The Declaration, while a legislative instrument, is exempt from disallowance under section 44 of the Legislative Instruments Act 2003, with the exception of superannuation instruments. However, it is subject to disallowance in accordance with section 9B of the PB Act. This means that while the Declaration is not subject to the usual disallowance process, it can still be annulled by resolution of either House of the Parliament if it is found to be invalid or contrary to law.