EXPLANATORY STATEMENT
STATUTORY RULES 1990 NO. 172
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
DECLARATION UNDER SECTION 3D
VARIATION OF TABLE
The Superannuation (Productivity Benefit) Act 1988 provides the mechanism by which a 3 per cent superannuation benefit is made available to Australian Government employees without other superannuation coverage.
The designated employers of such employees are required to pay to either the superannuation fund nominated by the Minister for Finance or another fund approved by the Minister periodic contributions based on the salary of the employee. The amount to be contributed is calculated using a Table set out in a Schedule to the Act. The Table is structured so that a proportionally greater benefit is provided to lower paid wage earners. The amount to be contributed is adjusted where the employee is not employed full-time.
Employers are required as well to pay to the same fund, on a once-only basis, an amount being the entitlement accrued by the employee under the former Superannuation Benefit (Interim Arrangement) Act 1988 and an amount in respect of contributions which would have been paid after 1 July 1990 had the employee joined a fund on that date.
The employer is required to pay extra amounts as interest on the once-only payment and on any contributions which were not made. The employer is also required to pay penalty interest in respect of any period of delay between the date when an amount should have been paid to a fund and the date when it was paid.
The Act also provides a mechanism for the continued payment of a benefit directly by the employer where the employee does not become a member of a fund before becoming entitled to a benefit.
Section 3D of the Superannuation (Productivity Benefit) Act 1988 permits the Minister for Finance to vary the amounts set out in the Table. The variations set out in the Table allow for increases in Australian Public Service remuneration since the Table set out in the Act was first devised and maintain the bias in favour of lower paid employees.
Following the changes set out in the declaration, employers will be required to make a contribution of:
• a flat amount of $13.20 per week (formerly $12.70) in respect of an employee whose full-time rate of salary is or would be less than $440 per week (formerly $423);
• 3% of the weekly rate of salary in respect of an employee whose weekly rate of salary is $440 (formerly $423) or more, but less than $709 (formerly $650);
• a flat amount of $21.27 per week (formerly $19.50) in respect of an employee whose weekly rate of salary is $709 (formerly $650) or more, but less than $1063.50 (formerly $975); and
• 2% of the weekly rate of salary in respect of an employee whose weekly rate of salary is greater than $1063.50.
Overview
The Superannuation (Productivity Benefit) Act 1988 was enacted to provide a superannuation benefit mechanism for Australian Government employees who are not covered by other superannuation schemes. This Act was introduced to ensure that eligible employees receive a consistent and equitable superannuation benefit, despite not being part of another superannuation fund. The Act requires designated employers to make periodic contributions to a superannuation fund based on the employee's salary, with the contribution amount calculated using a Table that favours lower-paid wage earners. The Minister for Finance has the authority to vary the amounts set out in this Table to account for changes in remuneration and maintain the benefit's focus on lower-paid employees. The policy objective of the Act is to provide a fair and structured superannuation benefit to eligible Australian Government employees, ensuring they receive a proportionate benefit based on their salary levels.
Scope and Application
The Superannuation (Productivity Benefit) Act 1988 applies to Australian Government employees who do not have other superannuation coverage, with their designated employers required to make periodic contributions to a superannuation fund on behalf of these employees. The Act mandates that these contributions be calculated using a Table set out in a Schedule to the Act, which provides a greater benefit to lower-paid wage earners. Employers are also required to make a once-only payment for the employee's entitlement accrued under the former Superannuation Benefit (Interim Arrangement) Act 1988, along with any contributions that would have been made had the employee joined a fund on 1 July 1990. Additionally, employers must pay interest on these payments and any penalties for late payments. The Minister for Finance has the authority under Section 3D of the Act to vary the amounts in the Table, which was done in this instance to adjust for increases in Australian Public Service remuneration while maintaining the bias towards lower-paid employees. This Act is applicable across the Commonwealth, governing the actions of employers and employees within the federal government sector.
Key Provisions
The Superannuation (Productivity Benefit) Act 1988, as amended by the recent statutory rules, lays out the framework for providing a 3% superannuation benefit to Australian Government employees who do not have other superannuation coverage. Section 3D of this Act allows the Minister for Finance to adjust the contributions table, ensuring the benefits remain aligned with current remuneration rates in the Australian Public Service while maintaining a bias towards lower-paid employees. This adjustment is evident in the revised contribution rates, which now include a flat contribution of $13.20 per week for employees earning less than $440 per week, 3% of the weekly salary for those earning between $440 and $709, $21.27 for those earning between $709 and $1063.50, and 2% of the weekly salary for those earning over $1063.50.
Under the Act, designated employers are mandated to make periodic contributions to a superannuation fund approved by the Minister for Finance, based on the employee's salary. This obligation extends to making a once-only payment for the employee's accrued entitlements under the former Superannuation Benefit (Interim Arrangement) Act 1988, as well as for any contributions that would have been made had the employee joined a fund on 1 July 1990. Employers must also account for interest on these payments and any penalty interest for delays in contribution payments. Furthermore, the Act allows for the direct payment of benefits by the employer if the employee does not join a fund before becoming eligible for a benefit.
The Act imposes several obligations on employers, including the accurate calculation and timely payment of contributions, interest, and penalty interest. Employers must also ensure that any once-only payments and any contributions that would have been made are remitted to the specified fund. Non-compliance with these obligations can result in financial liabilities for the employer, including the payment of interest and penalties.
Breaches of the Act's provisions can lead to civil consequences, with the employer being liable to pay the interest and penalties for late or missed contributions. While the Act does not explicitly state maximum penalties, it implies that failure to comply with the specified obligations could result in significant financial repercussions for the employer. There is no mention of criminal penalties in the explanatory statement, suggesting that the primary consequences of non-compliance are of a civil nature, aimed at ensuring that superannuation benefits are properly and timely provided to eligible employees.