Superannuation (Productivity Benefit) (Qualified Employees) Declaration No. 3 1993 No. 203
EXPLANATORY STATEMENT
Statutory Rules 1993 No. 203
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
DECLARATION UNDER SUBSECTION 3F(1)
The Superannuation (Productivity Benefit) Act 1988 provides the mechanism for the payment of superannuation guarantee minimum benefits to Commonwealth sector employees who have no other employer sponsored superannuation coverage.
The designated employers of qualified employees are required to pay to either the superannuation fund nominated by the Minister for Finance (AGEST) or a fund approved by the Minister periodic contributions based on the salary of the employee.
Subsection 3F(1) of the Act enables the Minister for Finance to declare a specified class of persons to be qualified employees. This declaration specifies two new classes of persons to be qualified employees so that their employers can provide them with the superannuation guarantee minimum benefits provided for under the Act.
The first new class of qualified employee are Australian residents for taxation purposes, who are employed overseas, and who would have been qualified employees except for the exclusion contained in paragraph (m) of the definition of qualified employee in subsection 3(1) of the Act. That paragraph states that persons engaged or appointed for employment outside Australia only are not qualified employees.
The second new class of qualified employees are contractors who are not common law employees but who are employees for superannuation guarantee purposes under the Superannuation Guarantee (Administration) Act 1992. Those contractors who are employees at common law are already qualified employees.
The declaration takes effect from 1 July 1992.
Overview
The Superannuation (Productivity Benefit) (Qualified Employees) Declaration No. 3 1993, issued under the authority of the Minister for Finance, is an instrumental piece of legislation designed to amend the Superannuation (Productivity Benefit) Act 1988. This Act was introduced to address the gap in superannuation coverage for specific classes of employees who were previously excluded from receiving the minimum benefits guaranteed under the Act. The Parliament enacted this declaration to extend these benefits to Australian residents employed overseas and contractors who, although not common law employees, are nonetheless considered employees for superannuation guarantee purposes. This legislative measure ensures that these previously excluded groups receive the superannuation guarantee minimum benefits, thereby aligning their entitlements with those of other eligible Commonwealth sector employees. The declaration was made effective from 1 July 1992, underscoring the intent to promptly address the identified coverage gap and enhance the overall superannuation security for the specified employee classes.
Scope and Application
The Superannuation (Productivity Benefit) (Qualified Employees) Declaration No. 3 1993 No. 203 amends the Superannuation (Productivity Benefit) Act 1988 to extend the definition of qualified employees, thereby broadening the scope of those who are eligible for the superannuation guarantee minimum benefits. The declaration applies to two specific classes of individuals who were previously excluded from the benefits under the Act. The first class includes Australian residents employed overseas who would otherwise be excluded due to the specific provision in the Act that excludes those engaged outside Australia. The second class comprises contractors who are recognised as employees for superannuation guarantee purposes under the Superannuation Guarantee (Administration) Act 1992, excluding those who are also employees at common law. This legislative change ensures that these previously excluded groups receive the minimum superannuation benefits, effective from 1 July 1992. The declaration is a subordinate instrument issued under the authority of the Minister for Finance, thereby extending the application of the primary Act.
Key Provisions
The Superannuation (Productivity Benefit) (Qualified Employees) Declaration No. 3 1993 No. 203 under the Superannuation (Productivity Benefit) Act 1988, declares two new classes of employees as qualified employees who are eligible to receive the superannuation guarantee minimum benefits. Section 3F(1) of the Act empowers the Minister for Finance to make such declarations. The first class includes Australian residents employed overseas, who would otherwise be excluded under subsection 3(1)(m) of the Act. The second class includes contractors who, while not common law employees, are deemed employees under the Superannuation Guarantee (Administration) Act 1992. These declarations ensure that these categories of employees receive the minimum superannuation benefits as prescribed by the Act.
The declaration imposes obligations on employers of qualified employees, particularly those in the newly specified classes. Employers are required to make periodic contributions to a superannuation fund, either the one nominated by the Minister for Finance or a fund approved by the Minister. These contributions must be based on the employee's salary. The employers of Australian residents working overseas and contractors who are employees under the Superannuation Guarantee (Administration) Act 1992 must ensure compliance with these requirements to provide their employees with the mandated superannuation benefits.
Breaches of the obligations set out in the Superannuation (Productivity Benefit) Act 1988 can result in both civil and criminal consequences. Employers who fail to make the required contributions can be subject to financial penalties. The Act does not specify maximum penalties within the explanatory statement, but generally, such breaches may lead to fines and other legal repercussions. It is also important to note that non-compliance can lead to legal action, which may further escalate the consequences for the employer.