Superannuation (Salary) Regulations (Amendment) 1992 No. 290
EXPLANATORY STATEMENT
STATUTORY RULES 1992 No. 290
Issued by the authority of the Minister for Finance
Superannuation Act 1976
Superannuation (Salary) Regulations (Amendment)
The Superannuation Act 1976 (the Act) makes provision for and in relation to an occupational superannuation scheme for persons employed by the Commonwealth and for certain other persons.
Section 168 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
Section 5 of the Act provides that the regulations may make provision in relation to amounts to be treated as salary for the purposes of the Act. Regulations for the purposes of section 5 are contained in the superannuation (Salary) Regulations.
Part IV of the Superannuation (Salary) Regulations (regulations 12 to 17) contains provisions in relation to the salary for the purposes of the Act of members of the scheme who are on leave without pay.
Section 51 of the Act provides that, unless the Minister directs otherwise, a member granted leave of absence without pay for a period exceeding 12 weeks is not permitted to contribute during the period of the leave.
Subregulation 13(1) of the Superannuation (Salary) Regulations provides that, where a member is on leave without pay in relation to which the Minister has directed that section 51 of the Act does not apply and where prescribed circumstances do not apply in respect of the member, the annual rate of salary during the period of that leave is to be the annual rate of the member's notional salary. Regulation 12 defines notional salary to mean the salary that would have been applicable if the member had not been on leave without pay.
Subregulation 13(2) specifies a number of prescribed circumstances under which a salary rate higher than the notional salary is recognised for the purposes of the Act.
It is intended that similar arrangements apply in relation to members who are granted leave of absence without pay from the Australian and Overseas Telecommunications Corporation (AOTC) for the purpose of undertaking employment with Advanced Network Management Pty Ltd (the Company), a wholly-owned subsidiary of AOTC, and who are employed by the Company at an annual rate of salary higher than that applicable to their employment with AOTC.
The Regulations amend subregulation 13(2) of the Superannuation (Salary) Regulations to provide for such arrangements.
The Regulations come into operation from the date of gazettal.
Overview
The Superannuation (Salary) Regulations (Amendment) 1992 No. 290 were enacted by the Minister for Finance under the authority of the Superannuation Act 1976. The primary objective of these regulations is to address the issue of determining salary rates for members of the occupational superannuation scheme who are on leave without pay, particularly for those who are granted leave to undertake employment with Advanced Network Management Pty Ltd, a subsidiary of the Australian and Overseas Telecommunications Corporation (AOTC). The amendment aims to ensure that members who are on leave without pay and subsequently employed by the Company at a higher annual salary rate are appropriately recognised in the superannuation scheme. This is achieved by modifying subregulation 13(2) to include the specific circumstances where a salary rate higher than the notional salary is recognised for the purposes of the Act. The regulations apply from the date of their gazettal, ensuring timely and relevant adjustments to the existing superannuation arrangements.
Scope and Application
The Superannuation (Salary) Regulations (Amendment) 1992 No. 290 applies to members of an occupational superannuation scheme who are employed by the Commonwealth and certain other persons, with a specific focus on those granted leave without pay. This amendment targets the superannuation contributions of individuals who are on leave without pay and are employed by the Australian and Overseas Telecommunications Corporation (AOTC), including those who take up employment with Advanced Network Management Pty Ltd, a wholly-owned subsidiary of AOTC, at an annual salary rate higher than that applicable to their employment with AOTC. The regulations extend to the Commonwealth, thereby covering federal employees and entities falling under federal purview. The amendments are designed to align the treatment of such employees with those who are on leave without pay and subsequently employed by entities at a higher salary rate, ensuring that superannuation contributions reflect the correct salary rate during the leave period. The changes are made under the authority of the Minister for Finance, as outlined in the Superannuation Act 1976, and come into effect from the date of gazettal.
Key Provisions
The Superannuation (Salary) Regulations (Amendment) 1992 No. 290 makes amendments to the Superannuation (Salary) Regulations under the Superannuation Act 1976. Specifically, it addresses the treatment of salary for superannuation purposes for members on leave without pay, particularly those who are granted leave to undertake employment with a subsidiary of the Australian and Overseas Telecommunications Corporation (AOTC). Regulation 13(1) of the Superannuation (Salary) Regulations stipulates that for members on leave without pay, where the Minister has not restricted their contributions and certain prescribed conditions are not met, the annual rate of salary is to be their notional salary, which is defined as the salary they would have received if they were not on leave. Regulation 12 further defines notional salary for the purposes of these regulations.
The amendment introduced by these regulations is significant for members of the scheme who are granted leave without pay and subsequently employed by a subsidiary, such as Advanced Network Management Pty Ltd. The amendment ensures that the salary recognised for superannuation purposes reflects the actual salary the member earns from the subsidiary if it is higher than their notional salary. This change is intended to ensure that the superannuation contributions are calculated accurately and fairly, reflecting the member’s actual earnings while on leave. The regulations require that the annual rate of salary be adjusted to the member’s actual salary if they are employed by the subsidiary at a higher rate than their notional salary.
The obligations imposed by these regulations on the relevant parties, including the Australian and Overseas Telecommunications Corporation and its subsidiaries, are to ensure that the correct salary is reported for superannuation purposes for members on leave without pay. Employers must identify whether a member is on leave without pay and determine their actual salary if employed by a subsidiary during that leave period. If the member’s salary with the subsidiary is higher than their notional salary, the employer must use the actual salary for superannuation calculations. This requirement ensures compliance with the Superannuation Act and the Superannuation (Salary) Regulations.
Failure to comply with the provisions of the Superannuation (Salary) Regulations can lead to various consequences. While the explanatory statement does not detail specific penalties, breaches of superannuation laws generally can result in substantial financial penalties for employers. In civil proceedings, the Australian Taxation Office (ATO) can pursue recovery of unpaid superannuation amounts, along with interest and penalties. Criminal penalties may also apply for serious breaches, including fines and imprisonment. The exact penalties would depend on the specific breach and the circumstances of the case, but they can be significant, underscoring the importance of compliance with these regulations.