Superannuation (Salary) Regulations (Amendment) 1991 No. 312
EXPLANATORY STATEMENT
STATUTORY RULES 1991 No. 312
ISSUED BY 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 prescribed circumstances do not apply in respect of a member and that member is on leave without pay in relation to which the Minister has directed that section 51 of the Act does not apply, the member's 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 Telecommunications Corporation (the Corporation) for the purpose of undertaking employment with Telecom Australia (International) Limited (the Company), a wholly-owned subsidiary of the Corporation, and who are employed by the Company at an annual rate of salary higher than that applicable to their employment with the Corporation.
The Regulations amend subregulation 13(2) of the Superannuation (Salary) Regulations to provide for such arrangements.
The amending Regulations will come into operation from the date of gazettal.
Overview
The Superannuation (Salary) Regulations (Amendment) 1991 was enacted to address the issue of determining the salary of members in the occupational superannuation scheme who are on leave without pay. This legislative amendment was introduced by the Parliament of Australia under the authority granted by the Superannuation Act 1976, with the specific purpose of aligning the treatment of superannuation contributions for employees on leave without pay who are transferred to employment with a subsidiary company. The policy objective behind this regulation is to ensure consistency in the application of superannuation rules across different employment scenarios, particularly when an employee is granted leave without pay and subsequently employed by a related entity at a higher salary.
Scope and Application
The Superannuation (Salary) Regulations (Amendment) 1991 No. 312 applies to the Superannuation Act 1976, specifically targeting the superannuation scheme for persons employed by the Commonwealth, as well as certain other individuals. The amendment to the regulations extends to the salary treatment for members of the scheme who are on leave without pay, particularly those granted leave of absence exceeding 12 weeks. The regulations also apply to members of the Australian Telecommunications Corporation on leave without pay who are subsequently employed by Telecom Australia (International) Limited, a wholly-owned subsidiary of the Corporation, at a higher annual salary rate. The amendments to subregulation 13(2) aim to ensure that the superannuation contributions and salary calculations are appropriately aligned with these employment transitions and conditions. These regulations have a national reach, as they are issued under the authority of the Commonwealth and are applicable across Australia. The regulations do not specify any exclusions or exemptions, nor do they set thresholds for application, other than the conditions detailed in the amendment. The scope and application of these regulations are further defined through subordinate instruments as necessary, ensuring that they meet the legislative intent and provide for the effective administration of the superannuation scheme.
Key Provisions
The Superannuation (Salary) Regulations (Amendment) 1991 No. 312 introduces amendments to the Superannuation (Salary) Regulations under the Superannuation Act 1976. Section 5 of the Act allows for the making of regulations that specify the amounts to be treated as salary for the purposes of the Act, and these regulations are contained in the Superannuation (Salary) Regulations. The primary focus of these amendments is on the salary treatment of members on leave without pay, particularly those who are granted leave without pay for over 12 weeks, as outlined in section 51 of the Act.
The amendments, specifically to subregulation 13(2) of the Superannuation (Salary) Regulations, seek to establish similar arrangements for members who are on leave without pay from the Australian Telecommunications Corporation (the Corporation) and subsequently employed by Telecom Australia (International) Limited (the Company), a wholly-owned subsidiary of the Corporation, at a higher annual salary rate than that applicable to their employment with the Corporation. Under these new arrangements, the annual rate of salary for members on leave without pay is to be their notional salary, which is defined as the salary that would have applied if they were not on leave, unless certain prescribed circumstances apply. Subregulation 13(2) lists these prescribed circumstances under which a salary rate higher than the notional salary is recognised for the purposes of the Act.
These amendments impose obligations on the Australian Telecommunications Corporation and Telecom Australia (International) Limited to ensure that the salary calculations for superannuation contributions are consistent with the notional salary of the employees on leave without pay, unless specific circumstances dictate otherwise. The regulations require the Corporation and the Company to accurately determine and report the salary figures in compliance with the Act and its regulations.
Failure to comply with the provisions of the Superannuation (Salary) Regulations, including the amended subregulation 13(2), may result in penalties. The exact nature of these penalties is not detailed in the explanatory statement, but under the Superannuation Act 1976, breaches can lead to civil or criminal consequences. Penalties may include fines or other financial sanctions as prescribed by the relevant laws. The maximum penalties are not specified in the explanatory statement but are likely to be outlined in other parts of the Superannuation Act or in associated legislative instruments.