EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 204
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUBJECT: SUPERANNUATION ACT 1976 - SUPERANNUATION (SALARY) REGULATIONS (AMENDMENT)
Section 168 of the Superannuation Act 1976 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters which the Act requires or permits to be prescribed, or which are necessary or convenient to be prescribed, for carrying out or giving effect to the Act.
The Act makes provision for and in relation to an occupational superannuation scheme for persons employed by the Commonwealth, and for certain other persons.
Under the Act, the rate of fortnightly contributions payable by a contributor is expressed as a percentage of the fortnightly rate of his or her salary. In accordance with sub-section 3(1) of the Act, “fortnightly rate of salary” in relation to a contributor means an amount equal to one-twenty-sixth of the amount of his or her annual rate of salary.
The rates of employer-financed invalidity, age and early retirement pensions payable under the Act are expressed as percentages of the former contributor’s final annual rate of salary. In accordance with sub-section 3(1) of the Act, “final annual rate of salary” means, in the generality of cases, the person’s annual rate of salary on his or her last day of service.
Sub-section 5(2) of the Act provides that, subject to sub-section 5(3), the “annual rate of salary” of a contributor on a particular day is an amount equal to the amount per annum of the salary for the purposes of the Act payable to the contributor on that day. Sub-section 5(3) of the Act provides that the regulations may provide that, in a case specified in the regulations, the annual rate of salary of a contributor on a particular day shall, for the purposes of the Act or a provision of the Act specified in the regulations, be an amount equal to such amount per annum as is ascertained under the regulations.
Regulations for the purposes of section 5 are contained in the Superannuation (Salary) Regulations.
Section 47 of the Act provides that, where there is a reduction in a contributor’s salary, the contributor’s annual rate of salary for the purposes of the Act after the reduction is to be:
(a) if no election is made under sub-section 47(2) - fixed at the annual amount applicable immediately before the reduction; or
(b) if an election is made under sub-section 47(2) - the annual amount of the lower rate of salary as updated from time to time.
It is intended, however, that, in the case of an officer of the Australian Public Service (other than a fixed-term appointee):
(a) who is a Secretary of a Department and who is redeployed to a lower classification of Secretary or to a Senior Executive Service classification; or
(b) who is a Senior Executive Service officer and who is redeployed to a lower Senior Executive Service classification or to a lower classification that is not a Senior Executive Service classification,
and who does not make an election under sub-section 47(2), the annual rate of salary of the person for the purposes of the Act after the redeployment, or subsequent such redeployments, be the annual rate of salary as updated from time to time applicable to the classification held by the person immediately before the first such redeployment.
The regulations amend the Superannuation (Salary) Regulations to provide accordingly.
The regulations are expressed to come into effect on the date of their notification in the Gazette.
Overview
The Superannuation (Salary) Regulations (Amendment) 1996 were enacted to address a specific gap in the Superannuation Act 1976 concerning the calculation of annual rates of salary for Australian Public Service officers who experience a redeployment to a lower classification. This amendment was introduced to ensure that the annual rate of salary for these officers, particularly Secretaries of Departments and Senior Executive Service officers, is updated appropriately following redeployment, thereby providing clarity and fairness in the application of superannuation contributions and benefits. The amendment was made under the authority of the Minister for Finance and was issued to implement the intent of the Act by clarifying the calculation of annual salary rates post-redeployment, aligning with the overarching policy objective of the Superannuation Act 1976 to provide equitable superannuation benefits.
Scope and Application
The Superannuation (Salary) Regulations (Amendment) 1985 pertains to the Superannuation Act 1976 and its regulations governing occupational superannuation for Commonwealth employees and certain other persons. The primary focus is on determining the annual rate of salary for superannuation contributions and pension entitlements. The Act applies to persons employed by the Commonwealth, including officers of the Australian Public Service, particularly those within the Senior Executive Service. The amendment specifies that for certain redeployments within the Australian Public Service, the annual rate of salary for superannuation purposes will be updated from time to time applicable to the classification held immediately before the redeployment, rather than being fixed at the rate applicable before the reduction. This amendment ensures a more equitable treatment of superannuation benefits for officers undergoing redeployments within the public service. The regulations are applicable nationally, as they concern Commonwealth employees and the superannuation scheme established under federal law. The amendment does not introduce new exclusions or exemptions but rather clarifies the application of existing provisions to a specific scenario. The regulations are made under the authority granted by section 168 of the Superannuation Act 1976, and they come into effect on the date of their notification in the Gazette.
Key Provisions
The Superannuation (Salary) Regulations (Amendment), issued under the authority of the Minister for Finance, amend the existing Superannuation (Salary) Regulations to address the calculation of annual rates of salary for certain officers of the Australian Public Service (APS) who experience a redeployment to a lower classification. Specifically, sections 47(1)(a) and 47(1)(b) of the Superannuation Act 1976 (the Act) are supplemented to ensure that the annual rate of salary for the purposes of the Act after redeployment is aligned with the updated annual rate applicable to the classification held immediately before the first such redeployment, if the officer does not elect under sub-section 47(2). This amendment is particularly relevant for Secretaries of Departments and Senior Executive Service officers who are redeployed to a lower classification.
These regulations impose specific obligations on affected officers and the Commonwealth in relation to the calculation of annual rates of salary. For instance, if an officer is redeployed to a lower classification and does not elect under sub-section 47(2) of the Act, their annual rate of salary for the purposes of the Act must be updated from time to time in accordance with the regulations. This ensures that the officer’s superannuation benefits are calculated based on the updated annual rate applicable to the classification held before the redeployment. Additionally, the regulations specify the manner in which the annual rate of salary is to be updated, providing clarity and consistency in the application of the Act.
Failure to comply with the requirements set out in these regulations may result in incorrect calculation of superannuation contributions and benefits, leading to potential financial discrepancies and disputes. Although the regulations do not explicitly state civil or criminal penalties for non-compliance, breaches of the Superannuation Act 1976 or associated regulations may lead to enforcement actions by the Australian Taxation Office (ATO) or other relevant authorities. Such actions could include financial penalties, corrections to superannuation accounts, or other administrative measures to rectify the breach. The Act and associated regulations are designed to ensure that superannuation contributions and benefits are accurately calculated and administered, protecting the interests of contributors and beneficiaries.