EXPLANATORY STATEMENT
STATUTORY RULES 1988 NO 250
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
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 an eligible employee (contributor) is expressed as a percentage of the fortnightly rate of his or her salary. In accordance with subsection 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 subsection 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.
Subsection 5(1) of the Act provides that “salary” means salary or wages and:
(a) includes any allowance, or the value of any allowance, or any fee, that is an allowance or fee of a kind that, under the regulations, is to be treated as salary for the purposes of the Act; but
(b) does not include any part of any salary or wages that, under the regulations, is not to be treated as salary for the purposes of the Act.
Sub-section 5(2) 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) 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.
Part II of the Regulations (regulations 4 to 8) sets out the allowances that are to be treated as salary for the purposes of the Act and the conditions under which certain of those allowances are to be treated as salary. Regulation 5 lists allowances that are to be treated as salary and includes in paragraph 5(1) an allowance of a prescribed kind that is payable on a regular basis to a contributor. The question of whether an allowance is payable on a regular basis and other matters relating to allowances of a prescribed kind are dealt with in regulations 6, 7 and 8.
Allowances that are allowances of a prescribed kind for the purposes of Part II are listed in regulation 4. They include in paragraph 4(a) an allowance that is payable to an eligible employee by reason that he or she temporarily performs the whole or a part of the duties of an office of a higher classification than the classification of the office occupied.
There are circumstances, however, where a person temporarily performing the duties of a higher positions does not receive an allowance in respect of the temporary performance of these duties but receives salary at the rate normally applicable to the occupant of the higher position. It is intended that, for the purposes of the Act, that part of the higher salary that relates solely to the performance of the duties of the higher position be treated in the same way as an allowance of a kind described in paragraph 4(a) of the Regulations.
The Superannuation (Salary) Regulations (Amendment) give effect to that intention. A new subregulation 4(2) is inserted to provide that the part of the higher salary that is payable solely because of the person acting in a higher position and not on any other ground or additional ground will be treated as an allowance of a prescribed kind described in paragraph 4(a) of the Regulations. Any allowance payable to the person in connection with the performance of the duties of the higher position but which is not related solely to the performance of those duties is to be treated on the basis prescribed in the Regulations in relation to the particular allowance.
The amending Regulations operate from the date of their gazettal.