A New Age for Superannuation in Australia
How will the proposed changes to superannuation affect your business? NATALIE GULLIFER from Landers & Rogers Lawyers reports.
HISTORIC legislation was introduced into Parliament on 2 November 2011 to increase the level of Superannuation Guarantee (SG) contributions from the current 9% to 12%.
The Bill passed the House of Representatives on 23 November 2011, and is now before the Senate.
In addition to increasing the level of SG contributions to 12%, the Superannuation Guarantee (Administration) Amendment Bill 2011 also proposes to remove the age limit on SG contributions (presently, SG is not required for an employee who is aged 70 or more).
Each of the above measures are intended to commence on 1 July 2013.
The following table indicates the schedule of increases in the level of SG contributions each year, starting with a 0.25% increase on 1 July 2013 and reaching the 12% level by 1 July 2019.
To avoid a ‘Superannuation Guarantee Shortfall’, employers must make superannuation contributions by the required time in respect of each quarter calculated at the correct charge percentage multiplied by each employee’s ordinary time earnings.
The Government has stated that the amendments are dependent on the passing of the Minerals Resource Rent Tax package.
BOTTOM LINE FOR EMPLOYERS
If passed, employers will need to make sure that their payroll systems are configured to remit the increased contributions to each employee’s superannuation fund, and any implications for employment agreements and remuneration packages will also need to be considered.
Employers who contribute to defined benefit superannuation funds may need to seek particular advice about the implications for them.
This potential change in legislation will affect the entire Australian workforce, not just the extractive industry.
Is your business prepared financially to meet the proposed 3% increase to SG contributions over the next 7 years?
CMPA will keep you informed if and when the bill passes the senate. Look out for more information on the changes to superannuation in future editions of Sand & Stone.
For further information contact Landers & Rogers Lawyers
Phone: 03 926 9583
Email: ngullifer@landers.com.au
Website: www.landers.com.au
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