On 19 March 2012, the Superannuation Guarantee
(Administration) Amendment Bill 2012 (Bill) was passed,
introducing a number of important changes to the superannuation
guarantee obligations of Australian employers.
Legislative changes to the superannuation guarantee
The Bill, which amends the Superannuation Guarantee
(Administration) Act 1992, introduces a progressive increase
in the superannuation guarantee rate from 9% to 12% over the next
The increase will occur as follows.
Year commencing 1 July 2013
Year commencing 1 July 2014
Year commencing 1 July 2015
Year commencing 1 July 2016
Year commencing 1 July 2017
Year commencing 1 July 2018
Year commencing on or after 1 July 2019
The Bill also abolishes the superannuation guarantee age limit,
which is currently 70 years. Accordingly, from 1 July 2013, it will
be compulsory for employers to make the superannuation guarantee
contribution to employees aged 70 years and over.
The Bill also introduces a new low income superannuation
contribution of up to A$500 per year, which will effectively refund
the 15% contributions tax paid for those employees earning up to
A$37,000. This change is scheduled to commence on 1 July 2012.
What this means for employers
Employers will need to review their employment arrangements to
ensure compliance with the new superannuation guarantee
Employers will need to review their employment contracts to
ensure that the terms and conditions accurately reflect the amended
laws. In particular, employment contracts that stipulate specific
superannuation rates will need to be updated.
Employers should also take these legislative changes into
account when undertaking salary reviews over the next few
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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