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 eight years.
The increase will occur as follows.
| Years | Energy |
| Year commencing 1 July 2013 | 9.25 |
| Year commencing 1 July 2014 | 9.5 |
| Year commencing 1 July 2015 | 10 |
| Year commencing 1 July 2016 | 10.5 |
| Year commencing 1 July 2017 | 11 |
| Year commencing 1 July 2018 | 11.5 |
| Year commencing on or after 1 July 2019 | 12 |
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 obligations.
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 years.
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.
