Supplementary Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon John Dawkins, M.P.)Certain Periods not to Count as Periods of Employment
Summary of the proposed amendment
The amendment will ensure that any period for which 'excluded salary and wages' are paid is not taken into account in the calculation of the reduction in the employer's charge percentage (under clauses 22 and 23). [New clause 23C]
Explanation of the proposed amendment
Under the existing provisions of the Bill an employer does not have to provide superannuation support for certain employees. For example, where an employee receives salary and wages of less than $450 in a month, or where salary or wages are paid to certain non-resident employees or to an employee 65 years of age or older. This sort of excluded salary and wages is not taken into account for superannuation guarantee purposes in accordance with clauses 24 and 25 of the Bill.
Although excluded salary and wages are not taken into account in determining an employer's individual superannuation guarantee shortfall in respect of an employee, the period for which they are paid is taken into account in determining the reduction in the employer's charge percentage under clauses 22 and 23 of the Bill. This can result in the employer being taken to have provided a smaller amount of superannuation support than should be the case.
The proposed amendment will ensure that the period for which excluded salary and wages are paid is excluded from the calculation of the reduction in the employer's charge percentage under clauses 22 and 23 of the Bill.