Senate

Supplementary Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon John Dawkins, M.P.)

"Payments" to Certain Employees

Summary of the proposed amendment

The amendment will ensure that payments to local government councillors and similar office holders are not taken to be salary and wages unless they constitute remuneration for services or work done by the office holder.

Explanation of the proposed amendment

Subclause 12(9) of the Bill provides that a person who holds, or performs the duties of an appointment, office or position under the Constitution or under a law of the Commonwealth, of a State or a Territory (including members of the defence force or a police force) is an employee of the Commonwealth, State or Territory. Similarly, a member of a local government council is deemed to be an employee of that council (subclause 12(10)).

Paragraph 11(1)(e) of the Bill specifically deems "payments" to these employees to be "salary and wages" for superannuation guarantee purposes. The term payments is very wide and could encompass a payment which is not salary and wages.

The amendment will substitute the term remuneration for the term payment. This will ensure that only payments for services or work done by the employee are considered to be salary and wages.