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Superannuation (Salary) Regulations (Amendment)

Authoritative Version
  • - F1996B02195
  • No longer in force
SR 1985 No. 326 Regulations as made
These Regulations amend the Superannuation (Salary) Regulations.
Administered by: Finance
General Comments: This instrument was backcaptured in accordance with Section 36 of the Legislative Instruments Act 2003
Exempt from sunsetting by the Legislative Instruments Regulations 2004 Sch 3 item 40
Registered 01 Jan 2005
Tabling HistoryDate
Tabled Senate05-Dec-1985
Tabled HR11-Feb-1986
Gazetted 05 Dec 1985
Date of repeal 19 Mar 2014
Repealed by Finance (Spent and Redundant Instruments) Repeal Regulation 2014

EXPLANATORY STATEMENT

STATUTORY RULES 1985 NO. 326

ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE

SUBJECT: SUPERANNUATION ACT 1976 - SUPERANNUATION (SALARY) REGULATIONS (AMENDMENT)

Section 168 of the Superannuation Act 1976 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters that the Act requires or permits to be prescribed, or that are necessary or convenient to be prescribed, for carrying out or giving effect to the Act.

The Act makes provision for and in relation to an occupational superannuation scheme for persons employed by the Commonwealth, and for certain other persons.

Under the Act, the rate of fortnightly contributions payable by a contributor is expressed as a percentage of the fortnightly rate of his or her salary. In accordance with sub-section 3(1) of the Act, “fortnightly rate of salary” in relation to a contributor means an amount equal to one-twenty-sixth of the amount of his or her annual rate of salary.

The rates of employer-financed invalidity, age and early retirement pensions payable under the Act are expressed as percentages of the former contributor’s final annual rate of salary. In accordance with sub-section 3(1) of the Act, “final annual rate of salary” means, in the generality of cases, the person’s annual rate of salary on his or her last day of service.

Sub-section 5(1) of the Act provides that “salary” means salary or wages and:

(a)        includes any allowance, or the value of any allowance, or any fee, that is an allowance or fee of a kind that, under the regulations, is to be treated as salary for the purposes of the Act; but

(b)        does not include any part of any salary or wages that, under the regulations, is not to be treated as salary for the purposes of the Act.

Sub-section 5(2) provides that, subject to sub-section 5(3), the “annual rate of salary” of a contributor on a particular day is an amount equal to the amount per annum of the salary for the purposes of the Act payable to the contributor on that day. Sub-section 5(3) provides that the regulations may provide that, in a case specified in


 

the regulations, the annual rate of salary of a contributor on a particular day shall, for the purposes of the Act or a provision of the Act specified in the regulations, be an amount equal to such amount per annum as is ascertained under the regulations.

Regulations for the purposes of section 5 are contained in the Superannuation (Salary) Regulations (the Regulations).

Part II of the Regulations (regulations 4 to 8) sets out the allowances that are to be treated as salary for the purposes of the Act and the conditions under which certain of those allowances are to be so treated. Paragraphs 4(b) and 5(1) and regulation 6 provide for shift allowance (an additional or penalty payment in respect of a particular shift or shifts worked) to be treated as salary for the purposes of the Act where:

(a)        it was payable continuously in respect of duties or work performed by the contributor during the preceding 12 month period; or

(b)        a person authorised by the Commissioner for Superannuation has certified that is is likely to be payable continuously in respect of duties or work performed by the contributor for a period of 12 months.

Regarding (b) above, regulation 8 provides that shift allowance will be treated as salary for benefit purposes on age or early age retirement only where it has been payable continuously during the 12 month period prior to retirement (that is, where a person ceases to be a contributor during the period to which a certificate referred to in (b) above relates, shift allowance is to be treated as salary for benefit purposes only where the cause of the cessation is invalidity retirement or death in service). Regulation 7 provides that shift allowance is to be included as salary for the purposes of the Act only to the extent of the lowest rate payable during the 12 month period.

Part III of the Regulations (regulations 9 to 11) makes specific provision in relation to salary for the purposes of the Act for temporary employees along the same lines as in Part II.

Staff organisations were critical of the requirement in the Regulations that shift allowance be payable continously during the 12 month period, particularly in relation to contributors working a cycle of different shifts; in such cases the existence of one shift in the cycle that does not attract shift allowance is sufficient under the Regulations to exclude shift allowance for the other shifts from being treated as salary for the purposes of the Act.


Ultimately, one such contributor, Mr A. Carpenter, appealed to the Administrative Appeals Tribunal under section 154 of the Act, against a decision by the Commissioner for Superannuation that Mr Carpenter’s shift allowance not be treated as salary for the purposes of the Act. The Administrative Appeals Tribunal found that, in Mr Carpenter’s case, shift allowance should be treated as salary for the purposes of the Act in that, for the purposes of sub-section 5(1) of the Act, it formed part of “salary or wages” in the ordinary sense of the term and that there was no need to have recourse to the Regulations in determining whether shift allowance should be treated as salary.

The Commissioner for Superannuation appealed against the Tribunal’s findings to the Federal Court which supported those findings.

As a result of the Federal Court judgment, it is necessary to amend the Regulations to provide a method of treatment of shift allowance as salary for superannuation purposes for contributors generally. It is intended that shift allowance be excluded from being treated as salary for the purposes of the Act unless it has been received in respect of work performed during at least 75% of salary or wages pay periods during the period of 12 months immediately preceding the particular day. Where a contributor retires on invalidity grounds or dies and does not meet that requirement, shift allowance is to be treated as salary for benefit purposes where:

(a)        it has been payable to the person in respect of work performed during at least 75% of salary or wages pay periods since last becoming a shift worker during the 12 month period ending on the date of invalidity retirement or death; and

(b)        a certificate is given that, if the person had not retired or died, shift allowance would have been payable in respect of work performed during at least 75% of salary or wages pay periods in the 12 month period commencing on the day the person last became a shift worker.

It is also intended that, where a contributor qualifies to have shift allowance treated as part of salary for the purposes of the Act, the shift allowance component to be included in the contributor’s annual rate of salary on a particular day is to be the amount of shift allowance received during the period of 12 months immediately preceding the particular day or, in the invalidity or death cases referred to above, the amount of shift allowance received during the period of less than 12 months converted to an annual amount.


The amending regulations contained in the Statutory Rule amend the Regulations to insert a new Part IIA to give effect to these intentions.

As noted above, Part III of the Regulations makes specific provisions in relation to salary for the purposes of the Act in relation to temporary employees. The effect of the provisions of Part III is that, for temporary employees, allowances of a kind referred to in Part II or an increase in salary or wages (excluding allowances) arising from a change in the work performed are to be treated as salary for the purposes of the Act on a particular day only where:

(a)        they have been payable continuously in respect of duties or work performed during the preceding 12 month period; or

(b)        a person authorised by the Commissioner for Superannuation has certified that they are likely to be payable continuously in respect of duties or work performed for a period of 12 months.

That is, on a similar basis as is provided in Part II for allowances referred to in regulation 4.

It is necessary for Part III to be amended to have regard to the change in the test for the treatment of shift allowance as salary for the purposes of the Act. The regulations contained in the Statutory Rule therefore also amend Part III so that:

(a)        allowances payable to temporary employees will be treated as salary for the purposes of the Act under the provisions of Part II and the proposed new Part IIA; and

(b)        increase in the salaries or wages (excluding allowances) of temporary employees will be treated as salary for the purposes of the Act on the same basis as presently provided.

The amendments to the Regulations are summarised in the attachment.

The amending regulations come into operation from the date of their gazettal.

 


SUMMARY OF AMENDMENTS TO THE SUPERANNUATION (SALARY) REGULATIONS

Regulation 1

Establishes that the term “Principal Regulations” used in the amending Regulations means the Superannuation (Salary) Regulations.

Regulation 2

Omits the reference to Part III in regulation 3 of the Principal Regulations to enable Part III as amended to operate as intended.

Regulation 3

Omits paragraph 4(b) of the Principal Regulations thus removing shift allowance from the ambit of Part II of those Regulations.

Regulation 4

Introduces a new Part IIA (new regulations 8A to 8E) to provide for the exclusion of shift allowance from salary for the purposes of the Act except where certain conditions are met and to provide a method of determining a contributor’s annual rate of salary for the purposes of the Act where that salary includes shift allowance.

New Part IIA

New Regulation 8A

Sub-Regulation 8A(1)

Defines the terms “pay period”, “prescribed eligible employee” and “shift allowance”.

Sub-Regulation 8A(2)

Provides for certain periods to be counted or not counted as pay periods for the purposes of Part IIA depending upon the circumstances.

Sub-Regulation 8A(3)

Provides for the treatment of periods of leave during which shift allowance is not payable in determining the length and continuity of particular periods of time for the purposes of Part IIA.


 

New Regulation 8B

Provides that, for the purposes of Part IIA, shift allowance shall be taken to have been payable on a regular basis during a particular period where it has been paid in respect of at least 75% of the pay periods during the particular period.

New Regulation 8C

Provides that, where the salary or wages of a person on a particular day includes shift allowance, the allowance is not to be treated as salary for the purposes of the Act unless the person:

(a)        has been a contributor for the whole of the 12 month period immediately preceding the particular day; and

(b)        shift allowance has been payable to the person on a regular basis during that period.

New Regulation 8D

Provides (paragraphs 8D(1)(a) to (g)) the method of determining the annual rate of salary on a particular day for the purposes of the Act for a person who:

(a)        has been a contributor for the whole of the 12 month period immediately preceding the particular day;

(b)        was a prescribed eligible employee (shift worker) during the whole or any part of that 12 month period; and

(c)        shift allowance was payable to the person on a regular basis during the 12 month period.

The annual rate of salary for superannuation purposes for such a person on a particular day will be the lesser of:

(d)        the highest amount of salary for the purposes of the Act payable to the person in respect of work performed in any pay period during the immediately preceding 12 month period expressed as an annual amount; or

(e)        the amount per annum of the person’s salary for the purposes of the Act on the particular day, excluding shift allowance, plus the total amount of shift allowance paid or payable to the person in respect of work performed during the immediately preceding 12 month period.

Paragraph 8D(1)(g) provides, in the case of (e) above, for shift allowance to be regarded as having been paid at current rates throughout the 12 month period where there has been an increase in the rate of the allowance for a particular shift during the 12 month period.


Sub-regulation 8D(2):

(a)        provides that, where shift allowance has been excluded from salary for the purposes of the Act on a particular day by regulation 8C, it shall be deemed to have been included in salary on that day for the purposes of (d) above; and

(b)        clarifies the situation where the rate of shift allowance for a particular shift is expressed as a monetary amount rather than as a percentage of salary.

New Regulation 8E

Provides the method of determining the annual rate of salary for the purposes of the Act for a contributor who retires on invalidity grounds or dies and to whom regulation 8D does not apply at the date of invalidity retirement or death and who:

(a)            was a contributor and a prescribed eligible employee (shift worker) during the whole of the 12 month period ending on the date of retirement or death and to whom shift allowance was payable on a regular basis during that period; or

(b)           (i)              became a prescribed eligible employee (shift worker) during the 12 month period ending on the date of invalidity retirement or death and to whom shift allowance was payable on a regular basis during the period commencing on the day the person last became a prescribed eligible employee and ending on the date of invalidity retirement or death; and

 (ii)              a certificate is given that shift allowance would have been payable to the person on a regular basis during the 12 month period commencing on the day the person last became a prescribed eligible employee (shift worker) if the person had not retired or died.

The annual rate of salary for the purposes of the Act for such a person on his or her last day of service will be determined in the same way as for a person to whom regulation 8D applies with provision for, in the case of a person referred to in (b) above, the amount of shift allowance received during the period to be translated to an annual amount.

Amendments to Part III

Part III of the Principal Regulations makes special provision for the determination of the annual rate of salary for a temporary employee on a particular day. It


provides that where the annual rate of salary (including allowances) of the employee increases, the amount of the increase is not to be treated as salary for the purposes of the Act on a particular day unless:

(a)        the employee has performed the work giving rise to the increase for a continuous period of at least 12 months immediately preceding the particular day; or

(b)        a certificate has been given that the employee is likely to perform the work giving rise to the increase for a continuous period of at least 12 months.

Part III also provides:

(c)        that where there has been more than one increase during the period only the lowest annual amount of increase is to be treated as salary for the purposes of the Act;

(d)        for the treatment of periods of leave of absence; and

(e)        the adjustment of the annual rate of salary for pension purposes in certain circumstances.

With the change in the provisions relating to the treatment of shift allowance as salary for the purposes of the Act it is necessary to remove the treatment of allowances as salary for temporary employees from the ambit of Part III and leave the treatment of those allowances to come within the ambit of the amended Part II and the new Part IIA. As a result of this change, Part III would deal only with the treatment of increases in salary (other than allowances).

The necessary amendments are made by regulations 5, 6 and 7. The amendments do not change the method of determining salary for the purposes of the Act except for the change in the treatment of shift allowance which is common to all contributors.