Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (SALARY) REGULATIONS (AMENDMENT) 1992 NO. 397

STATUTORY RULES 1992 No. 397

Issued by the authority of the Minister for Finance

SUPERANNUATION ACT 1976

Superannuation (Salary) Regulations (Amendment)

The Superannuation Act 1976 (the Act) makes provision for and in relation to an occupational superannuation scheme for Commonwealth employees and for certain other persons. Members of the scheme are referred to in the Act as eligible employees.

Section 168 of the Act provides that the Governor-General may make regulations for the purposes of the Act.

Subsection 5(2) of the Act provides that, subject to subsection 5(3), the annual rate of salary of an eligible employee on a particular day is an amount equal to the amount per annum of the salary payable to him on that day.

Subsection 5(3) of the Act provides that the regulations may provide that an eligible employee's annual rate of salary shall be such amount per annum as is ascertained under the regulations.

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

The rates of contributions payable under the Act are expressed as a percentage of an eligible employee's fortnightly rate of salary. The rate of pension payable is expressed as a percentage of the person's final annual rate of salary. Both fortnightly rate of salary and final annual rate of salary are defined by reference to a person's annual rate of salary.

Part 2E of the Principal Regulations provides for the annual rate of salary for certain eligible employees who are employed on flexible remuneration packages.

Flexible remuneration packages allow recipients to choose to receive some of their remuneration in a non-monetary form instead of as salary. The components of a package can be varied from time to time.

The annual rate of salary of a person referred to in Part 2E of the Principal Regulations who is employed on a flexible remuneration package is the percentage set down in Schedule 1 to the Principal Regulations of the value of the person's package.

Some persons employed on packages may be required to act in a position higher than their substantive position. In this case, the value of their package will be increased to have regard to the increased duties.

For persons not employed on flexible remuneration packages who temporarily perform the duties of a higher position, the Principal Regulations have the effect of providing that any allowance for higher duties will be included in a person's annual rate of salary only in certain circumstances.

The allowance will be included in a person's annual rate of salary if it is received on a regular basis as provided for in regulation 6 of the Principal Regulations. It will be included at the lowest rate received in the immediately preceding 12 months or such lesser period during which higher duties have been performed. Also, the allowance will not be taken into account for the purposes of an age retirement or early retirement pension unless it has been received continuously for a period in excess of 12 months.

The Regulations amend the Principal Regulations to apply equivalent arrangements in respect of the component of a flexible remuneration package referred to in Part 2E of the Principal Regulations which is received only because the person is temporarily performing the duties of a higher position.

The Regulations are explained in the Attachment.

The Regulations commence from gazettal.

ATTACHMENT

SUPERANNUATION (SALARY) REGULATIONS (AMENDMENT)

The details of the proposed regulations are as follows -

Regulation 1

This provides that the Superannuation (Salary) Regulations are amended as set out in the amending Regulations.

Regulation 2

This amends subregulation 6(1) to provide that it applies for the purposes of paragraph 8QA(1)(b) as well as for the purposes of paragraph 5(1). Apart from this change the amendment does not change the meaning of subregulation 6(1).

Subregulation 6(1) provides that certain allowances, referred to as allowances of a prescribed kind, are to be taken to have been received on a regular basis in circumstances described in that subregulation. Allowances of a prescribed kind include higher duties allowance and extra salary received because a person temporarily performs the duties of a higher position.

Regulation 3

This amends subregulation 8Q(1) to make regulation 8Q subject to the new regulation 8QA.

Regulation 8Q provides that the annual rate of salary on a particular day of certain persons appointed or employed under an agreement which includes a flexible remuneration package shall be a percentage of the total value of the remuneration provided for in the agreement.

Regulation 4

This inserts new regulation 8QA to make provisions in relation to persons employed on flexible remuneration packages who are performing higher duties.

Subregulation 8QA(1) provides that where the person's remuneration includes an allowance because he or she is temporarily performing the duties of a higher position that allowance will be included in the person's annual rate of salary only if it is payable on a regular basis as described in regulation 6 of the Principal Regulations.

Subregulation 8QA(2) provides that the allowance for higher duties included in the value of the package will be taken to be an allowance of a prescribed kind for the purposes of paragraph 8QA(1)(b) and paragraph 8(1)(b) of the Principal Regulations. This is a technical provision necessary to enable the provisions of regulation 6 and regulation 8 to apply in respect of the allowance for higher duties.

For the purposes of paragraph 8QA(1)(b) this will ensure that the regular basis test in regulation 6 which applies in respect of allowances of a prescribed kind can apply. For the purposes of paragraph 8(1)(b) this will ensure that benefits payable on age or early retirement do not include the additional amount unless it has been received for a period in excess of 12 months.

Subregulation 8QA(3) provides that where the allowance has been payable at different rates in the immediately preceding 12 month period or such lesser period during which the higher duties have been performed the lowest rate of the allowance is included in the person's annual rate of salary.

The provisions of regulation 8QA apply equivalent arrangements to persons referred to in Part 2E of the Principal Regulations as apply already, through Part 2 of the Regulations (regulations 4 to 8), in respect of higher duties allowance received by other eligible employees.

In accordance with section 47 of the Act a person who is in receipt of higher duties allowance on the commencement of the amending Regulations will not be disadvantaged. In such cases section 47 provides for the allowance to continue as part of the person's annual rate of salary and to be updated from time to time to have regard to general salary increases.