Australians receiving government financial assistance will no longer need to worry that additional superannuation contributions, prescribed by law or the rules of their super fund, will be considered when determining their eligibility to receive that financial assistance.
The Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, today introduced into Parliament an amendment to the definition of reportable employer superannuation contributions (RESC).
"Basically, if a working Australian who is receiving government financial assistance gets additional superannuation contributions they have no control over or cannot influence, because the amount of contribution is prescribed in law or the rules of their super fund, then that superannuation will no longer be considered as reportable employer superannuation contributions, so it won't be considered income when determining their eligibility for financial assistance," Mr Shorten said.
"It means we're not penalising people who are saving for their retirement through superannuation but who still require assistance. This gives effect to the Government's original intention that RESC should only be those contributions that employees can control, such as salary sacrifice-like arrangements."
The amendment will apply retrospectively back to July 2009 when RESC was first legislated. RESC are generally superannuation contributions made under formal salary sacrifice arrangements, but include other contributions an employee can influence.
Examples of additional superannuation contributions that will no longer be considered RESC include:
- Contributions required to be made under an enterprise agreement if the employee makes a post-tax contribution ('matched' contributions)
- Contributions required by legislation.
"The amendment to RESC follows consultation with industry and the public. The Government has listened to stakeholder feedback, and made some adjustments to the draft amendment to make it clear that this refinement covers the public and private sector equally," Mr Shorten said.
The Government is also considering wider issues concerning the RESC definition.
"These things are important to get right. In addition to introducing this amendment today, to provide clarity for those affected, we will have a further process to determine what, if any, additional refinements may be needed."