1 March 2012

New Super Measure to Make System Fairer and Simpler

A new Bill introduced into Parliament today by the Gillard Government, the Tax and Superannuation Laws Amendment (2012 Measures No.1) Bill, will make superannuation simpler and fairer.

Excess contributions tax refund

The Bill gives eligible individuals the option to effectively have excess concessional contributions of up to $10,000 refunded and assessed at their marginal tax rates, rather than incurring the potentially higher effective rate of excess contributions tax.

"The introduction of this Bill marks another important step the Government is taking to improve the fairness of the superannuation system, by making sure those individuals who make a genuine mistake get a second chance," Mr Shorten said.

This measure is expected to provide relief to just over 30,000 individuals over the forward estimates period.

Securing super: better reporting of super contributions

The Bill sets up the framework for payslip reporting of superannuation benefits. It will require employers to report to employees, on payslips, not only how much super they will be paying, but also when they plan to pay it.

"This measure delivers on one of the central elements of the Government's Securing Super package, announced during the 2010 election campaign."

"If the business next door isn't paying their fair share of employee entitlements such as super, they have an unfair advantage relative to the business doing the right thing. This is bad for those businesses and bad for employees," Mr Shorten said.

"This measure will benefit those employees who are most vulnerable, that is, low-income, casual and part-time workers by giving them better information about the payment of their super entitlements."

During 2010-11 alone, the ATO investigated 17,943 employee complaints, raised superannuation guarantee entitlements for nearly 279,000 employees, raised $517 million and collected $269 million in superannuation guarantee charge, and collected $139 million in penalties.

The details of this measure will be in regulations. In developing the regulations, the Government will consult the public and will take a pragmatic approach, making it as easy as possible for employers to comply while still conveying essential information to their employees.

Other measures in the Bill

The Bill pauses the indexation of the superannuation concessional contributions cap for one year. As a result, the general concessional cap is not expected to increase from $25,000 to $30,000 until 2014-15.

Finally, the Bill also contains three measures that amend the GST and tax administration law following recent court decisions. The measures relate to the GST treatment of health supplies paid for by third parties, payments made under a government appropriation, and the Commissioner of Taxation's ability to retain refunds pending integrity checks.