The Minister for Revenue and Assistant Treasurer, Senator Coonan, today announced that through the 2002-03 Budget the Government has given effect to its superannuation election commitment to require Superannuation Guarantee (SG) contributions to be made at least quarterly. The new arrangements will commence from 1 July 2003.
As approximately 85% of businesses currently make superannuation contributions quarterly or more often, this measure will ensure fairness between employees and encourage employers to make regular superannuation contributions.
As part of a quarterly Superannuation Guarantee (SG) regime, the following will also apply:
- for defaulting employers, the Superannuation Guarantee Charge will be imposed quarterly with a lower administration component and the nominal interest component calculated from the beginning of the relevant quarter;
- the earnings threshold that determines whether an employee is entitled to SG will change from $450 per month to $1,350 per quarter. The quarterly threshold should reduce the compliance impact on business, particularly those with seasonal or casual workers (e.g. rural and retail sectors);
- employers will be required to report to their employees the amount and destination of SG contributions when contributions are made. Such a reporting regime would enhance employee ownership of retirement incomes issues and provide a mechanism that should alert employees in a timely fashion to the non-payment of SG; and
- in order to assist employers make the transition to quarterly payments, no administration or nominal interest components will apply to shortfalls arising within the first two quarters from 1 July 2003. This will permit employers to test their systems for providing more regular payment of contributions without fear of incurring penalties.