The Australian Government will ensure employers pay superannuation contributions on salary or wages back-paid to former employees.
Currently, a superannuation guarantee obligation only arises on salary or wages if the recipient was an employee sometime during the quarter. However, there are instances where payments are made in a quarter after the relevant employment relationship ceased, for example, where a court makes an award based on the underpayment of salary or wages. In these cases, there is currently no obligation on the employer to make superannuation contributions related to those salary or wages.
Under the proposed changes the Government will amend this. Compulsory employer contributions will be payable where an amount is paid in a quarter following the termination of an employment relationship. The resulting SG obligation will arise in the quarter in which the back payment is made.