Superannuation

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Occupational superannuation

Superannuation is a structured way of providing an income for employees after retiring from work due to age or ill health.

The majority of employees in Queensland are entitled to have contributions paid into superannuation funds as a condition of their employment.

Employers in Queensland must comply with provisions relating to industrial instrument (award or agreement) based superannuation and the Commonwealth Government's Superannuation Guarantee Charge. An employer is required to ensure that they meet the minimum requirements set out in both the industrial instrument and the Guarantee.

Industrial instrument based superannuation

In 1987, in National and State wage case decisions, the Federal and State Commissions adopted principles on the provision of occupational superannuation as an industrial instrument entitlement. This benefit was awarded in lieu of a direct increase in industrial instrument wages for employees at the time.

The majority of industrial instruments now include superannuation clauses. However, there are some industrial instruments that still do not include such clauses and there are many employees who are not covered by industrial instruments.

Superannuation guarantee

Employers may find they are required to make contributions under the provisions of the Commonwealth Superannuation Guarantee (Administration) Act 1992. Payment of superannuation in accordance with this Act will usually fulfil an employer's obligation to pay industrial instrument based superannuation.

Eligibility

Reference needs to be made to the Superannuation Guarantee (Administration) Act 1992 to determine whether the employer is liable to make contributions on behalf of an employee. Should an employee not be eligible in accordance with that Act, reference needs to be made to the relevant industrial instrument or agreement to determine whether the employee is eligible under that document.

Eligibility under the Act and industrial instruments are usually dependent upon the employee's level of earnings, their status of employment and in some cases the number of hours worked each week or month.

A general ruling by the full bench of the Queensland Industrial Relations Commission effective from 1 January 2005 has set the minimum level of earnings under the majority of Queensland awards at the same level as the federal legislation. i.e. earnings > $450 in a calendar month.

Exemptions

Some employees are excluded from the Superannuation Guarantee. They include:

employees paid less than $450 in a calendar month
employees under 18 years working 30 hours or less per week
employees paid for work done outside Australia
employees aged 70 and over
foreign executives with an appropriate visa or entry permit
employees paid to do work of a domestic or private nature for not more than 30 hours per week, e.g. nanny, housekeeper.

Superannuation contributions

Should an employee be eligible under the terms of either the Act or an industrial instrument, it is compulsory for their employer to make contributions into an approved superannuation fund on their behalf. The Act or industrial instrument will set the level at which contributions are to be made.

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Employment conditions