The Government has introduced draft legislation which will make two significant changes to compulsory super. The first change is to increase the superannuation guarantee age limit from 70 to 75. The second change is to increase (over 7 years) the compulsory employer superannuation contribution rate from 9% to 12%. Both changes commence on 1 July 2013.
Importantly, both changes are dependent upon the enactment of the Government’s Minerals Resource Rent Tax legislation before 1 July 2013. If this legislation is not enacted by 1 July 2013, neither change will apply.
The first change means that employers will have to provide compulsory employer superannuation contributions for their employees aged between 70 and 75 (assuming the other conditions for compulsory super are satisfied). Currently, where an employee attains age 75 during a quarter, the employer’s superannuation obligations are based upon salary received by the employee before they attain age 75; and any salary received after age 75 is disregarded for superannuation guarantee purposes.
The second change is that the SG percentage will gradually increase from 9% to 12% as follows:
- 2012/13 and earlier financial years – 9%
- 2013/14 financial year - 9.25%
- 2014/15 financial year - 9.5%
- 2015/16 financial year - 10%
- 2016/17 financial year - 10.5%
- 2017/18 financial year - 11%
- 2018/19 financial year - 11.5%
- 2019/20 and subsequent financial years – 12%
The changes are set out in the Superannuation Guarantee (Administration) Amendment Bill 2011 which was introduced into Parliament on 2 November 2011.
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