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ARTICLE · 28 JUNE 2013

Can employers absorb superannuation guarantee increases?

Corrs Chambers Westgarth
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The article examines these latest amendments and the impact that are likely on existing and future employment contracts.

AustraliaEmployment and HR
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The Superannuation Guarantee (Administration) Amendment Act 2012 (Cth) (Amendment Act) was assented to on 29 March 2012, and will commence operation on 1 July 2013. Amongst other things, the Amendment Act amends the Superannuation Guarantee (Administration) Act 1992 (Cth) (SG(A) Act) to incrementally increase the superannuation guarantee (SG) charge percentage from 9% to 12% by the financial year 2019-2020.

Employers should consider whether these SG increases can be absorbed into the total remuneration being paid to current employees, by a commensurate reduction in their cash remuneration (or a reduction in other benefits). If not, employees will, effectively, be entitled to an increase in their total remuneration from the SG increases, with employers having to bear the extra cost of such increases.

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