What’s in store for 2015? Part 2

Analysis

What’s in store for 2015? Part 2

We conclude our two-part article on workplace-related changes on the horizon in 2015 with a review of the delayed and proposed changes to superannuation. We also preview the recently announced Productivity Commission review of the workplace relations framework.

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Yesterday we published the first in this two-part article from the NSW Business Chamber on workplace-related changes on the horizon in 2015.

Today we conclude with a review of the delayed and proposed changes to superannuation and preview the recently announced Productivity Commission review of the workplace relations framework.

4. Superannuation

Superannuation increases postponed

As a result of changes introduced in 2014 the legislated increases to the superannuation guarantee charge percentage have been pushed back until 1 July 2025. The percentage will now remain at 9.5% until 1 July 2021. However, that timing might change if there is a change of government. The charge percentage might increase when drafting letters of offer, employment contracts or negotiating enterprise agreements.  

Superstream rolling in

SuperStream is being implemented in three waves.

Wave 1 involved a small number of employers and some of the funds they contributed into and service providers they used. It was designed to test the system for bugs before ramping up to higher volumes.

Wave 2 is the major ramp-up phase as wave 1 funds with additional product identifiers (Unique Superannuation Identifiers (“USI”)) from the USIs they activated in wave 1, switch them on and other funds and major service providers enter the system. Wave 2 is in progress, although it too, is taking a bit of a break for Christmas with ramp-up on hold at mid-December levels. Wave 2 ramp-up will be on again in mid-January.

Wave 3 is intended to pick up USIs, funds and service providers (such as clearing houses, pass-through providers, payroll providers, cloud and non-cloud software providers) not already operating in SuperStream. Wave 3 will start in February.

Unlike in wave 1 where specific employers were directly engaged in transitioning, under waves 2 and 3 employers will be pulled into SuperStream when their contribution chain is ready. In the meantime, employers’ service providers and funds will be asking them to make changes to what they do, add information or correct it, as they get ready.

Superannuation law does not require small employers (those with fewer than 20 employees) to be SuperStream compliant before July 2016, but most will be operating under SuperStream well before that date because their contribution chain will be. 

SuperStream includes SMSFs and contributions to SMSFs are also required to be SuperStream compliant. This requires the contributing employer to know and to use/pass on the employee’s SMSF’s Electronic Service Address (“ESA”) so that contributions data is routed to it. Employees should have supplied their SMSF’s ESA by now. There is a new version of the Standard Choice Form which requires an employee wanting contributions into his/her SMSF to provide its ESA, banking details and ABN.

Proposed reforms

Changes affecting the Small Business Superannuation Clearing House (SBSCH) and when employers have to provide a Standard Choice Form (SCF) are proposed to take effect from 1 July 2015.

The SBSCH is a free service, passing on superannuation contributions and data for employers with fewer than 20 employees. The change will extend SBSCH eligibility to employers whose turnover is below the small business threshold (currently $2m).

The SCF changes will mean that employers will not have to provide a SCF to employees when their superannuation fund merges with another or to a new employee with a temporary working visa unless the employee requests one.

The government has advised additional changes scheduled for 1 July 2016. These include linking the superannuation guarantee charge for late contributions to the amount of the unpaid contribution and period of non-payment, and altering the penalty rates.

5. Productivity Commission review


On 19 December 2014 Minister for Employment Senator Eric Abetz and Treasurer Joe Hockey released the terms of reference for the long anticipated inquiry into Australia’s workplace relations framework to be conducted by the Productivity Commission. These require the Productivity Commission to assess the impact of the workplace relations framework and consider improvements, taking into account certain key interests, including:
  • Job creation
  • Fair and equitable conditions for employees
  • The maintenance of a relevant safety net of conditions for employees
  • Productivity, competitiveness and business investment, and
  • The needs of small business.
The inquiry will be an open process with all interested parties including employers, employees, academics and other interest groups able to participate and make submissions.

The Productivity Commission has been asked to make recommendations about how the workplace relations framework can be improved, and, following a draft report, is to hand its concluded report to the government by November 2015.

Source: The NSW Business Chamber provides a range of services and products for businesses, including industrial advocacy and workplace advice.
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