The Federal Government introduced legislation into Parliament on the 2 November 2011 to increase the level of Superannuation Guarantee contributions from 9% to 12%. 

In addition to increasing the level of SG contributions to 12%, the Superannuation Guarantee (Administration) Amendment Bill 2011 also proposes to rise the SG age from 70 to 75, so employer contributions can be made for older employees.  The Government is also planning to introduce additional legislation amendments to remove the age limit on Superannuation Guarantee contributions.

All these measures are intended to commence from 1 July 2013.

The following tables outline the schedule of the increases for each year.

Employers will need to make superannuation contributions by the required time in respect of each quarter calculated at the correct percentage multiplied by the employee's ordinary time earnings; this is to avoid a "Superannuation Guarantee Shortfall".

The Government has also stated that the amendments are dependent on the Minerals Resource Rent Tax package being passed.

If this new legislation does pass in parliament than all employers will need to make sure that their payroll systems are configured to remote the increased contributions to each employee's superannuation fund, and any implications for employment agreements and remuneration packages will also need to be reviewed.

For those of you who control the purse strings within your individual business units, you will need to factor this proposed increase into your budgets and subsequent charge out rates to your recipients of your respective services.

ACSEA will keep you inform on when this has been passed.