Australia - Super Changes For Employers.

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21 September, 2017


On 14 September 2017, the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017 (Cth) was introduced in the House of Representatives. The Bill contains two amendments which will significantly impact employers:


  • amendments regarding choice of superannuation funds for employees under workplace determinations or enterprise agreements; and
  • amendments regarding employee salary sacrifices to superannuation.


The provisions of the Bill were referred to the Senate Economic Legislation Committee for reporting by 23 October 2017.


Choice of fund


The Bill proposes to limit the exemption to the choice of fund regime under the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA Act) for employer contributions made under, or in accordance with, a workplace determination or enterprise agreement. This will provide employees with the opportunity to choose the superannuation fund for their employer’s superannuation guarantee (SG) contributions.


A ‘soft’ introduction of the changes is proposed under the Bill. From 1 July 2018:


  • a new workplace determination or enterprise agreement will not be able to require that an employer’s superannuation contributions be made to a specific superannuation fund, as employees will have a choice of fund;
  • a choice of fund form only needs to be provided to new employees employed under a workplace determination or enterprise agreement; and
  • a choice of fund form does not need to be provided to existing employees if the employer continues to make superannuation contributions to a superannuation fund that they were previously contributing to under, or in accordance with, the previous workplace determination or enterprise agreement.


Salary sacrifice integrity


The Bill also proposes to amend the SGA Act to prevent employers from using their employees’ salary sacrifice contributions to reduce their minimum SG contributions. From 1 July 2018:


  • amounts that an employee sacrifices from their salary to superannuation cannot be used to reduce an employer’s SG charge;
  • sacrificed amounts will not form part of any late contributions an employer makes that are eligible to be offset against the SG charge; and
  • an employer’s SG contributions will be paid on the pre-salary sacrifice base. This will be achieved by introducing the concepts of ‘quarterly salary and wages base’ and ‘ordinary time earnings base’, which will include sacrificed amounts.


We will continue to track the progress of the Bill. In the meantime, employers should seek to understand how these changes might impact their business to ensure they can comply with the amendments once they take effect from 1 July 2018.


herbert smith Freehills


For further information, please contact:


Miles Bastick, Partner, Herbert Smith Freehills 

[email protected]