The Prime Minister, Scott Morrison, has indicated that the government will delay a decision on whether to scrap next year’s scheduled rise in the superannuation guarantee (SG) rate until the May 2021 budget.
This follows the release of the government’s Retirement Income Review last week, which was tasked with improving the understanding of the system’s operations and the outcomes it is delivering for Australians. On the SG front, the report observed:
The weight of evidence suggests the majority of increases in the super guarantee come at the expense of growth in take-home wages. The view is based on empirical research, economic theory, evidence across a number of countries and the original policy intent of superannuation guarantees.
For background, in 2010, the Federal Labor government announced a staged increase to the SG rate to 12% by 2019. However, the Coalition government under Tony Abbott in 2014 delayed (and legislated) further guarantee increases until July 2021 as follows:
.png)
Putting off a decision until the May budget will still allow the government to act before the SG rate is due to rise to 10% on July 1, 2021 (as per the above table).
SG recent change reminders
Salary sacrifice - from 1 January 2020, salary sacrificed super contributions cannot be used to reduce an employer’s SG obligations, irrespective of the amount the employee elects to salary sacrifice. For example, returning to George, if he salary sacrificed $5,000 of his gross, before tax salary of $109,589, the employer must calculate its SG obligation on the $109,589…not on the post-sacrifice salary of $104,589.
JobKeeper - SG is not required to be paid on top-up payments that are made to employees as a result of JobKeeper payments
Extract from ABN.
