The compulsory nature of Superannuation has been a feature of the Australian employment landscape for well over a decade. Prior to this, superannuation was provided by only long-established companies and government departments that considered it an important employee benefit in attracting, retaining and rewarding valuable staff.

Award superannuation however was introduced in 1986 as part of a National Wage Case in an attempt to broaden superannuation savings to the wider working population. It is now a feature of the majority of most Federal awards and a large number of State awards. Award superannuation challenged the notion that superannuation was a benefit only for the privileged few.

The Superannuation Guarantee, which has applied from 1 July 1992, built on the foundation started by awards by spreading superannuation to most working Australians, not only those covered by awards. While there are no employers exempt from paying the Superannuation Guarantee as it applies to most of their full-time, part-time and casual employees, there are a number of employees for which an employer is not required to provide superannuation.
While all employers have an obligation under the Superannuation Guarantee legislation, this does not override any other obligation required by Federal or State awards, industrial agreements or employer contracts.

If an employer makes superannuation contributions under an award, and the award fund is a complying fund these contributions count towards meeting their Superannuation Guarantee obligations. However, as the Superannuation Guarantee is now at 9 per cent of each employee's earnings base, employers should ensure that no gap exists between the award requirements and that for superannuation guarantee purposes because penalties may apply.

Under the Superannuation Guarantee the employer must choose between providing the minimum level of support for employees to a complying superannuation fund or RSA or paying the Superannuation Guarantee Charge (including prescribed late payment penalties, to the Australian Taxation Office). The Superannuation Guarantee is then paid into a superannuation fund or RSA of the employee's choice.

Where the employer has provided the minimum level of support, the employer is able to claim a tax deduction up to the limits allowed by the ATO. Should no support be provided by the due date and, as a result, the Superannuation Charge becomes payable no tax deduction is allowed for the amount of the charge or the pate payment penalties.

The ATO has issued a number of specific rulings and determinations as guidance in determining an employer's obligations, who qualifies as an employee for superannuation purposes, including the status of contractors.

Awards usually specify when contributions are due while the Government also requires SG contributions to be paid quarterly. If an employer does not pay their contribution on behalf of their employees and the ATO imposes the Superannuation Guarantee charge, this payment will not be tax deductible.
The table on the following page, provides a brief overview of the differences between Awards and the Superannuation Guarantee.
This outline is provided by way of information.

If you are unsure of your obligations or require specific advice consult your adviser, consultant or your fund.

What are the differences between award and Superannuation Guarantee requirements?
This table summarises the different requirements of industrial awards and the Superannuation Guarantee. This table is of a general nature only and does not purport to cover every circumstance. Please contact your advisory consultant if you need more specific information.
Question	Award	Superannuation Guarantee
Which superannuation fund do i contribute to?	The fund is normally specified in the award but under super choice you may be allowed to pick another fund.	Any complying fund.
What qualifying period exists?	It depends on the award. Some awards may include a qualifying period, eg employees may have to work three months before they are entitled to superannuation.	Qualifying period is not determined by length of service but by wages paid. An entitlement is calculated from commencement of employment. An employee qualifies if $450 or more is paid in a calendar month.
Are part-time and casual employees excluded?	Award may exclude part-time and casual employees.	No specific exclusions, but wages qualification must be met before Superannuation Guarantee is due.
How are junior employees treated?	Generally no different to other employees, but some exemptions as a result of age may apply.	A junior may be exempt is under 18 years of age and working not more than 30 hours per week.
How frequently are contributions paid?	Varies, but monthly is common.	At least quarterly.
Can employees choose not to receive superannuation?	In some cases an employee can choose not to participate. Employers remain bound by relevant award provisions.	All eligible employees are covered unless the employee makes an irrevocable election stating that their vested benefits exceed their pension RBL.

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