Superannuation Guarantee Payments
What are Superannuation Guarantee Payments? Are you eligible for them? How can you make sure they are paid in your behalf? What to do if you think they aren’t being deposited in your super? What about contractors are they entitled to Superannuation Guarantee Payments?
These questions are very important if you are a Super fund member or are planning to. Let’s begin with our first question
What are Superannuation Guarantee Payments?
Superannuation Guarantee Payments are a way to save for your retirement. In many countries they are called pension funds or retirement savings. The principle is not new but the Australian Super Fund puts a new twist by increasing the flexibility and control provided to users. The idea is to force people to save for retirement by getting employers to deposit 9% of the employees wage in a Super fund. The government forcing the employer to make the payment instead of using taxes to fund the pension fund is of course a smoke screen or gimmick. The 9% payment actually becomes part of the employee’s wage that is how the employer sees it when he has to calculate the real cost of having a worker. Wages must be adjusted to take this new expense into account which will eventually mean a readjustment of wages in line with this new expense. In the end it is the employee that pays the cost, there is little difference between setting up a tax to pay for pension funds or forcing people to contribute 9% of their wage towards their pension fund.
However, smoke screen or not it is an effective way to get people to save from the moment they start working.
When are you eligible for Super Guarantee Payments?
If you work for someone you are more than likely eligible as the requirements are very easy to meet.
If you are:
Over 18 and under 70 and made over $450 before tax you are eligible and even if you are under 18 you are also eligible if you worked more than 30 hours on a given month.
What if you think your employer is not paying your Guarantee?
You will know if your employer is paying you Super Guarantee Payments because you will receive an annual member’s statement from your fund. If you do not receive the statement or it is inaccurate then you must talk to your employer and try to settle the problem. Prepare yourself with specific questions for your employer, how much is he paying, to which fund, how often?
If you still feel like you are not being paid your due in Guarantee payments you can file a complaint to the Tax Office.
What about contractors are they eligible for Guarantee Payments?
The answer is maybe. If you are contracted under a contract that is mainly for labor your employer might be liable to pay Guarantee Payments. Talk to your employer and contact the Tax Office for more information on this issue.