(a) Contributions cap
On 12 May 2009, the Australian Taxation Office (ATO) sent letters to individuals who may have exceeded their superannuation contributions cap for 2007–08. Since that time, the ATO has identified errors in its systems and further areas where errors in fund and member reporting data have led to some members’ concessional and non-concessional contributions being incorrectly calculated. Funds have been asked to re-report where they are aware of any errors and the ATO is correcting its system errors. Taxpayers may receive further communication from the ATO regarding these errors.
(b) Superannuation guarantee
The Tax Office has released an Addendum to Superannuation Guarantee Ruling 2009/212, SGR 2009/2A1—Addendum: Superannuation guarantee: meaning of the terms 'ordinary time earnings' and 'salary or wages'. The Addendum amends Superannuation Guarantee Ruling SGR 2009/2 to reflect the recent amendment of the Superannuation Guarantee (Administration) Regulations 1993 which ensures that employers do not have to make superannuation guarantee payments on paid parental leave and certain ancillary leave payments (as discussed above in the Federal Parliament update). The Federal Government announced this measure in the 2009–10 Budget. The Addendum applies from 1 July 2009.
The Addendum states that it also ‘clarifies the status of workers' compensation payments in cases where employment is not terminated but the employee does not attend work due to his or her injuries. This Addendum does not represent a change to the Commissioner's view on these payments’.
The Ruling now contains (with effect from 1 July 2009, according to paragraph 12 of the Addendum) the following paragraph 68:
‘Any workers’ compensation payments received by an injured employee for the hours the employee performs work or attends work as required form part of ‘salary or wages’. In contrast, if the employment has been terminated, or if the employee is paid workers’ compensation for hours not worked (or not attending work as required); the payment would not be ‘salary or wages’ as in these situations it cannot be said that the payment is a reward for the services of the employee to the employer.’ [Emphasis added.]
We consider that the position is still clear where worker’s compensation is being paid to an employee who is not working at all. However we consider that the insertion of the reference to the hours worked by an employee or the hours the employee attends work leads to some uncertainty where the employee is returning to work.