Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (APPROVED PART-TIME EMPLOYEES) REGULATIONS (AMENDMENT) 1991 NO. 469

STATUTORY RULES 1991 No. 469

ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE

SUPERANNUATION ACT 1976

SUPERANNUATION (APPROVED PART-TIME EMPLOYEES) REGULATIONS (AMENDMENT)

The Superannuation Act 1976 (the Act) makes provision for and in relation to an occupational superannuation scheme for Commonwealth employees and certain other persons.

Section 168 of the Act provides that the Governor-General may make regulations for the purposes of the Act.

Section 155 of the Act provides that the Act may be modified by regulations in relation to members or former members of the scheme who are, or have been, approved part-time employees.

Regulations for the purposes of section 155 are contained in the Superannuation (Approved Part-time Employees) Regulations (the Principal Regulations).

The amending Regulations amend the Principal Regulations to have regard to amendments that have been made to the Act since the Principal Regulations were made. They also include amendments designed to ensure that the arrangements provided for in the Principal Regulations can apply equally to all members of the scheme who are part-time employees.

The amendments contained in the amending Regulations are explained in the Attachment.

The Regulations operate from the date of Gazettal.

ATTACHMENT

DETAILS OF THE SUPERANNUATION (APPROVED PART-TIME EMPLOYEES) REGULATIONS (AMENDMENT)

Regulation 1

This provides that, in these Regulations, the Principal Regulations are the Superannuation (Approved Part-time Employees) Regulations.

Regulation 2

This provides that the Schedule to the Principal Regulations is amended in accordance with the following paragraphs:

Paragraphs (a) and (b)

The Principal Regulations modify the definition of "period of contributory service" in subsection 3(1) of the Act by omitting the definition and substituting a revised definition. Under that modified definition, any period during which an approved part-time employee contributes to the scheme in accordance with the modifications contained in the Principal Regulations will be treated as contributory service on a pro-rata basis only.

The Superannuation (Existing Invalidity Pensioners) Regulations modify the Act in its application to persons who, immediately before becoming members of the scheme, were existing invalidity pensioners. Those Regulations also modify the definition of "period of contributory service" in subsection 3(1) of the Act.

The modified definition included in the Superannuation (Existing Invalidity Pensioners) Regulations includes in the the person's period of contributory service the period during which the person was in receipt of an invalidity pension under the Superannuation Act 1922 and the period as a contributor under that Act on which the invalidity pension was based. The modified definition does not apply if the person is or has been an approved part-time employee.

Paragraph 2(b) inserts in the definition of 'period of contributory service' as modified by the Principal Regulations a new paragraph (c) which applies to a person who was an existing invalidity pensioner immediately before becoming a member of the scheme and who subsequently became an approved part-time employee. Paragraph (c) adds to the period of contributory service of such a person the period during which the person was in receipt of an invalidity pension under the Superannuation Act 1922 as well as the period in respect of which his or her entitlements under that Act were based in addition to the periods that would otherwise be included.

The Superannuation (Transfer Arrangements) Regulations modify the Act in respect of certain persons who, before becoming members of the scheme, were members of a superannuation scheme. In some cases these modifications include additions to the person's period of contributory service. Regulations 5, 9 and 11 of those Regulations provide for modifications which include variations to the period of contributory service of a person to whom those regulations apply. To ensure that those periods will be added to the person's period of contributory service if the person becomes an approved part-time employee, paragraph 2(b) also includes new paragraphs (d), (e) and (f) in the modified definition of "period of contributory service" in the Principal Regulations.

Paragraph 2(a) makes a drafting amendment to paragraph (a) of the definition of "period of contributory service" as modified by the Principal Regulations as a consequence of the changes made by paragraph 2(b).

Paragraphs (c) and (d)

The Principal Regulations modify subsection 3(1) of the Act by including a definition of "period of employment". This definition describes the actual period of membership of the scheme of a person who is, or has been, an approved part-time employee.

In line with the proposed amendments to the modified definition of "period of contributory service" in paragraph 2(b) above, paragraph 2(d) amends the definition of "period of employment" by including new paragraphs (c), (d), (e) and (f). Paragraph (c) applies to a person who was an existing invalidity pensioner immediately before becoming an eligible employee and who subsequently became an approved part-time employee. Paragraphs (d), (e) and (f) apply to persons to whom regulations 5, 9 and 11 respectively of the Superannuation (Transfer Arrangements) Regulations apply. Those paragraphs amend the definition of "period of employment" in the same way as the new paragraphs (c), (d), (e) and (f), as added by paragraph 2(b), amend the definition of "period of contributory service" .

Paragraph 2(c) makes a drafting amendment to paragraph (a) of the definition of "period of employment" as a consequence of the changes proposed by paragraph 2(d).

Paragraph (e)

This paragraph amends the modification to section 5 of the Act which was originally included to provide that the annual rate of salary of an approved part-time employee for the purposes of the Act is the rate that would have been payable had the person worked full-time. The modifications also include provisions to exclude from that annual rate of salary partial invalidity pension paid to certain part-time employees from salary.

It was originally necessary to exclude partial invalidity pension from the meaning of "salary" in the modified provisions of section 5 because, at the time those provisions were included in the Principal Regulations, partial invalidity pension was treated as salary for the purposes of the Act. In the cases involved, if partial invalidity pension had continued to be taken into account, those part-time employees in receipt of partial invalidity pension would have been advantaged over other part-time employees and also over full-time employees.

Since the Principal Regulations were made, the Act has been amended to provide that partial invalidity pension is no longer to be treated as salary for the purposes of the Act. Separate arrangements have been made in relation to the annual rate of salary of a person in receipt of partial invalidity pension.

As a consequence of the amendment to the Act to exclude partial invalidity pension from salary for the purposes of the Act, the modified provisions of section 5 as they apply to partial invalidity pension are superfluous.

Paragraph 2(e) omits the current modifications to section 5 of the Act and substitutes new modifications which are identical apart from the omission of the references to partial invalidity pension.

Paragraphs (f), (g) and (h)

Subsection 69(2) of the Act, as modified by the Principal Regulations, provides for the lump sum benefit available to certain persons who elect, on invalidity retirement, to receive a lump sum benefit in lieu of a pension.

Persons who had paid supplementary contributions were also entitled to receive a lump sum of their accumulated supplementary contributions in accordance with subsection 69(3) of the Act.

Since the Principal Regulations were made, subsection 69(3) has been omitted from the Act and subsection 69(2) has been amended to include a person's accumulated supplementary contributions in the lump sum provided for in that subsection. Similar amendments have been made to sections 72 and 73 of the Act.

To reflect these changes, paragraph 2(f) amends the modification to subsection 69(2) of the Act to provide that a lump sum benefit payable under that subsection as modified by the Principal Regulations will include the amount of the person's accumulated supplementary contributions (if any).

Paragraphs 2(g) and (h) make similar amendments to subsections 72(2) and 73(2) respectively.

Paragraph (j)

The Principal Regulations provide for the modification of paragraph 184(5)(b) of the Act so that the "non-disclosure provisions" contained in section 184 of the Act may be applied only to those approved part-time employees whose period of employment is less than 20 years.

For persons who are not approved part-time employees those provisions may only be applied where the period of contributory service of the person is less than 20 years.

The "non-disclosure provisions", if applied, can lead to the reduction of invalidity or death entitlements. To ensure that the "non-disclosure provisions" apply to all members for the same period, subsection 184(5) was modified by the Principal Regulations by replacing the reference to period of contributory service with a reference to period of employment.

Since the Principal Regulations were made, subsection 184(5) of the Act has been replaced by subsections (5), (5A), (5B) and (5C). The provisions previously contained in paragraph 184(5)(b) are now contained in paragraph 184(5A)(a) and similar provisions are contained in paragraphs 184(5A)(b) and (c) .

As a consequence, paragraph 2(j) omits the modifications to paragraph 184(5)(b) of the Act and substitutes modifications to paragraphs 184(5A)(a), (b) and (c) to provide that the reference to "period of contributory service" in those paragraphs is omitted and substituted with a reference to "period of employment".

Paragraph (k)

Section 8 of the Act provides for the recognition of additional periods of contributory service for certain persons who cease to be members of the scheme.

Section 8A of the Act, as inserted by the Principal Regulations, makes equivalent provisions in relation to periods to be added to the period of employment of an approved part-time employee.

Since the Principal Regulations were made, section 8 of the Act has been amended to provide for the recognition of additional periods of contributory service for persons who, having been in receipt of a deferred invalidity pension, again become members of the scheme. It is therefore necessary to include further modifications to section 8A to reflect the abovementioned amendments to section 8.

Paragraph 2(k) amends section 8A of the Act by providing for the recognition of additional periods of employment for persons who, having been in receipt of a deferred invalidity pension under the Act, again become members of the scheme.