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ATO Update : Newsbite

Increase in caps - 1 July 2022

The following caps have increased for the new financial year as per the ATO. These will be effective from 1 July 2022.

In addition to these, the ATO has issued a draft determination that will see the cents per kilometre reasonable amount be increased to 75 cents per kilometre from 1 July 2022. We will advise our members when this change has been confirmed.

Super Update : Newsbite

Flexible super – repealing the work test for voluntary superannuation contributions - 1 July 2022

Flexible super – repealing the work test for voluntary superannuation contributions From 1 July 2022, the existing work test (broadly a minimum of 40 hours of gainful employment within a period of 30 days) or the work test exemption for recent retirees’ will no longer be required for individuals aged 67 to 75 who make/receive salary sacrifice or non-concessional contributions (NCCs).

The work test or recent retiree exemption will still be required for individuals in that age range who wish to claim a tax deduction for their personal contributions. Under the new rules, the work test can be met in any period in the financial year of the contribution. This is different to the current rules, where the work test must be met prior to contributing.

Underpayment : Newsbite

ACT government underpaid superannuation of 633 Cultural Facilities Corporation staff members over 13 years

The ACT government has admitted to underpaying superannuation to 633 current and former staff members of the Cultural Facilities Corporation (CFC) for the last 13 years.

The CFC is an ACT government enterprise, which mainly manages hospitality and ticketing staff at the Canberra Theatre Centre.

In an email sent to workers and seen by the ABC, underpaid staff were told it was a “historical error” that occurred in the set-up of the CFC’s payroll software. The software was installed in 2009.

The email specified that 63 per cent of all staff who had worked for the CFC since then were impacted by the underpayments, which totalled over $315,000.

In a statement to the ABC, a spokeswoman for the CFC said “the problem was identified as a result of a routine internal audit”.

“The average underpayment over the entire period was less than $500 per affected staff member,” the spokeswoman said.

‘It took two years to let staff know and to let the union know’

Community and Public Sector Union ACT regional secretary, Maddy Northam said the CFC was made aware of the error in 2020.

“That it took two years to let staff know and to let the union know, it’s pretty unforgivable,” she said.

The CFC said the issue had been “very large and complex” to rectify, including reviewing 69,391 individual payslips, which it said had “taken considerable time and effort”.

But Ms Northam said staff members were “deeply concerned” and it was “pretty scathing on the organisation that they failed to pick up on it”.

“Of course, it’s disappointing that this is a government entity,” she said.

“However, the fact that it is a government entity means that we can work quickly with government to try and fix it, that’s the silver lining.”

The issue is in the process of being resolved, with the full amount plus interest set to be paid back to each affected worker.

Q. What termination payments don’t employers pay super on?

A. Many termination payments do not constitute an employee’s OTE and therefore do not qualify to receive super contributions. According to the ATO, lump sum termination payments for unused annual leave, unused long service leave and unused sick leave are not part of an employee’s OTE. Similarly, termination payments to compensate an employee for unfair dismissal and redundancy payments are not OTE. Therefore, none of these termination payments would attract super contributions.

Here’s a quick table to summarise a few different types of termination payments and whether employers typically must pay super on them:

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