EmployerNews Jun 10

Member benefit statements

It’s that time of year again and LGsuper is preparing to finalise transactions for the year ended 30 June 2010 and produce member benefit statements. It’s important that you keep contributions up to date by paying contributions and lodging contribution data files promptly. You should also remind employees to update any address changes by 31 August. Members can update their details via our secure website LGsuper online. Member benefit statements will be sent out from mid September 2010.

Online termination advice

You may already be aware that you can advise LGsuper of an employee’s termination through Employer online. We have now enhanced the process to enable you to provide updated postal address details for the employee, along with their termination details.


Website tailored to you

In the next couple of months you will notice some changes to LGsuper’s website. A new section tailored specifically to employers is currently being developed. It will contain information on how to administer contributions, new employees and leaving employees, as well as the features you currently enjoy such as employer publications, Employer online and the BPAY calculator.

In addition, you will have access to member information on investments and account features. When you see our new home page, simply click on I’m an employer to enter the employer section. We will continue to add information and features to this section and we encourage you to email us if you have any suggestions on what you would like included.


2010 Budget - what it means for employers

The 2010 Budget and the Government’s response to the Henry Tax Review contained a number of measures that are relevant for employers.

An increase to the Superannuation Guarantee (SG) rate

In its response to the Henry Review, the Government announced its intention to increase the SG rate from 9% to 12% over a 7-year period. The rate will increase from

1 July 2013 as follows:

An increase to the eligibility age for SG

Currently employers are required to pay SG contributions for employees who are under age 70. In response to the Henry review, the Government has announced an increase to the eligibility age to 75 from 1 July 2013.

As these changes are implemented, LGsuper will contact councils with further information

Personal income tax rates lowered

From 1 July 2010, the 30% income tax threshold will increase from $35,001 to 37,001 and the marginal tax rate for incomes between $80,001 and $180,001 will reduce from 38% to 37%.

The low-income tax offset will increase from $1,350 to $1,500 for those eligible. This means that no income tax will be payable on the first $16,000 of income.

Fixed limits for contribution caps

The under age 50 before tax contributions limit will remain at $25,000, while for those aged 50 or more, the transitional before-tax contribution limit will remain at $50,000 for the 2010/11 and 2011/12 financial years. These limits include employer and any salary sacrifice contributions.

The after-tax contribution limit will remain at $150,000 for 2010/11.

From 1 July 2012, persons over age 50, with a total superannuation balance of less than $500,000 will continue to have a before-tax contributions limit of $50,000 (indexed).

Permanent reduction to the Government co-contribution

The superannuation co-contribution will be permanently reduced to $1000. Previously, it was intended that the co-contribution would be reduced from $1,500 to $1,000 for a period of 3 years, before increasing to $1,250 for 2 years and then returning to $1,500 from 1 July 2014.

During 2010/11 the Government will put in $1 for each $1 you contribute to your super, if you are employed and your total income is less than $31,920 p.a. The co-contribution will gradually reduce for incomes above $31,920 p.a. before cutting out completely for incomes above $61,920 p.a.

The eligibility thresholds for the co-contribution will continue to apply for the 2011/12 financial year. The thresholds will start to be indexed from 1 July 2012.

Government contributions tax rebate for low income earners

From 1 July 2012, the Government will introduce a $500 rebate to superannuation for low-income earners with an adjusted taxable income below $37,000, to offset the contributions tax payable on their SG contributions.

Please note, all of the measures outlined above are proposals only and have not yet been legislated.