Changes affecting superannuation, unfair dismissals and wages from 1 July 2017
Employment law update by Margaret Miller, Bell Legal Group
The main superannuation changes applying from 1 July 2017 are:
- $1.6 million transfer balance cap introduced;
- removal of tax exemption for transition-to-retirement pensions;
- the annual concessional (before tax) contributions cap reduced to $25,000;
- the annual non-concessional (after tax) contributions cap reduced to $100,000.
The high income threshold has increased to $142,000 pa from $138,900 per annum. Under unfair dismissal laws, an employee not covered by a modern award or enterprise agreement whose annual earnings exceed the “high income threshold” cannot claim unfair dismissal.
High income employees covered by a modern award can avoid or modify the award. An employer must provide a written undertaking guaranteeing annual earnings at least equal to the “high income threshold”. However, these employees remain “covered” by the award and may access unfair dismissal provisions.
The high income threshold is based on an employee’s annual rate of ‘earnings’.
Earnings include an employee’s wages, amounts applied or dealt with on the employee’s behalf or as the employee directs (such as salary sacrifice arrangements), and the agreed money value of non-monetary benefits.
Earnings do not include payments which cannot be determined in advance (commissions, incentive payments and bonuses, and overtime unless the overtime is guaranteed), reimbursements (including meal allowance, motor vehicle allowance, travel allowance) and employer contributions to a superannuation fund.
The maximum compensation the Fair Work Commission can order in an unfair dismissal matter from 1 July 2017 is now $71,000, previously $69,450.
The Fair Work Commission handed down its annual wage review on 6 June 2017. Changes include:
Minimum wage rates in modern awards are increase by 3.3% from the first pay period on or after 1 July 2017. Juniors and apprentices receive a proportionate increase to the adult rate. National Training Wages increased by 3.3%. Employees with a disability, who are paid a percentage of the adult wage, receive a 3.3% increase.
The national minimum wage has increased by 3.3% to $694.90 per week, or $18.29 per hour.
This article was prepared by Margaret Miller of Bell Legal Group for general information only and it is not legal advice. For legal advice about employment law and how it affects you or your business contact us on 07 5597 3366 or send an email to firstname.lastname@example.org