ACT PUBLICSECTOR
Mature Age Allowance Payments
- HRManagers
- Shared Services; and
- Other Staff
Purpose
To advise agencies and ACT Public Service (ACTPS) employees of details of the Mature Age Allowance Payment (MAAP) as set out in ACTPS Enterprise Agreements (clause C20.1-20.2).
- The Chief Executive may approve additional remuneration benefits instead of employer superannuation contributions being made for any of the following employees:
a)An employee who is seventy years or older and Commonwealth legislation precludes the payment of employer superannuation contributions for that employee; or
b)An employee is aged between sixty five and seventy years and the employee does not meet the work test (as defined by relevant superannuation legislation and rules)
where the Chief Executive considers that any such employee has the knowledge, skills and experience that are essential for the Agency to retain.
Background
- At the time of writing this Advice, individual superannuation fund rules, the Superannuation Industry (Superannuation) Act 1993 (SIS Act) and the Superannuation Guarantee (Administration) Act 1992 (SGA) impose limitations on employers making contributions to superannuation on behalf of employees aged over 70. Because of these legislative instruments, not all superannuation funds allow contributions for employees aged over 70.
- To counter this situation and to provide an equitable outcome for all employees, the ACT Government has agreed that where a particular fund does not allow the payment of employer contributions for employees 70 years of age and older these employees may receive an additional amount in the form of a payment which is made to the employee. The payment will need to be applied for using the Business Case Application attached (Appendix A). Payments will be effective from the date recorded on the Application.
- Where a superannuation fund still allows for employer contributions for employees aged between 65 and 75 years, ACT Government will continue to pay employer contributions to the employee’s nominated superannuation fund.
Operation of Mature Age Allowance Payment (MAAP)
- Detail of the operation of the MAAP and it’s administration is as follows:
Principles
The MAAP is not a superannuation payment. An individual employee’s retirement benefits are not altered by payment of the MAAP. However, an employee who receives a MAAP may choose to direct that payment to an alternative superannuation fund of their choice (subject to eligibility criteria).
The ACT Government will not compensate an employee for any loss of earnings where a fund does not allow the payment of employer contributions for employees 70 years of age and older.
Eligibility
Employees who are precluded, by individual fund rules or relevant superannuation legislation, from having employer contributions made on their behalf are eligible to receive the Mature Age Allowance Payment.
For employees who are members of a Commonwealth Superannuation Scheme (such as CSS or PSS) details of employee eligibility to make employee superannuation contributions and/or to receive employer superannuation contributions are available from the relevant superannuation funds.
Notification:
Employees approaching 70 years of age and employees approaching 75 years of age will be notified by Shared Services if their current superannuation scheme will no longer accept superannuation payments. A copy of this advice will be sent to the agency at the same time.
Entitlement:
Employees who are eligible for the Mature Age Allowance Payment, will be paid a sum equivalent to 9% of their gross annual salary. For employees who are full time or part time, these payments will be made on a fortnightly basis through the regular payroll system. For employees who are casual or employees who work on a contract basis, Shared Services will determine the amounts owing to the employee and pay these amounts retrospectively.
Casual Employees
The Mature Age Allowance will be paid to a casual employee based on the hours worked in each fortnight and the casual employee’s salary before the casual loading is applied.
Leave Without Pay
The Mature Age Payment is not payable during any period of approved leave without pay. The Mature Age Payment is not payable during any period of unauthorised absence.
Calculation of the Mature Age Allowance
Mature Age Allowance will be calculated by application of the formula:
MAA = A ÷ B X C ÷ D X E
A = Gross equivalent full time salary (excluding shift penalties and overtime)
B = 12/313 (average no. pay periods in a financial year)
C = Actual Hours per pay period
D = Standard Hours per pay period
E = Applicable percentage (currently 9 = .09)
Authority to Pay
Payment of the MAAP will only be made where the payment is authorised through clause C20.1 – 20.2 of the Agency Enterprise Agreements.
The payment will be made in accordance with the provisions of the relevant Agency Collective/Enterprise Agreement.
Mature Age Payment Not to Count as Salary
The MAAP will not be counted as salary in the calculation of final entitlements including:
- Payment of unused annual leave;
- Payment of unused long service leave;
- Severance benefit; and
- Payment in lieu of notice.
The MAAP will not be treated as salary in the calculation of:
- Shift penalties;
- Superannuation; or
- Overtime.
Financial Advice
Agencies should advise employees to seek appropriate financial advice should the employee choose to direct the MAAP to be paid into another superannuation scheme of their choice.
Further Information
- HR Areas that require further information regarding this Advice, please contact the Workplace Relations team, Public Sector Management Group.
- Employees requiring information on eligibility for the Mature Age Allowance Payment are advised to contact their Agencies’ HR area. For information on the payment of the allowance please contact Shared Services.
Approval Authority
Cathy Hudson
Deputy Chief Executive
6 December 2010
Document Name: Mature Age Allowance Payments
Prepared by: Senior Manager, Workplace Relations, Office of Industrial Relations
Version: Number 1
Feedback to:
Issue Date: December 2010