New South Wales Branch
PO Box 277 HURSTVILLE NSW 2220
Tel/Fax:02 9579 2333
Mob:0412 880861
Email:
ABN:93149961882
24 January 2013
ARTIO NSW INFORMATION CIRCULAR 1/2012
Superannuation Payments for Long Distance Truck Drivers
Members may recall that after a protracted period of negotiation between the Australian Road Transport Industrial Organisation (ARTIO), working in partnership with other Industry Associations, and the Australian Taxation Office (ATO), ARTIO NSW issued very clear advice in relation to the definition of “Ordinary Time Earnings” under the Road Transport (Long Distance Operations) Award 2010 (the Long Distance Drivers Award) and accordingly the manner in which employers were required to calculate Superannuation Guarantee Levy (SGL) payments.
Consequently our advice to members and accordingly industry practice has been to calculate the SGL payment on 9 percent of “the base (weekly wage rate) rate multiplied by 130 percent”. The 30 percent being the Industry Disability Allowance, an element of the calculation of the kilometre rate provided for in the Award. The identified 20 percent Overtime Allowance built into the kilometre rate was not to attract the SGL.
We are aware that many members and/or your company accountants will have received a letter dated 21st January 2013 from the ATO advising that that previous advice “is no longer correct and may no longer be relied upon”. The ATO is relying on the recently released administratively binding advice in introducing this change.
The ATO are now saying that it is incorrectto cap the ordinary hours of work (to say, say, 38 or 40 hours) and treating hours worked in excess of the cap as overtime.
The practical effect of this ruling is that the Superannuation Guarantee Levy is payable on the total kilometre earnings of the driver, divided by 1.2, which removes the 20 percent overtime factor in the kilometre rate but retains the 30 percent Disability Allowance.
The ATO have stated that they will be checking compliance, to the interpretation set out above in the Transport Industry, for the quarter commencing 1st January 2013.
Where to from Here?
Your Association is obliged to advise you that you should calculate and remit each employee’s superannuation payment from the 1st January 2013 in the manner described above.
ARTIO has been engaging the ATO on this subject throughout the several months leading up to Christmas 2012. To say the least, we are disappointed in the outcome reflected in the ATO interpretation. It will take an employer or a number of employers to mount a legal challenge to the Ruling, following an adverse assessment by the ATO, to have this matter reconsidered. ARTIO will consider this matter further at its National Council meeting in early February 2013.
In addition, members might recall published information throughout 2012 advising that we had filed applications with Fair Work Australia under the Modern Award Review process seeking a number of changes to both the Road Transport Distribution Award 2010 and the Long Distance Drivers Award. In part, our application under the Long Distance Drivers Award seeks to clarify the interpretation of ‘ordinary hours of work’ and consequently ‘ordinary time earnings’ to reflect the interpretation of the ATO Ruling from 2009. ARTIO will continue with this application. The next stage in the Modern Award Review process is a Conference of the parties before Fair Work Australia on the 1st February 2013. ARTIO will be represented at these discussions.
Your Association most certainly understands the impact of the ATO ruling on your business. We understood the impact in 2009 and we understand the impact in 2013. One option to be considered will be to again engage with the Commonwealth Government outlining to the relevant Minister the severity of the impact on the viability of your business, of the ATO ruling.
Members will be provided with further advice and information as soon as it comes to hand. Please contact Hugh McMaster, tel 0412 880861, email if further information is required.