The Commissioner for Public Employment Ms Vicki Telfer announced today that the Northern Territory Government Department of Corporate and Information Services (DCIS) has recently identified it has been underpaying and overpaying some superannuation entitlements for staff for periods of up to 10 years.
Payment of salary to NTPS employees is not affected.
According to Ms Telfer, the situation has come to light following advice published by the Australian Taxation Office relating to rules for the application of superannuation guarantee to recreation leave loading. This clarification has affected a number of employers across the country.
Superannuation guarantee payments have been made correctly across the large majority of payment types for NTG employees. Employees and former employees who are members of defined benefits superannuation schemes (such as NTGPASS, NTSSS and the CSS) are not affected.
“We apologise to our current and former staff who may be affected by either these under–or over payments. We are focussed on paying our employees their entitlements, and will pay the correct amount of superannuation, plus interest, for all affected current and former employees,” Ms Telfer said.
Chief Executive Officer of DCIS, Mrs Kathleen Robinson said following the publication of the ATO advice DCIS examined the payment of superannuation and discovered errors in the payment of some superannuation entitlements.
“The historical errors are due to a combination of misinterpretation of the legislation and coding errors, which has resulted in underpaying superannuation for four payment categories and overpaying superannuation for two categories,” she said.
Superannuation underpayments relate to the following entitlements:
· recreation leave loading (including penalties in lieu) – since 2009
· payments in lieu of notice for termination or redundancy notice periods – since 2009
· eligible unpaid parental leave – since 2010
· Acting Judges – since 2013
“We will pay the unpaid amounts, plus interest. Interest will be calculated in line with the ATO rules for superannuation guarantee underpayments or superannuation investment returns for amounts related to unpaid parental leave,” Mrs Robinson said.
The superannuation guarantee underpayments and interest will be paid to the ATO who will pay both amounts into affected staff’s superannuation accounts.
For superannuation related to unpaid parental leave and interest, the NTG will pay the amounts directly into superannuation accounts.
The approximate combined value of the underpayments is estimated at over $30 million which includes $20 million in underpayments and a further $10 million in interest plus administration fees payable to the ATO. The superannuation underpayments affect around 16 000 current and 41 000 former employees.
On average, this equates to unpaid superannuation of approximately $350 per person (excluding interest and fees).
Superannuation overpayments above legislated entitlements were paid for the following two groups:
· employees with income above the superannuation guarantee quarterly earnings cap because that cap was not applied
· some Members of the Legislative Assembly (MLAs) by not correctly applying the formula provided in legislation to calculate their superannuation entitlements
These overpayments do not apply to Executive Contract Officers.
Superannuation overpayments arising in the last three years will be recovered in respect of current and former employees. Many of the overpayments are for relatively small amounts, so there will be a waiver of the first $2000 overpaid to remove the need for these to be repaid. The remaining overpayments equate to approximately $6.5 million, affecting around 390 current and former employees.
In addition, superannuation has been overpaid for 14 current MLAs, equating to approximately $36 000.
Mrs Robinson said a multiagency taskforce has been established to assist DCIS with the express purpose of identifying and addressing the underpayment and overpayment issues as soon as possible and to ensure that superannuation is paid correctly going forward.”
“The payroll system has been reprogrammed and additional processes introduced to ensure superannuation is paid correctly and on time.
“Work is also well underway to calculate the individual unpaid amounts, interest and overpaid amounts for affected staff. Affected people will be personally notified as soon as their details are validated and we expect this to occur over the next three months.”
Ms Telfer said the focus is on ensuring this remediation process is completed thoroughly and as quickly as possible, so we can ensure that the superannuation contributions and interest owing are paid into staff superannuation accounts and overpayments are recovered.
“An executive level steering committee has been established, which I am Chairing along with the Commissioner of Superannuation and DCIS Deputy Chief Executive to oversee the remediation process and ensure superannuation entitlements are paid correctly.”