1. Legal Framework
Social security refers to welfare payments handed out by the Australian federal government. These payments generally fall under one of four pieces of legislation:
- Social Security Act 1991 (Cth) (“the SSA”)
- A New Tax System (Family Assistance) Act 1999 (Cth)
- Student Assistance Act 1973 (Cth)
- Paid Parental Leave Act 2010 (Cth)
There are, however, a broad range of benefits available, including income assistance, youth allowance, carer allowance, age pension and many more.
2. Required Contributions
Superannuation in Australia is government-subsidised and encouraged. Minimum contributions are compulsory for employees, and presently employers must contribute at least 9.5% of a workers’ paycheck to their chosen super fund. This percentage changes from time to time and is next scheduled to change in July 2021, to 10%.
An individual can withdraw funds out of a superannuation fund when the person meets one of the conditions of release contained in Schedule 1 of the Superannuation Industry (Supervision) Regulations 1994.
Individuals can choose to make extra voluntary contributions to their superannuation and receive tax benefits for doing so. However, the current superannuation legislation states that individuals who contribute more than what is allowed under “the annual superannuation concessional contributions cap” must pay the superannuation excess concessional contributions tax which is set at 31.5%.
3. Required Maternity/Sickness/Disability/Annual Leaves
Parental Leave and Related Entitlements
The Fair Work Act provides for unpaid leave for parents who are giving birth to, or are adopting, a child. In essence, the Act provides for up to 12 month’s unpaid leave (or 24 month’s with the employer’s consent) for employees with a minimum of 12 month’s continuous service. There are some complicated rules when both parents wish to take leave. An employee is not entitled to parental leave under the NES unless they have 12 months of continuous service or are a “long term casual employee” (being a casual employee who has been employed on a regular and systematic basis during a period of at least 12 months).
The NES allows both parents to take separate periods of 12 months’ parental leave, including up to eight weeks of leave taken concurrently. The NES extends the parental leave provisions to apply to same-sex couples.
Under the NES, full-time employees are entitled to four weeks of paid annual leave (calculated by reference to the employee’s base rate of pay) and part-time employees to a pro-rata amount. Certain shift workers are entitled to five weeks of paid annual leave. Annual leave accrues over a year according to the employee’s ordinary hours of work (i.e. the hours set out in the relevant modern award or enterprise agreement).
Personal/Carer’s Leave and Compassionate Leave
The NES entitles employees to accrue 10 days of paid personal/carer’s leave per year and the number of such days that may be taken is not capped at 10 per year.
4. Mandatory and Typically Provided Pensions
The age pension was the first social security payment issued by the Australian federal government and dates back to 1909. It is presently available to persons aged 65 years and over, however, from 1 July 2017 the qualifying age will increase to 65 years and 6 months and then by six months every two years for the following six years, reaching 67 years by 1 July 2023.
Unlike pension payments of many other countries, workers do not contribute to a pension or insurance within Australia, and the payment is available subject to means testing.