Private ruling: Superannuation Guarantee - Directors Stipends
Published: May 2012

Ruling: For superannuation guarantee purposes, an employee includes not only people who come within this ordinary meaning, but also anyone who comes within the expanded meaning set out in section 12 of the Superannuation Guarantee (Administration) Act 1997 (SGAA). | Under subsection 12(2) of the SGAA, a person who is entitled to payment for the performance of duties as a member of the executive body (whether described as the board of directors or otherwise) of a body corporate is, in relation to those duties, an employee of the body corporate. | In the majority of circumstances, such a person will be called a 'director'. Paragraphs 62 and 63 of Superannuation Guarantee Ruling 2005/1 Superannuation guarantee: who is an employee? states that the SGAA will apply even if the person is not referred to as a director but falls within the terms of subsection 12(2). | The Management Body is a corporation by way of the Constitution as per the governing Act and each of the Authorities are a body corporate as per the governing Act. As the entities are body corporate, any members of the executive bodies of these entities are subject to the provisions of subsection 12(2) of the SGAA. | Payments for the performance of duties as a member of the executive body (whether described as the board of directors or otherwise) of a body corporate are included as 'salary or wages' under paragraph 11(1)(b) of the SGAA. | The governing Act provides for the payment of fees, allowances and expenses to members and directors of the Management Body and Authorities. The governing Act provides that a fee paid under this clause does not constitute salary for the purposes of any Act. Where a State Act contains provisions that are inconsistent with a Commonwealth Act section 109 of the Commonwealth of Australia Constitution Act provides direction and states: | When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid. | Therefore, paragraph 11(1)(b) of the SGAA overrides the governing Act and any fees paid to members of the executive bodies of the Management Body and Authorities would constitute salary and wages for the purposes of the SGAA. | Therefore, in this case, superannuation support is required to be provided for the members of the Management Body and Authorities under the SGAA.

Relevant facts and circumstances: The Body has supervision and oversight responsibilities in connection with various Authorities established by a State Act. The Authorities are governed by separate boards, each consisting of a number of directors or councillors. Payments made to directors for their services. The governing act provides that "… a fee paid… does not constitute salary for the purposes of any act…". In an internal document, which sets out the basis for the remuneration of directors the issue of separate superannuation contributions is not mentioned. Similarly, a ministerial briefing document, which was to be effective for remuneration levels from 1 January 2010, does not indicate any treatment of superannuation contributions. Superannuation contributions have not been paid on behalf of the directors to date. Advice For superannuation guarantee purposes, an employee includes not only people who come within this ordinary meaning, but also anyone who comes within the expanded meaning set out in section 12 of the Superannuation Guarantee (Administration) Act 1997 (SGAA). Under subsection 12(2) of the SGAA, a person who is entitled to payment for the performance of duties as a member of the executive body (whether described as the board of directors or otherwise) of a body corporate is, in relation to those duties, an employee of the body corporate.



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