The hiring of temporary residents will increase the administrative burden for employers if the Federal Government’s proposed superannuation change is approved, according to investment house Mercer.
The new regulations will see temporary residents’ super contributions diverted to the Australian Taxation Office upon an individual’s departure – with no interest paid on the balance.
In addition, if the balance is not claimed within a five year period it will be completely forfeited.
The new rules for temporary residents will result in employers having to process their super contributions differently to those of permanent residents. Mercer head of retirement Tim Jenkins said.
“Employers already have to cope with a heavy compliance burden in relation to Superannuation Guarantee and Choice of Fund in addition to employment contracts, industrial awards etc.”
“These proposed changes will weigh employers down even further with more red tape,” he said.
In Mercer’s view the changes will have a negative effect on employers as it could discourage the hiring of overseas staff.
“On one hand the Government has said that overseas workers have to be part of Australian businesses’ solution to the skills shortage – but on the other hand they are making it harder for employers to recruit these people,” Jenkins said.
