TN 3 (02-23)

GN 01743.015 Coverage and Contributions under the Australian Social Security System

A. Overview of the Australian social security system

The Australian social security system provides old-age, survivors, and disability benefits. In addition, Australian law mandates employer contributions to supplementary retirement plans under a program called Superannuation Guarantee (SG). Although the dual coverage provisions of the Agreement apply to SG, the benefit provisions do not.

B. Description of the Australian social security system

1. The Australian social security program

Australia's social security program covers residents of Australia. General tax revenues, rather than specific payroll taxes, fund the program. Thus, a person could qualify for a social security benefit without ever having worked.

The Australian social security program pays a flat-rate benefit that is means-tested. If an individual's income and resources exceed certain limits the benefit is reduced or suspended. The Australian agency Centrelink administers its social security program.

2. The Australian Superannuation Guarantee Program

In 1992 Australia established the Superannuation Guarantee (SG) program of compulsory employer retirement contributions to private funds to supplement benefits payable under the social security program. Contributions and investment yield determine an individual’s benefit amounts from SG funds. The Australian Taxation Office provides Government oversight for the SG.

Australia's SG program applies only to employees; it does not cover self-employed persons. The SG program covers virtually all employees in Australia. Employers must contribute an amount equal to a minimum percentage of an employee's wages to an approved retirement fund chosen by the individual employee. The funds are subject to Australian laws and government regulation. Employee contributions are not mandatory; however, employees may choose to contribute additional amounts on a voluntary basis.


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GN 01743.015 - Coverage and Contributions under the Australian Social Security System - 02/02/2023
Batch run: 02/02/2023