COMCARE OPERATIONAL ADVICE NO 12
VOLUNTARY REDUNDANCY APPLICATION OF SECTION 20 OR SECTION 21
Branch Heads
State Commissioners
Majors
As a consequence of numerous 'help‑desk enquiries' in relation to voluntary redundancy the following information on the application of sections 20 and 21 to employees who have an entitlement to weekly payments of compensation under section 19 has been prepared.
SECTION 20
An employee who accepts an offer of voluntary redundancy and elects to receive a pension under a superannuation scheme as part of a benefits package would be subject to section 20.
The formula under which entitlement to compensation is calculated is contained in sub‑section (3) and the superannuation amount in the formula is, by interpretation in sub‑section 4(1), that part of the weekly amount of pension attributable to the Commonwealth's contributions.
SECTION 21
An employee whose voluntary redundancy results in the payment of a lump sum benefit under a superannuation scheme would be subject to section 21. The formula for the calculation of the compensation entitlement is contained in sub‑section (3) and again by interpretation in sub‑section 4(1) the superannuation amount is that part of the lump sum attributable to the Commonwealth's contributions.
An example of a lump sum benefit under a superannuation scheme for the purposes of section 21 is the lump sum benefit contained in section 62 of the Superannuation Act 1976. The section provides for the payment of a lump sum benefit of an amount equal to 3 1/2 times the amount of the employee's accumulated basic contributions. In this circumstance, the 'superannuation amount' under section 21 would be 1 1/2 times the amount of the accumulated basic contributions, the balance being that part of the lump sum attributable to the employee's accumulated basic contributions.
Under the Superannuation Act 1976, basic contributions are paid at the rate of 5% of salary for superannuation purposes and any contributions paid voluntarily in addition to the 5% up to a maximum of 10% are termed 'supplementary contributions'.
SUE HAMILTON
First Assistant Commissioner
20 February 1989
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