The purpose of this Circular is to advise of developments regarding the extension of salary packaging for non-SES employees.

Salary packaging options will be extended from those presently available to Graded Officers within the NSW Public Service, in accordance with the attached 'Implementation Principles'. The Crown Employees (Public Sector - Salaries January, 2002) Award and Crown Employees Wages Staff (Rates of Pay) Award 2002 have now been varied by consent to support this extension of salary packaging. Key features of this extension include:

• Cost neutrality to the employer;
• Eligibility extends to permanent officers, including permanent part-time officers and temporary employees (where appropriate);
• A range of benefits can be packaged including Motor Vehicles (novated leases for 100% private use only); and

Option for Departments/agencies to limit the number of benefits they offer to facilitate implementation and contain administrative costs and fees.

Departments/agencies are advised that their liability to meet superannuation guarantee obligations will be based on pre-packaging salary in accordance with the Superannuation Guarantee (Administration) Act 1992. Employees are encouraged to seek independent financial advice prior to entering any packaging arrangements.

Subject to approval by the State Contracts Control Board, a period contract for the supply of salary packaging administration services to Departments and agencies will be introduced from 1 January 2003. Further advice on the period contract will be provided as soon as practicable.

Although the 1 January 2003 start date coincides with the commencement of the period contract, it is acknowledged that Departments and agencies will be at different stages of readiness to implement salary packaging. If your Department/agency chooses to use one of the successful contractors to provide salary packaging services then there will be a lead time to allow for the preparation of procedure manuals, necessary forms and information material specific to your organisation. This should be a joint exercise between your organisation and the selected contractor and is part of the requirements of the proposed period contract.

Actual implementation will be a matter for each Department and agency. However, based on recent individual enquiries received and union support for this initiative, there will be an expectation of an early implementation after 1 January 2003.

For enquiries, please contact:

Doug Cowell regarding operational issues on 9228 3575
Robert Horrocks regarding motor vehicle policy issues on 9228 4263
Bob Costello regarding financial and related information on 9228 4739.

It might be noted that the Trustee Board of First State Super proposes to conduct seminars on salary packaging in the first week of February 2003 as part of its ongoing program of providing advice to employers on topical issues. Presenters at the seminars will include Premier's Department staff who have been involved in the planning, negotiation and implementation process. For details of the seminars, please contact Ms Terri Duarte on (02) 9238 2514 or [email protected] .

Signed
C. Gellatly
Director-General

Issued (Branch): PSMO
Contact: Doug Cowell
EMail: [email protected]
Telephone no: (02) 9228 3575
File no: PSM/00361-4
Date: 11 December 2002
___________________________________________________
Supersedes C98-70 superseded by C2006-08 in relation to salary/wages limits
Superseded by C2007-11

___________________________________________________

SALARY PACKAGING FOR NON-SES EMPLOYEES

IMPLEMENTATION PRINCIPLES

Administration

• Generally, salary packaging will be cost neutral to the employer. Therefore, packaging administration fees may be charged to individual packages including commercial fees where the administrative service is outsourced.
• Changes by staff members to their packaging arrangements over time may incur additional administration fees.
• Individual Departments/agencies will decide whether to administer salary packaging in-house or outsource the administrative service.
• Where a decision is made to outsource the salary packaging service, local agreements may be made to continue to provide in-house arrangements (fee free) for staff currently salary sacrificing for superannuation only. These local agreements should be reviewed if, and/or when, staff members choose to expand their packaging arrangements beyond just superannuation.

Eligible Staff Members

• Permanent officers including permanent part-time officers.
• Temporary employees where appropriate and subject to Department/agency convenience.
• Employees covered by the Crown Employees Wages Staff (Rates of Pay) Award 2002.

Benefits that may be Packaged (the range of benefits will generally be consistent with SES packaging arrangements)

• Superannuation
• Motor Vehicle (Novated lease for 100% private use only)
• Housing - remote areas only
• Child Care (on employer's premises only)
• Priority of access fee for child care
• Professional subscriptions
• Taxi expenses
• Bus/rail ticket loans
• Education (self/professional)
• Laptops, e-organisers and briefcases
• The above benefits have been determined by the Minister for Industrial Relations, with the concurrence of the Treasurer, as Approved Employment Benefits for the purpose of superannuation. Therefore, superannuable salary as advised to the various Funds from time to time, will continue to be the staff member's pre-packaging salary.
• Departments/agencies may choose to offer a limited number of the above benefits to staff members in the first instance in order to facilitate a smooth introduction of packaging arrangements and contain administrative costs and fees.
• Staff members who move from one Department or agency to another are subject to the salary packaging arrangements that apply with the new employer.

Salary/Wage Limits

• Staff members will be able to package up to 50% of salary or wages.

Payments, etc normally based on Gross Salary

• Payment of allowances and other payments that are normally based on gross salary (eg overtime) will continue to be based on the staff member's pre-packaging salary. This principle will also apply to leave paid on resignation/termination.
• Employer's obligations under the Superannuation Guarantee (Administration) Act 1992 will also be based on pre-packaging salary levels.
• Appropriate consent award variations have been made to facilitate these arrangements for Departments.

Motor Vehicles - Specific Conditions

• Novated leases only.
• 100% private use only (no business/private split arrangements).
• Only one vehicle per staff member.

Independent Financial Advice

• The tax effectiveness of salary packaging will depend on individual circumstances and in some cases, may not be tax effective. Therefore, staff members should be encouraged by both the employer and the unions to seek independent financial advice prior to entering into any packaging arrangements.