Our Super Future

by Rebecca Barnett

Remember this?

Nobody made super as exciting as Bernie

Back in the 90s, former Reserve Bank Governor, Bernie Fraser, tried to bore us all into joining an industry super fund with a series of ads carrying the infamous tagline “It’s the super of the future”. The long-running campaign was remarkably sticky and Bernie entered into the Australian psyche in a way that no Reserve Bank Governor had before, or has since.

If the massage industry is anything to go by, we are overdue for a whole new dose of Bernie: 57% of us are not being paid superannuation or making any provisions for it.

A generation of massage therapists are contemplating a destitute retirement.

And this concept terrifies me.

Myths versus facts

In the last instalment of this series about employment entitlements, we busted some myths about contracting. Let’s pick up where we left off and bust the biggest myth that businesses like to cling to: superannuation.

Myth: My business only takes on contractors so we do not have to worry about superannuation.

Fact: First of all, a business cannot decide to treat a worker as a contractor when the worker is actually an employee. This is called sham contracting. Revisit last week’s blog for more on how to spot the difference between an employee and a contractor.

Businesses that engage massage therapists as genuine contractors may still be required to pay them super under the Superannuation Guarantee because the therapist is being paid wholly or principally for their labour. If a contractor cannot delegate or subcontract their services to another therapist, they are considered to be an employee for superannuation purposes. The threshold at which the Superannuation Guarantee obligations kick in for businesses is when a worker earns more than $450 gross a month, be they casual, full time, part time or contracting.

To quote from the ATO website:

Contractors paid mainly for their labour are employees for superannuation guarantee purposes. This is the case even if the contractor quotes an Australian Business Number (ABN).

You must make super contributions for these individuals if you pay them:

– under a verbal or written contract that is wholly or principally for their labour – that is, more than half the dollar value of the contract is for their labour
– for their personal labour and skills – which may include physical labour, mental effort or artistic effort – and not to achieve a result
– to perform the contract work personally – that is, they must not delegate.

Australian Taxation Office

Remember, it doesn’t matter if you have signed a contract that says you are not eligible for super as a contractor. An unlawful clause in a contract is exactly that – unlawful. (I promise you that I have seen plenty of bad clauses and sworn even more plentifully. I saw the worst contract I have ever seen this morning and I ran out of swear words. True story.)

If you’re currently providing services to a clinic as a contractor and you have to perform the work personally (i.e. you can’t delegate the work) and you are grossing more than $450 a month, you’re eligible to be paid superannuation under the Superannuation Guarantee Act.

But don’t take my word for it. Go forth and use the ATO’s Super Guarantee Eligibility Tool and save the result to show the clinic you work for.

But My Contract Says I Can Delegate the Work

Just because your contract says you can delegate, doesn’t mean that this reflects the reality of your actual circumstances. As I explained in last week’s blog:

The written terms of the contract or agreement are a consideration, to see if they reflect the reality, but are not conclusive. The Court will consider the reality of the relationship of primary importance.

Andersons Solicitors

Is delegation even practicable in our industry? When you stop to consider that most contractors are required to come into a clinic with provider number eligibility and that provider numbers for many major funds, including Medibank Private, are associated with a particular practice location, then the whole idea of being able to delegate or subcontract to another therapist is pretty bunk. Another therapist sure as hell ain’t likely to have a provider number for that clinic.

Raise your hand if you’ve ever tested out the clause in your contract that says you can delegate to another therapist?

Didn’t think so.

Here’s the Rub

The overwhelming majority of massage therapists are sole traders with an ABN. But if you enter into a contract to provide services to a clinic as a company, trust or a partnership, then you’re not eligible for superannuation. If you think that might be you but you’re not sure and/or you’re confused, then you need to seek legal advice.

One More Thing …

Super doesn’t get paid by docking a percentage of your negotiated rate to cover the requirement  – it’s a minimum 9.5% ON TOP of what you have earned.

And Another Thing

You can use the ATO’s online lodgement tool to make a claim for unpaid superannuation any time. You just need your employer’s ABN, your tax file number, your super account details and the date range over which you have not been paid super. It takes about 5 minutes.

Are there any questions about superannuation we haven’t answered?

About the Author

As CEO of AMT, Rebecca Barnett cannot deny that her union roots run deep. Though she be but little, she is fiercely dedicated to massage therapists’ workplace rights. She is also a fan of Bernie Fraser.

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