CONTRACTOR ENTITLEMENTS TO SUPERANNUATION: TIME FOR REFORM?

Unlike common law employees, contractors typically do not have the right to have mandatory superannuation contributions made on their behalf. However, a legislative exception applies to contractors who receive payments through a contract that is ‘wholly or principally for the labour of the person’. The judicial interpretation of this statutory exception introduces considerable uncertainty and creates opportunities for manipulation. This article examines two additional statutory frameworks designed to distinguish contractor arrangements with workers who resemble employees: the personal services income (‘PSI’) provisions and the state payroll tax provisions. It concludes that there would be considerable merit in replacing the existing law with either of these frameworks as the method for determining contractor eligibility for mandatory superannuation contributions.<p></p>