Individual Flexibility Arrangement

The Special Minister of State has approved an individual flexibility arrangement (IFA) under clause 13 of the Commonwealth Members of Parliament Staff Enterprise Agreement 2016-2019 (Enterprise Agreement) to allow eligible ongoing employees to choose to be paid an allowance in exchange for a lower employer superannuation contribution.

The IFA will be available to ongoing employees whose employer superannuation is paid under the Superannuation Guarantee (Administration) Act 1992. This does not include employees who are members of the Commonwealth Superannuation Scheme (CSS), Public Sector Superannuation Scheme (PSS) or Public Sector Superannuation accumulation plan (PSSap) as the employer contributions to these schemes cannot be reduced by an IFA.

Should an employee choose to make an IFA, their employer superannuation contribution will be reduced to 9.5 per cent of their ordinary time earnings instead of the 15.4 per cent contribution under the Enterprise Agreement. The employee will be paid an allowance of 5.3881 per cent of their ordinary time earnings each pay. The allowance is taxable and will also attract an employer superannuation contribution. The employee’s overall remuneration, including employer superannuation, will be unchanged.

The option to make an IFA will be available to eligible employees from 1 July 2017.

If employees have any queries or wish to make an IFA, please contact the Ministerial and Parliamentary Services Help Desk on (02) 6215 3333 or email mpshelp@finance.gov.au.

Yours sincerely

 

Scott Ryan
Special Minister of State

22 June 2017