What about the self-employed ?

Self-employed are required to register with the scheme. If they wish to do so they can contribute into the scheme on their own behalf but only if they have service already recorded on the system as an employee to which they can add to.

Effective 1 July 2004, there are significant changes to the way this can occur.

At TasBuild, a self-employed person is classified as:

A person who works either as a Sole Trader or Partnership (notwithstanding the fact that a Partner may receive amounts that may be called 'salary' or 'wages');
Is unincorporated, that is, the business does not have a "Pty Ltd" or P/L in the business name; they are not registered with ASIC (Australian Securities & Investments Commission); and they do not have an ACN number (only an ABN).

A self-employed person may or may not employ other people.

TasBuild will set a rate at which a self-employed person can contribute into the scheme. The contribution rate will be reviewed annually. The rate for the financial year 2008-2009 will remain at $156.00 per quarter (this rate is based on a weekly wage of $720.00 per week). The self-employed worker retains the option of choosing to contribute in at a higher rate of $182.00 per quarter if they so wish (this rate is based on a weekly wage of $840.00). The self-employed person will receive an invoice for the amount chosen at the end of each quarter. Upon receipt of those monies their service record will be credited with the number of days in that quarter.

Interest will be applied to the contributions (compounding, calculated daily) that the self-employed person pays into the scheme on their own behalf. The interest rate will be set in late June/July each year for the following financial year based on the Fund's earnings in the previous financial year.

The rate for the 2008-2009 financial year will be 0% (due to the negative returns experienced in the market).
The rate for the 2007-2008 financial year will be 12.15%.
The rate for the 2006-2007 financial year was 10.6%.
The rate for the 2005-2006 financial year was 8%.
The rate for the 2004-2005 financial year was 9.25%.

Upon qualifying for a long service entitlement from the Fund the payment will be made in the following way:

Any self-employed service recorded with the Fund either as an employee or as a self-employed person up until 30 June 2004 will be paid as it always has been. For example, the number weeks accrued multiplied by the last current wage on the system as at 30 June 2004 (or earlier if that is the case), it will have income tax deducted and a Payment Summary will be issued.
Any contributions made under the new self-employed system will be refunded plus interest applied.

Should a self-employed worker contribute for themselves under the new self employed system and find that they cannot continue for whatever reason and have not yet qualified for an entitlement payment, they will be eligible for a refund of the contributions they have paid in on their own behalf. No interest will be applied if the worker has not qualified for an entitlement payment. Should a self-employed worker opt for a refund of contributions prior to qualifying for an entitlement they are unable to contribute again for those periods for which a refund was obtained.

Self-employed contributions under the new system are not subject to Goods & Services Tax (GST). Further contributions made are not tax deductible by the self-employed worker as it is voluntary for the worker to contribute into the scheme and not compulsory under legislation.*

*Current taxation advice from TasBuild's legal advisor and consistent with interstate schemes is that no tax is to be deducted from the self-employed component of the entitlement. The interest that you earn on contributions you have made for yourself is classed as assessable income, as such TasBuild will provide you with a statement upon receiving an entitlement which should be declared on your tax return.

Note: TasBuild's financial and taxation advice is intended to provide general information only. It is recommended, as with all personal financial and taxation information, advice be sought from your own financial/taxation advisor specific to your own personal objectives, financial situation or needs.

If you require any further information or explanation in relation to the above process please do not hesitate to contact our Operations staff on (03) 6233 7670.