Double social security coverage affecting people who work in Australia and Germany will be eliminated under a new agreement announced by the Australian government on Wednesday.
The new supplementary Social Security Agreement comes into effect on 1 October, 2008, according to an announcement by Australia's Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, and the Minister for Superannuation and Corporate Law, Senator Nick Sherry.
Double coverage arises where an employee is sent from one country to work temporarily in another country and the employer and the employee are required to pay superannuation or social security contributions for the employee in both countries.
"Australia and Germany already have a Social Security Agreement which helps people get pensions from both countries. This supplementary agreement will remove the doubling up on super payments," Macklin said.
"From October 1, when employees are sent temporarily to work in the other country compulsory superannuation and social security contributions will no longer be made into both countries' systems," she added.
"The Supplementary Agreement, signed in Berlin on 9 February 2007, deals exclusively with stopping superannuation 'double coverage' between the two countries," Sherry explained.
"Generally, seconded workers from Germany will continue to contribute to and be covered by the German social security system and will not be subject to Australia's Superannuation Guarantee. Similarly, Australian workers seconded to Germany will remain subject to Australia's Superannuation Guarantee and contributions will not be required into the German social security system," he added.
The ministers argued that the agreement will also improve economic links with one of Australia's major trading partners by reducing costs for businesses operating in Australia and Germany.
The new agreement incorporates the same principles of avoiding double coverage included in many of Australia's other social security agreements, including those recently signed with Korea, Japan, Greece and Finland.
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