The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 was introduced into the House of Representatives on 18 September 2019. It seeks to legislate the SG amnesty that the Government failed to pass into law before the Federal Election. The legislation provides for a one-off amnesty to encourage employers to self-correct historical SG non-compliance.
Benefits of Qualifying for the Amnesty
Specifically, an employer that qualifies for the amnesty in relation to their SG shortfall for a quarter:
- Will have the administrative penalty waived ($20 per employee, per quarter)
- Will have Part 7 penalties waived (this can be an additional penalty of up to 200% of the shortfall owed)
- Will be able to deduct the late shortfall contribution (under current law, late payments cannot be deducted).
When does the Amnesty Apply?
Legislation enabling the amnesty is currently before Parliament and if enacted will apply from the date of the original amnesty announcement, 24 May 2018 until 6 months after the legislation has passed Parliament. Employers will have this period to voluntarily disclose underpaid or unpaid SG payments to the Commission of Taxation.
The amnesty applies to historical underpaid or unpaid SG for any period up to the March 2018 quarter.
Qualifying For the Amnesty
To qualify for the amnesty, a disclosure must be made by an employer during the amnesty period. Employers must disclose the outstanding SG to the Tax Commissioner and either pay the full amount owing or if the business is unable to pay the full amount, they will enter into a payment plan with the ATO. If the business agrees to a payment plan and does not meet the payment plan, the amnesty will no longer apply.
On releasing the legislation, the Assistant Treasurer said…
“Since the one-off amnesty was announced, over 7,000 employers have come forward to voluntarily disclose historical unpaid super. The ATO estimates an additional 7,000 employers will come forward due to the extension of the amnesty. This means around $160 million of superannuation will be paid to employees who would otherwise have missed out.
The amnesty reinforces recent changes to the superannuation system to improve the visibility employees have over their superannuation. We have given the ATO greater powers to ensure employers meet their obligations, and to help ensure employees receive their superannuation entitlements. The Government’s legislated package of integrity measures – part of the Treasury Laws Amendment (2018 Measures No. 4) Act 2019 – includes up to 12 months jail for employers who continue to do the wrong thing by their workers, and gives the ATO near real-time visibility of how much SG employees are owed and the contributions they actually receive.
This is a practical measure that is all about reuniting hard working Australians with their super. My message to employers who owe super is: come forward now. Do not delay. This is a one-off opportunity to set things right, and going forward the ATO has the tools to spot unpaid super”
With the 28 October Super Guarantee (SG) deadline just weeks away, it’s now more important than ever that employers meet their super obligations on time, and in full.
With Single Touch Payroll now compulsory for most employers, there is now real time, and more granular reporting of superannuation liabilities and payments – down to the employee level. The ATO will now know, in close to real time, if an employer is not paying superannuation in respect of any employee.
Employers should ensure they meet this upcoming deadline to avoid possible ATO scrutiny and penalties.
To discuss how this applies to your business, contact us or calculate your SGC amount using the ATO’s superannuation guarantee charge statement and calculator tool