On 18 September 2019, the Government introduced legislation to give effect to the Superannuation Guarantee Amnesty, originally announced in May 2018. This legislation highlights the strong focus that both the Government and the Australian Taxation Office (“ATO”) have on our superannuation system and in this instance, the obligations on employers to meet their superannuation guarantee payments for their employees.
The changes so far
The Superannuation Guarantee (“SG”) Amnesty is a further measure following a raft of integrity laws that came into effect from 1 July 2018 that included:
- powers to allow the Commissioner of Taxation (“Commissioner”) to issue directions to employers to pay unpaid and overdue SG Charge liabilities, and it being an offence for non-compliance with the direction (a penalty of up to 12 months’ imprisonment that can apply); and
- the extension of Single Touch Payroll (“STP”) reporting.
Superannuation Guarantee Amnesty amendments
In summary, the amendments provide:
- A one-off amnesty with reduced penalties and fees to encourage employers to disclose historical non-compliance with their SG obligations and pay any SG charge imposed in relation to this disclosure; and
- Allow employers to claim deductions for payments of SG charge and contributions made to offset the SG charge made in the amnesty period.
What is the amnesty period?
The amnesty period commences on 24 May 2018 and ends six months after the day these amendments become law.
How do employers qualify under the amnesty?
For an employer’s SG shortfall for a quarter covered by the SG Amnesty, an employer will qualify for the concessional treatment if, during the amnesty period:
- the employer discloses to the Commissioner, information that relates to the SG shortfall for the first time;
- the Commissioner has not, at any time before the disclosure, informed the employer that the Commissioner is examining, or intends to examine, the employer’s compliance with an obligation to pay SG charge for the quarter; and
- the employer has not been disqualified from the concessional treatment under the amnesty.
Disclosure of the SG shortfall
Disclosure of the SG shortfall to the Commissioner must be in the approved form. This is expected to include an SG statement.
The first SG statement for a quarter, under the SG law, has effect as an assessment of the employer’s SG shortfall for the relevant quarter and SG charge payable on that shortfall.
Progress of amendments
While the Bill introducing the SG Amnesty is currently in the House of Representatives, once the Bill receives the Royal Assent, there will be only six months to qualify for the concessional treatment. Therefore, employers with an SG shortfall should consider these concessions now. The ATO are, in the meantime, continuing their compliance activities for employers who have not complied with the SG obligations and an employer detected will then not qualify under the SG Amnesty.