On 18 September 2019, the Government introduced the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 (the Bill), which allows non-complying employers to self-correct any unpaid superannuation guarantee (SG) amounts dating back to 1992 under a one-off SG Amnesty (the Amnesty).
The Amnesty applies only to disclosures of previously undeclared SG shortfall amounts that are made during the Amnesty period. The bill has now passed both houses and is awaiting royal assent.
Companies will be required to pay back unpaid super with interest under the reprieve but will avoid substantial penalties from the ATO.
To be eligible for the Amnesty, an employer must:
§ voluntarily disclose SG shortfall amounts, relating to any period from 1 July 1992 to 31 March 2018, within the Amnesty period (24 May 2018 to six months after the day the Bill receives Royal Assent);
§ disclose SG shortfall amounts that have not previously been disclosed;
§ make the payment of the SG shortfall amount during the Amnesty period; and
§ not have been previously informed that the ATO is examining (or that it intends to examine) the employer’s SG compliance for the relevant quarter.
The Amnesty period:
§ commences on Thursday 24 May 2018 (being the date that the Amnesty was announced and on which the 2018 Bill was introduced into Parliament); and
§ ends six months after the day the Bill receives Royal Assent.
What are the benefits of the amnesty:
Usually under legislation if an SG payment is late any subsequent payments are not deductible. In addition, there is a Super Guarantee charge (nominal interest and administration component) that is payable.
Under the amnesty:
– the administration component will be waived. ($20 per employee per quarter)
– Part 7 penalty will not apply (this penalty can be imposed at up to 200 percent depending on Commissioners discretion)
– Catch-up SG payments will be deductible
What must an employer do:
– Disclose to the Commissioner information related to an SG shortfall for the relevant quarters
– Pay the outstanding SG amounts plus the nominal interest components under specific conditions (there is an ATO calculator for this)
– Need the fine print on how to make the payments and what else must be done. Ie see below.
There are a couple of options regarding the payment, either directly to the employee’s superannuation fund or directly to the taxation office.
If employers are able to pay directly to the super fund, the employer needs to complete an approved form and submit it to the ATO.
If you would like more information about this SG Amnesty – please telephone our office on 07 5536 2288.