The Government has introduced legislation to give employers a 12-month amnesty to lodge any unpaid compulsory superannuation contributions owing to employees without copping administration penalties levied by the ATO. The amnesty is a once off opportunity for employers to 'do the right thing' and self-correct past Superannuation Guarantee (SG) non-compliance dating back to 1992.
In recent times unpaid super has become an issue with the ATO estimating $2.8 billon going unpaid annually and Industry Super Australia submissions to Parliament on the subject put the figure as high as $17 billion over the past seven years.
To be eligible, employers must come forward and disclose previously undeclared superannuation shortfalls during the amnesty period and before they are subject to an audit of their SG. The benefits to employers if the legislation is passed in its current form:
not liable for the administration component and penalties that may otherwise apply to late SG payments, and
be able to claim a deduction for catch-up payments made in the 12-month period.
Employers will still be required to pay all employee entitlements. This includes the unpaid SG amounts owed to employees and the nominal interest. Employers who are not up-to-date with their SG payment obligations to their employees and who don't come forward during the Amnesty may face higher penalties, in general a minimum penalty of 50% would be applied.
The amnesty, if passed by Parliament, will have a retrospective commencement date of 24 May 2018 and will run for twelve months till 23 May 2019.
For further information on the Superannuation Guarantee Amnesty please click here. To take up the Amnesty, there are a number of considerations and forms to complete and therefore advice should be sought in each case.