The government surprised a great many people in late May with the announcement that it would allow employers to fix unpaid compulsory super payments to employees, all the way back to 1992, without penalties.
The 12-month superannuation guarantee amnesty is intended to apply retrospectively once enacted and, as the name suggests, it’s a once-off offer (from 24 May 2018 to 23 May 2019), so affected employers are warned that they should take advantage or miss out.
The legislation, Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2018 (read it here), mean that catch-up payments made (which are tax deductible) will not attract the penalties and charges under Part 7 of the SG legislation that usually accrue to late SG payments, nor will administration charges be applied.
To be eligible, employers must disclose their SG shortfall amount, including nominal interest, to the ATO within that 12-month period. If employers are subject to an audit of their SG they cannot take advantage of the amnesty for those periods. The ATO says that non-divulgence of such amounts may lead to harsher penalties in the future.
To further incentivise take-up, if the ATO identifies that an employer has an SG shortfall after the amnesty concludes, the Commissioner will take into account the employer’s ability to access the amnesty when determining any remission of the Part 7 penalty.
The guidance material states that the Commissioner must consider the particular circumstances of each case, however in general a minimum penalty of 50% would be applied to employers who could have come forward during the amnesty but did not do so. The Commissioner’s considerations for remission in cases following the amnesty will be outlined in ATO guidance materials.
The upcoming Monthly Tax Update webinar to be held Tuesday 12 June 2018 will cover much more on this measure, and also on the many other aspects of Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2018. This includes measures to address an SG catch-up in relation to employees with multiple employers, regarding non-arm’s length income, and the affect on limited recourse borrowing arrangements.
# [employer obligations], [SG], [SG amnesty], [supersnnuation guarantee]
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