Employers will have a six-month amnesty to correct historical Australian superannuation shortfalls, following the passage of key legislation. Parliament has approved The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019. The legislation now awaits Royal Assent to be enacted, which is expected shortly. This is a significant opportunity for employers to self-correct past superannuation guarantee (SG) non-compliance without the usual heavy penalty regime.
Employers will have a six-month amnesty to correct historical Australian superannuation shortfalls, following the passage of key legislation. The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 passed both Houses of Parliament on 24 February and now awaits Royal Assent.1
This is a significant opportunity for employers to self-correct past superannuation guarantee (SG) non-compliance without the usual heavy penalty regime.2 Once the amnesty ends, a new and even more onerous penalty regime will apply with an increased level of Australian Taxation Office (ATO) activity expected following the introduction of Single Touch Payroll (comprehensive payroll and superannuation reporting regime).
The amnesty includes under-payments outside a payroll system, such as superannuation contributions that can be required for contractors, directors, and expatriates.
The key details regarding the amnesty are that it:
Unlike other taxes, after the amnesty ends, the Commissioner will not be able to provide any penalty remission below 100 percent – even if the organisation took reasonable care or has a reasonably arguable position.
Over 7,000 employers have already voluntarily disclosed their historical under-payments, and a further 7,000 are expected to come forward during the amnesty. Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume has stated that the total superannuation expected to be paid as a result of the amnesty will be approximately A$230 million.3
The increased media scrutiny on employers combined with the revenue authorities’ real time access to wage information through Single Touch Payroll means it is vital that employers be proactive in fostering their compliance with superannuation and wage payments.
This amnesty provides employers with a one-off opportunity to correct their historical errors.
1 See more information on the legislation (texts, status, debates, reports, etc.).
2 For prior coverage of an earlier superannuation amnesty, see, see GMS Flash Alert 2018-082 (8 June 2018).
3 Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume discussed the expected outcomes of the amnesty during a speech delivered recently to the Conexus Financial Superannuation Chair Forum.
The information contained in this newsletter was submitted by the KPMG International member firm in Australia.
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