Superannuation Guarantee Amnesty

On 24 May 2018, the Government announced a 12-month Superannuation Guarantee Amnesty (subject to the passage of legislation) that was to be available for the period from 24 May 2018 to 23 May 2019.  This legislation was to provide a once only opportunity for employers to disclose and pay previously undeclared super guarantee (SG) shortfalls without incurring any penalties. However, due to the legislation not passing through parliament prior to the federal election in 2019 it never came into effect.

The government re-introduced SG Amnesty legislation to parliament on the 18 September 2019 as Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019.  Finally this legislation has passed through both Houses of Parliament and is just awaiting Royal Assent.

Since this amnesty was announced more than 7000 employers have come forward and declared outstanding superannuation guarantee shortfall amounts for their employees.  The ATO believes that there are 7000 more still to come forward.

The employers are still liable to pay the full amount of superannuation guarantee owed to their employees plus interest.  But under the Amnesty they will not incur penalties, nor the administration fee of $20 for each quarter that there is a SG shortfall and they can claim a tax deduction for the superannuation, if paid during the amnesty period.

With this re-introduced legislation came some changes to the original amnesty, including the new amnesty period, which still begins on 24 May 2018 and will now end 6 months after the day the bill finally receives Royal Assent. 

Eligibility for the Amnesty

To qualify for the amnesty an employer must:

• voluntarily disclose, in the approved form to the ATO, the amounts of SG shortfall within the amnesty period,
• disclose amounts of SG shortfall that have not previously been disclosed,
• the SG shortfall amounts must have been incurred during the disclosure period of starting on 1 July 1992 and ending 31 March 2018, and
• not be subject to an audit or review by the ATO in relation to that SG shortfall amount for the relevant periods

Payment Options

Where possible an employer should pay the SG shortfall amount and the nominal interest directly to their employees’ superannuation fund.  Where an employer is not able to pay the SG shortfall amount prior to or with the lodgment of the declaration, the ATO may be willing to work out a payment arrangement to allow the employer to pay off the debt over an agreed time period.

Warning

Employers will not be able to benefit from the amnesty for SG shortfall relating to the quarter starting on 1 April 2018 or subsequent quarters, as these are outside of the disclosure period.

Employers with SG shortfalls, who do not take advantage of the one-off amnesty will face higher penalties should they be subsequently caught – the minimum penalty is 100 per cent of the super guarantee that they owe, which will be payable in addition to the SG shortfall.

If you have an SG shortfall and need help with completing the required documentation to comply with the amnesty please contact our office on (08) 9316 7000.

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Potential Seniors Entitlements

We have received a number of enquiries from clients seeking information on whether they qualify for a WA Seniors Card or Commonwealth Seniors Health Care Card and how to apply for them. We have summarised the key points for each entitlement and trust you may find this information useful.

WA Seniors Card – Department of Communities

Seniors Card Holders are entitled to a range of government concessions and discounts of 10% to 50% off the price of goods & services.  The Seniors Card is combined with the Transperth SmartRider card allowing free travel on any Transperth bus, train or ferry at certain times on weekdays, concession fares at other times during the week and free travel all day Saturday, Sunday and public holidays.

The Seniors Card Benefits:

• Free off-peak travel as summarised above
• Entitled to receive a rebate of up to 25% on Water & Local Government Rate charges capped at $100 (50% rebate if you hold a WA Seniors Card and also a Commonwealth Seniors Health Card capped at $600 for Water Service Charges and $750 for Local government rates)
• Entitled to a 50% rebate on Driver’s licence
• A Directory from over 600 businesses is posted to all Seniors Card holders every 2 years and can be sourced online.

To qualify:

• To be eligible you need to be aged 63 years or above, please refer to the table below
• Working less than 25 hours per week of paid employment (averaged over 12 month period)
• Permanent Resident of Australia

The WA Seniors Card is a lifelong card that does not need to be renewed as long as the eligibility criteria are met.

• Application Form is available on the Department of Communities WA Seniors Card Centre website www.seniorscard.wa.gov.au.
• Download the Application Form from the above website or pick up a copy at the WA Seniors Card Centre or at your local Australia Post outlet
• Telephone 6551 8800 or 1800 671 233 (country free call)
• Email: info@seniorscard.wa.gov.au

Commonwealth Seniors Health Card – Department of Human Services

The Commonwealth Seniors Health Care Card is available to self-funded retirees who have reached Age Pension age (currently 66 years or older for both men and women) and who are not eligible to receive the Government Age Pension. This health card is subject to an adjusted taxable income test plus any deemed amount from account-based pensions.  There is no assets test applicable.

If you hold a Seniors Card AND a Seniors Health Card you are entitled to receive:

• Up to a 50% rebate on annual Water and Council rate charges
• Discounts on Pharmaceutical Benefits Scheme (PBS) prescription medicines
• Government provides financial incentives for GPs to bulk-bill concession card holders
• Reduction in the cost of out of hospital medical expenses through Medicare Safety Net
• Concessional travel on Great Southern Rail services (The Ghan, Indian Pacific and The Overland)

To qualify:

• Reached Pension Age – currently 66 years or older.
  • From 1 July 2019 the qualifying age for Age Pension will increase by 6 months every 2 years reaching 67 years by 1 July 2023.
• You do not qualify for the Age Pension or Veteran Affairs benefits
• Australian Resident
• As at 20 September 2019, have an annual adjusted taxable income of less than:
  • $55,808 if you are single
  • $89,290 for couples
  • $111,616 couples separated due to ill health or respite care

Note :

Adjusted Taxable income is the sum of:

• Taxable income as per your personal Australian Taxation Office Notice of Assessment
• Add total net investment loss – eg. rental property and financial investment losses
• Add any foreign income received that wasn’t taxable
• Add the value of any employer provided benefits above $1,000 – eg. Car, Health Ins.
• Add reportable superannuation contributions and reportable fringe benefits
• If you are granted a Commonwealth Seniors Health Card on or after 1 January 2015, deemed income from an Account Based Pension entitlement including income deemed from an Account Based Pension owned by a card holder’s partner who is aged 60 years or more.

Deeming assumes that financials investments are earning a certain rate of income. The deeming rate applicable to an Account Based Pension entitlement from 1 July 2019 is as follows:

• For singles – 1% is applied to the first $51,800 of the Account Based Pension entitlement and anything over $51,800 is deemed to earn 3%
• For couples with at least one receiving an account based pension – 1% will apply to the first $86,200 of the combined value of the Account Based Pensions and 3% over and above $86,200
• For couples with neither receiving a pension, 1% will apply to the first $43,100 of your own and your share of jointly owned financial investments and 3% over and above $43,100

If your investment return is higher than the deemed income, the extra income doesn’t count towards your assessable income. You may be ab le to get a deeming exemption in some cases.

The Deeming rates are updated annually in July. Based on the above rates, if for example you have no other Taxable income, you can qualify for the Commonwealth Seniors card if you’re Account Based Pension entitlement/s are below the following:

• Single – Account Based Pension entitlement of $1,894,800 = deemed income of $55,808
• Couples – Combined Account Based Pension entitlements of $3,033,800 = deemed income of $89,290

There is no asset test applicable to the Commonwealth Seniors Card.

You can apply for a Commonwealth Seniors Health Card if you already have a Centrelink online account or through your myGov account linked to Centrelink. Otherwise print and complete the Claim for a Commonwealth Seniors Health Card form available on the Human Services website www.humanservices.gov.au/customer/forms/sa296

Alternatively please contact our office on (08) 9316 7000 if you need assistance with completing an application or if you are unsure if you qualify.

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