Superannuation Guarantee Amnesty
Posted on 27th February 2020 by Ashley Dawson
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
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.
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.