The Australian Taxation Office estimates that in 2014-2015 alone, employers failed to pay $2.85 billion in super earnt by workers, or about 5% of the full amount of super payable. To rectify this, the Federal Government has proposed a 12-month super amnesty for employers, removing fines for non-payment.
Not liable for any penalties
While the amnesty requires legislation to pass the parliament, the ATO notes that it would apply retroactively, and runs from 24 May 2018 to 23 May 2019. During this period, any employer who voluntarily discloses unpaid super guarantee amounts will not have to pay the administration costs on late super payments, and they will not be liable for penalties that apply to late payments. Further, they will be eligible to claim a deduction for payments made to rectify their shortfall during the amnesty.
This doesn’t allow employers to skip out on paying what is owed, they will have to pay the full super guarantee amount owing, plus interest and the applicable General Interest Charge. However, the proposed amnesty would make it cheaper for employers to catch up to what they owe and avoid the negative consequences for non-payment. The ATO has also indicated that future penalties for employer who owe super but don’t use the amnesty may be higher.
Legislation still required
The amnesty would cover all unpaid super from 1 July 1992 to 31 March 2018, but not any missed payments from 1 April 2018 onwards. Employers who are unable to pay what they owe in a single payment should contact the ATO for help with a payment plan. Employers already subject to an audit are generally ineligible for the amnesty.
However, for the deductibility of payments and the removal of administration fees to be implemented, the government first needs to pass legislation through parliament. At the time of writing, the bill had passed the lower house without amendment. It now needs to pass a vote in the Senate to become law.
The proposed legislation has the potential to strengthen the powers of the ATO, allowing them to seek court-ordered penalties for non-payment of super, require super funds to report contributions to the ATO more frequently and give them more tools to secure the recovery of unpaid super.