by John Jeffreys
Tax & Super Australia (TSA) believes the SG Amnesty would have likely returned even more retirement savings to Australians if it was extended to operate beyond the most intense period of the coronavirus pandemic.
Assistant Minister for Superannuation Jane Hume has been reported in the media as saying the amnesty resulted in 24,000 employers coming forward, with about $588 billion paid into nearly 400,000 accounts.
Yet TSA believes the unfortunate timing of the amnesty operating during the coronavirus pandemic means there are likely employers who would have come forward but didn’t because their businesses became strapped for cash.
The amnesty started on 7 March – right at the point when increasing cases of coronavirus were starting to cause real concern in Australia. Just a week later, the first stages of shutdowns, which focused on large events and mass gatherings, began. On 20 March, as parts of the country started going into further shutdowns, this organisation called for the amnesty to be extended (see our media release here).
TSA was concerned that many employers at the time, including those in the hospitality industry, who have outstanding SG obligations may be too overwhelmed, or simply unable, to manage the amnesty process.
The reasons for this were twofold. First, someone from the business would have had to calculate and determine the shortfalls for what could be a number of years, possibly as far back as 1992. Many businesses would have needed to work with an accountant and BAS agent for this and pay relevant fees for this service.
Secondly, the employer had to find the money to make the payment to the ATO. Yet given that some businesses, especially those in Melbourne, spent a significant part of the year unable to fully operate, finding this cash could have been near impossible for some businesses.
There’s potentially a number of employers and businesses that might have taken advantage of the amnesty but didn’t, because they saw their cash levels plummet and had limited ability to operate for most of the year. This is despite relief from Federal and state governments.
As it stands, it is very likely that there is a lot of unpaid super still owing to employees. And from now, by law, if an employer does decide to re-pay this super, they will face penalties of a minimum of 100% and up to a maximum of 200% on the amount.