Last year’s 24 May announcement of an amnesty for employers who come forward to correct underpayments of their super guarantee obligations has been resurrected in a new bill.
The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 however extends the period of grace that will allow employers who come clean to not have the usual additional penalties applied (the unpaid super will still need to be provided to affected employees). While the originally proposed legislation had the amnesty running from 24 May 2018 to 23 May 2019, the new bill maintains the start date but extends the period it applies to six months after the bill becomes law (if it passes).
To get the benefits of the amnesty, employers must during the period it applies have voluntarily disclosed any superannuation guarantee (SG) underpayments that exist in the past (going as far back to when SG commenced in 1992). For an employer, the tax benefits of the amnesty are to be:
- the administration component of the superannuation guarantee charge (SGC) is not payable (this is a $20 per employee, per quarter, for whom there is an SG shortfall)
- remission of any Part 7 penalty (under Section 62(3) of the SGAA), which can be up to 200% of the SGC
- all catch-up payments made during the 12-month amnesty period are tax deductible.
Assistant treasurer Michael Sukkar said when introducing the bill: “This is a one-off opportunity to set things right, and going forward the ATO has the tools to spot unpaid super.”
Jane Hume, Assistant Minister for Superannuation, Financial Services and Financial Technology, says that employers who don’t take advantage of the amnesty “will face significantly higher penalties when they are subsequently caught”.
Once the amnesty ends, the ATO will have a reduced ability to remit Part 7 penalties. If legislated, the ATO would generally not be able to remit such penalties to less than 100% of the SG charge, except where there is “exceptional circumstances”.