The Senate Economics Legislation Committee has tabled its report on Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 and recommended that it be passed. (Scroll down to take our poll on the SG Amnesty.)
The bill, which was re-introduced earlier this year, amends relevant legislation to provide for a one-off amnesty to encourage employers to self-correct historical superannuation guarantee (SG) non-compliance.
While the originally proposed legislation had the amnesty running from 24 May 2018 to 23 May 2019, which came and went without becoming law largely due to the Federal election, the new bill maintains the start date but extends the period it applies to six months after the bill becomes law (if it passes).
Employers who make disclosures during the amnesty period can claim tax deductions for payments of the SG charge or contributions made to offset an SG charge, and get reduced penalties and fees that may otherwise apply in relation to historical SG non-compliance.
The Senate report noted that it was encouraging that ATO figures show that the superannuation guarantee gap has significantly decreased on previous years to an amount of approximately $2.3 billion. This decrease in the superannuation guarantee gap can be attributed, at least in part, to the more than 7000 employers that have come forward to voluntarily disclose historical unpaid superannuation since the one-off amnesty was first announced.
The bill will limit the Commissioner’s ability to remit penalties for SG non-compliance, if an employer fails to disclose relevant information during the amnesty. 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”.
In a dissenting report, however, Labor Senators recommended that the bill not be passed, calling it “the product of a government that is soft on wage theft”. They noted the bill was unlikely to achieve its aims, and at the same time come at the cost of seemingly rewarding past poor behaviour from employers.