One Off Super Guarantee Amnesty

Employers that have fallen behind with their superannuation guarantee (SG) obligations will have 12 months to “self-correct” under a new amnesty announced late last month.

Subject to the passage of legislation, the Amnesty will be available from 24 May 2018 to 23 May 2019.

Employers who voluntarily disclose previously undeclared SG shortfalls during the Amnesty and before the commencement of an audit of their SG will:

  • not be liable for the administration component and penalties that may otherwise apply to late SG payments
  • be able to claim a deduction for catch-up payments made in the 12-month period.

Employers will still be required to pay all employee entitlements. This includes the unpaid SG amounts owed to employees and the nominal interest, as well as any associated general interest charge (GIC).

Qualifying for the amnesty

The amnesty applies to employers that have underpaid or not paid SG for any period from 1 July 1992 up to 31 March 2018.

Accessing the Amnesty is a simple process. If you are able to pay the full SG shortfall amount directly to your employees’ super fund or (funds), then complete a payment form and submit it to us electronically through the business portal.

If you are unable to pay the full SG shortfall amount directly to your employees’ super fund or (funds), then complete and lodge a payment form and the ATO will contact you to arrange a payment plan.

The amnesty only applies to “voluntary” disclosures. The ATO will continue its compliance activities during the amnesty period so if they discover the underpayment first, full penalties apply. The amnesty also does not apply to amounts that have already been identified as owing or where the employer is subject to an ATO audit.

Benefits of the Amnesty

Benefits of the Amnesty include:

    • the administration component of the super guarantee charge (SGC) is not payable
    • Part 7 penalty will not be applied
    • all catch-up payments made during the 12-month Amnesty period will be tax-deductible.

Administration component

The administration component of $20 per employee per period is not payable in respect of SG shortfalls for new employees who have only been included because of a disclosure under the Amnesty.

Deductibility

For catch-up payments to be tax-deductible, they must be made to a super fund or the ATO during the Amnesty period.

If you have a payment plan with the ATO that extends past 23 May 2019, only those payments made between 24 May 2018 and 23 May 2019 will be deductible. 

Contractors

If your business has engaged any contractors during the period covered by the amnesty, then the arrangements will need to be reviewed as it is common for workers to be classified as employees under the SG provisions even if the parties have agreed that the worker should be treated as a contractor. You cannot contract out of SG obligations.

Where to from here?

Legislation enabling the amnesty is currently before Parliament and is not expected to become law until later this month.

If your business has fallen behind on its SG obligations and is eligible for the amnesty, please contact one of our team. There are several calculations that need to be completed and these may take some time to complete. For more information on our superannuation services, contact us.

Speak to a specialist

Are you looking for more information? Talk to one of our specialists today.