On 11 November 2019 (or thereabouts), the Senate Economic Legislation Committee has released its report, into the Bill that will establish the Government’s Super Guarantee (SG) amnesty – the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019. As at the time of writing (24.11.19) the Bill has only been read a second time, in the House of Representatives (on 18.9.19).

See below  for a summary of the Report and the Minority Report.

[Tax Month – November 2019]

 


The SG amnesty is proposed to run until 6 months after the day the Bill receives assent. It will apply to SG shortfalls as far back as 1 July 1992, and up until the quarter starting on 1 January 2018. Under the amnesty, employers would be able to self-correct SG underpayments without incurring additional penalties that would normally apply. Employers would also be allowed to deduct SG charge payments or contributions made during the amnesty period (the SG charge is otherwise non-deductible).

The majority of the Committee recommended that the Bill be passed but called for the ATO to develop a communication strategy to maximise employer engagement. The report said the amnesty will leave no workers worse off and will result in more individuals receiving their SG entitlements. More than 7,000 employers have voluntarily disclosed historical unpaid SG since the amnesty was announced. It is projected to recover over $230m in unpaid SG for employees.

In a dissenting report, the Labor Senators rejected the Bill on the grounds that its sends the wrong the message that “wage theft” is acceptable, and could create an expectation that “future non-compliance will also be overlooked”. The Labor Senators also expressed concern that the amnesty may not bring to light all instances of non-compliance, as employers are not compelled to keep records beyond 5 years.

 

The text in the Bill will include the following substantive provision in the SG (Administration) Act:

74   Amnesty in relation to historic amounts of superannuation guarantee shortfall

Qualifying for the amnesty

(1)  An employer qualifies for an amnesty for the employer’s superannuation guarantee shortfall for a quarter if:

(a)  during the period (the amnesty period) provided by subsection (3), the employer discloses to the Commissioner, in the approved form, information that:

(i)  relates to the amount of the employer’s superannuation guarantee shortfall for the quarter; and

(ii)  was not disclosed to the Commissioner before the amnesty period; and

(b)   the amnesty period started after the end of the period of 28 days after the end of the quarter; and

(c)   the Commissioner has not, at any time before the disclosure, informed the employer that the Commissioner is examining, or intends to examine, the employer’s compliance with an obligation to pay the superannuation guarantee charge for the quarter.

(2)   However, if the employer would have a superannuation guarantee shortfall for the quarter even if the information in the disclosure were not taken into account, the employer qualifies for an amnesty for the shortfall only to the extent of the increase in the shortfall as a result of taking the information into account.

 

[LTN 217, 11/11/19]

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