PROPOSED Employer Superannuation Guarantee Amnesty
The government announced in May 2018 the commencement of a one-off 12-month Superannuation Guarantee Amnesty for employers (available from 24 May 2018 to 23 May 2019). This will be an opportunity for employers to self-correct past super guarantee (SG) non-compliance without penalty.
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, and
- 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 Super amounts owed to employees and the nominal interest, as well as any associated general interest charge (GIC).
The Amnesty applies to previously undeclared SG shortfalls for any period from 1 July 1992 up to 31 March 2018.
The legislation is yet to be passed by Parliament, but if it gets the green light, represents a big win for business with outstanding SG obligations. Currently any payment of SG after the due date for payment is disallowed as a tax deduction (meaning a higher overall cost to the business).
It is important to note that employers who are not up to date with the SG payment obligations and who don’t come forward during the Amnesty period may face higher penalties in the future. We anticipate that following the Amnesty period there will be increased audit activity by the ATO in this area of non-compliance.