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NEW COMPLIANCE MEASURES FOR SUPERANNUATION GUARANTEE PAYMENTS

Saturday, 23 September 2017

The Government has announced a series of changes affecting Superannuation Guarantee payments which it says will increase compliance by employers’ with their SG payment obligations.

Minister for Revenue and Financial Services Kelly O’Dwyer said the measures would give the Australian Tax Office “near real-time visibility over superannuation guarantee compliance by employers.”

The changes include measures to:
• Require superannuation funds to report contributions received more frequently, at least monthly, to the ATO. This will enable the ATO to identify non-compliance and take prompt action;
• Improve the effectiveness of the ATO’s recovery powers, including strengthening director penalty notices and use of security bonds for high-risk employers, to ensure that unpaid superannuation is better collected by the ATO and paid to employees’ super accounts; and
• Give the ATO the ability to seek court-ordered penalties in the most egregious cases of non-payment, including employers who are repeatedly caught but fail to pay superannuation guarantee liabilities.

The package requires legislation to be implemented. However passage of the legislation is not guaranteed with industry superannuation funds mounting a campaign arguing the changes are designed to steer employees’ SG payments towards retail superannuation funds at the expense of industry funds. The Australian Tax Office issued a statement rejecting Industry Super’s claims

SmartCompany reported that head of policy at CPA Australia Paul Drum said the reforms looked as though they are striking a good balance to protect workers, but that “additional reporting should increase compliance costs for [super] funds”.

The changes particularly target smaller businesses. The reform package is a response to a report from a cross-agency investigation into superannuation non-compliance released in January this year. Drawing on data from a range of government agencies, the investigation found 97% of reports of unpaid super made to the ATO are about small business employers. The report signalled authorities should be focused on those employers as well as those who employ themselves within incorporated businesses, who may not realise that by keeping money in their businesses instead of paying themselves the superannuation guarantee, they are not complying with the law.

The minister said “The Government will provide the ATO with additional funding for a Superannuation Guarantee Taskforce to crackdown on employer non-compliance. The package builds on legislation already announced to close a legal loophole used by unscrupulous employers to short-change employees who make salary-sacrifice contributions to their superannuation.

“Employers who deliberately do not pay their workers’ superannuation entitlements are robbing their workers of their wages. This is illegal and won’t be tolerated,” Minister O’Dwyer said.

 

Further information

Ministerial media release: Turnbull Government backs workers on superannuation

SmartCompany.com.au: ATO to get stronger powers to crack down on unpaid superannuation: Here’s what it means for your business

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