Government plans amnesty for Super Guarantee underpayment

The Government has announced a twelve month amnesty for historical underpayment of Superannuation Guarantee.

The amnesty, which is meant to be a one-off, is included in a Bill put to Parliament – meaning the Bill would have to pass for the amnesty to apply.

“We are introducing this one-off amnesty to allow employers to wipe the slate clean and pay their workers what they’re owed. All Australians workers should be paid the entitlements they are owed,” said a statement by Minister for Revenue and Financial Services, Kelly O’Dwyer.

“The Bill incentivises employers to come forward and do the right thing by their employees by paying any unpaid superannuation in full.”

“Employers will not be off the hook – to use the amnesty they must pay all that is owing to their employees, including the high rate of nominal interest. However, the amnesty will make it easier to secure outstanding employee entitlements, by setting aside the penalties for late payment that are normally paid to the Government by employers.”

“Employers that do not take advantage of the one-off amnesty will face higher penalties when they are subsequently caught – in general, a minimum 50 per cent on top of the SG Charge they owe. In addition, throughout the amnesty period the ATO will still continue its usual enforcement activity against employers for those historical obligations they don’t own up to voluntarily.”

The Super Guarantee amnesty is included in the Treasury Laws Amendment (Superannuation 2018 Measures) Bill 2018. If the Bill passes, the amnesty is intended to apply for the 12 months starting on 24 May – the date the Bill was introduced and the measure first announced.

The Bill also includes other superannuation-related measures – the Super Guarantee change for employees with multiple employers from the 2018 Budget, and changes to the Non-Arm’s Length Income and Limited Recourse Borrowing (LRBA) rules.

Under the Bill the Total Superannuation Balance can include outstanding LRBA balances, in certain circumstances. The Government had for some time wanted to include LRBAs in the Total Super Balance, which was strongly criticised by superannuation and tax professional associations, but appears to have limited this change in the Bill.

The Non-Arm’s Length Income (NALI) changes clarify the treatment of non-arm’s length expenses.

This article has been updated to reflect the LRBA and NALI changes in the Bill.

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