The Bill to close the ‘loophole’ allowing employers to use employee Salary Sacrifice contributions to offset their Super Guarantee obligations has passed the Parliament.
The Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019 has passed the Parliament, after the Government agreed to amendments made in the Senate.
The Bill passed the Senate last week, but it was amended and so had to return to the House of Representatives. The amendments largely related to changes allowing the ATO to disclose business tax debts, but a Labor amendment also brought forward the implementation date of the Salary Sacrifice changes – from 1 July 2020 to 1 January 2020.
The July 2020 start date had been criticised as legalising wage theft by the Institute of Public Accountants, which recommended it apply from 1 July 2019. Though an inquiry into the Bill heard there were issues with the administration and retrospectivity of an earlier start date.
Under the superannuation changes employers won’t be able to count the Salary Sacrifice contributions of their staff against their own Super Guarantee obligations – which leaves the employee worse off.
Though often referred to as a ‘loophole’, the ability of employers to do this was acknowledged in a 2006 ruling by the ATO.
The Government announced this change in 2017, but it languished in the Senate as it included in a Bill with controversial changes to super choice.
Labor Shadow Assistant Treasurer and Shadow Minister for Financial Services, Stephen Jones, said Labor’s amendments would “ensure that a loophole allowing employers to legally steal superannuation entitlements from workers would be closed by 1 January 2020 – a full six months ahead of the Government’s original schedule”.
The Institute of Public Accountants (IPA) commended the Government on the passage of the Bill.
“The IPA advocated for the measure to be brought forward from its proposed date of 1 July 2020, to the start of this financial year namely 1 July 2019.”
“Employers have had enough warning of the Government’s intention to stop this unscrupulous behaviour. We are pleased that the Senate agreed with our position and recommended the measure to be brought forward to 1 January 2020.”
Status superannuation legislation
Status of current major superannuation Bills
- Treasury Laws Amendment (Your Future, Your Super) Bill 2021
- Assent 22/06/2021
- Various changes, including ‘stapling’ new employees to super funds, annual performance tests of MySuper products and other super products by APRA, and create best financial interests duty test.
- Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020
- Assent 22 June 2021
- Increase maximum number of SMSF members from 4 to 6
- Treasury Laws Amendment (More Flexible Superannuation) Bill 2020
- Assent 22 June 2021
- Allow people aged 65 or 66 to use the three-year non-concessional contributions bring-forward rule.
- Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020Assent 22 March 2021
- Transfer superannuation held by Eligible Rollover Funds (ERFs) to the ATO, and close ERFs by 30 June 2021.
Last updated: 23/06/2021
Passed superannuation legislation
Passed major superannuation legislation
Superannuation-related legislation that has passed the Parliament.
- Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019
- Assent – 03/09/2020
- Expansion of super choice to new enterprise agreements and workplace determinations
- Treasury Laws Amendment (2019 Measures No. 3) Bill 2019
- Assent – 22/06/2020
- Deferring education and training standards for existing financial advisers, minor and technical superannuation tax changes
- Superannuation Supervisory Levy Imposition Amendment Bill 2020
- Assent – 19/06/2020
- One of several Bills making changes to the financial institution supervisory levy framework
- Treasury Laws Amendment (2020 Measures No. 1) Bill 2020
- Assent – 25/05/2020
- Permanent tax relief for super fund mergers
- Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019
- Assent – 06/03/2020
- Super Guarantee amnesty for employers
- Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019
- Assent – 28/10/2019
- Salary Sacrifice integrity, other tax changes
- Treasury Laws Amendment (2018 Superannuation Measures No. 1) Act 2019
- Assent – 02/10/2019
- Super Guarantee opt-out for high income earners, Non-arm’s length expenses, LRBA in Total Super Balance
- Treasury Laws Amendment (Putting Members’ Interests First) Act 2019
- Assent – 02/10/2019
- Opt-in changes to insurance in super for new young members and balances under $6,000
Last updated: 08/12/20