Employers should be required to report and pay Superannuation Guarantee at the same time as salary and wages, says the Australian Institute of Superannuation Trustees (AIST).
The Government recently announced that Single Touch Payroll, which involves reporting SG and PAYGW to the ATO when wages are paid, will be compulsory for employers with 19 or fewer employees from 1 July 2019. In addition super funds will have to report contributions to the ATO at least monthly.
AIST supports the measure, but is also calling for employers to be required to pay superannuation contributions at least monthly, and preferably at the same time as wages. AIST also wants payslips to show the amount of super actually paid, not just accrued.
“Disappointingly, the package lacks this key reform,” said AIST CEO Eva Scheerlinck.
“Improved payslip reporting would help employees keep better track of their super payments by providing them with the ability to check that their super has actually been paid into their fund. We believe this measure would have a significant impact for members. We will work with the Government to bolster the efficacy of the package in this way.”
Legislation was passed by the last Labor government to require employers to report the amount of super accrued on payslips, however the regulations to implement this weren’t made. The measure was repealed by the incoming Liberal government in 2015.
The requirement for superannuation funds to report contributions to the ATO at least monthly has also been criticised. The Tax Institute said the changes could create an “unacceptable onerous” compliance burden on superannuation funds, in particular smaller funds.
“Imposing a monthly reporting requirement on all superannuation funds may be an overly onerous compliance burden,” said the Tax Institute’s Senior Tax Counsel Professor Robert Deutsch.
“Consideration should be given to providing some flexibility for smaller funds to report super guarantee contributions quarterly as they are less likely to have systems in place to cope with the increased compliance burden than a large fund,” he said.
The Tax Institute also questioned if the ATO has the resources to effectively deal with the influx of superannuation data.
“While it is all well and good that the ATO is given super guarantee data in a timely manner, the benefits will only arise if the ATO can and does put the data to good use,” said Professor Deutsch.
“We query whether this initiative will actually force non-complying employers to comply with their super guarantee obligations. We fear it may simply impose further obligations on already compliant funds.”
Asked about these on concerns on 2GB Kelly O’Dwyer, Minister for Revenue and Financial Services, said the Government was making sure to give the ATO the “appropriate resources” for enforcement, in addition to the superannuation taskforce.