The Government has officially dropped its proposed winding-back of penalties for underpayment and late payment of Superannuation Guarantee, while announcing other measures to tackle SG non-compliance.
The Government had intended to “simplify” and make the SG charge and penalties “more proportionate” to non-compliance. This included changing the calculation of the SG Charge from total salary and wages to the less-encompassing Ordinary Time Earnings, reducing the time over which interest was charged and changes to the SG charge penalty.
These changes were included in a Bill before the Parliament, but before it reached a vote in the House of Representatives, in 2016, the Government amended it to remove the Super Guarantee changes.
The Government has now officially dropped the changes as policy, in the 2017/18 Mid-Year Economic and Fiscal Outlook.
The Government intends to close the so-called loophole which allows employers to claim salary sacrificed contributions against Super Guarantee obligations. However this measure is contained in a Bill seemingly stalled in the Senate, as it also includes changes to super fund choice rules.
MYEFO says the Government will strengthen the penalty regime around Super Guarantee, including allowing the ATO to be able to direct employers to pay an outstanding SG liability and undertake education and training. Additionally disclosure provisions will be amended to allow the ATO to keep employees informed abut possible failures by employers to pay SG.
Also includes in MYEFO is $20.9 million for the ATO to establish a taskforce aimed at Super Guarantee non-compliance, in part using the information from Single Touch Payroll. A further $7.5 million is allocated for the ATO to improve processes in recovering unpaid Super Guarantee.