The Government has done a 180-degree turn on penalties for employers who don’t pay the required amounts of Superannuation Guarantee on time, going from winding back penalties to increasing them – including prison time.
The Government has introduced to Parliament a Bill to increase the penalties for Super Guarantee non-compliance, the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018. It was only in December that the Government officially dropped its policy of winding back some of the penalties for underpayment of Super Guarantee.
“After the inaction of the previous Labor Government, where Bill Shorten and Chris Bowen were responsible for superannuation, it has taken a Liberal Government to protect members’ money,” said Minister for Revenue and Financial Services Kelly O’Dwyer.
“It is not acceptable for employers to cheat staff out of their superannuation entitlements. To combat this I introduced legislation today that will allow the Australian Taxation Office to increase penalties on unscrupulous employers.”
“The Bill will protect workers’ superannuation entitlements by modernising the enforcement of the superannuation guarantee.”
“This Bill introduces very serious consequences for employers who break the law by short changing their employees. The ATO will have access to new enforcement and collection provisions, including strengthened arrangements for director penalty notices.”
If the Bill passes, employers who don’t obey a direction to pay their Super Guarantee liabilities could face up to 12 months in prison.
The Bill also extends Single Touch Payroll requirements to small employers (19 and fewer employees) from 1 July 2019.
Additionally, the Bill would allow Transition to Retirement Income Streams to be paid at death to eligible dependants without having to be commuted and a new pension started. “Administrative processes will be simplified for bereaved beneficiaries at the time of a member’s death,” said Minister O’Dwyer.
Minister O’Dwyer said that the “Government already has legislation before Parliament to close a loophole, to stop unscrupulous employers short changing superannuation contributions for employees who use salary sacrifice arrangements”. However this measure is included in the same Bill as the changes to super fund choice – which appears to lack sufficient support in the Senate. This was one of the superannuation Bills on which the Government pulled the vote late last year. At the time Minister O’Dwyer said the Bills were “certainly not dead”.