Legislation to create an amnesty for employers not paying Super Guarantee has returned to Parliament.
The Government has, for some time, wanted to give employers who have underpaid their Super Guarantee obligations a time-limited amnesty – requiring them to pay the unpaid super for their workers, but not applying several of the usual additional penalties.
Legislation to create this Super Guarantee amnesty has, again, been introduced to Parliament – the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019.
Last year the Government announced a 12 month amnesty for employers who hadn’t paid their Super Guarantee obligations for their employees. This amnesty was meant to run from 24 May 2018 – but the Government failed to pass the legislation before the 12 months was up. The Government went quiet over the amnesty ahead of the election, and the amnesty was not listed among the Liberal Party’s retirement and superannuation policies.
The new amnesty is intended to run for longer – from 24 May 2018 until 6 months after the day the Bill receives Royal Assent, if it passes.
The new Bill contrasts with other legislation passed by the Government earlier in 2019, which allows for jail sentences for employers who haven’t paid superannuation.
Jane Hume, Assistant Minister for Superannuation, Financial Services and Financial Technology, said the Government “is taking action to help hardworking Australians receive the superannuation they have earned”.
“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 still pay all that is owing to their employees, including interest. However, the amnesty will encourage employers to come forward and pay outstanding superannuation, by not hitting them with the penalties usually associated with late payment.”
Under the amnesty, employers will have to pay the unpaid superannuation, but payments of SG change will be deductible (SG charge and contributions offset against it are usually not deductible), and employers won’t have to pay a Part 7 penalty or the $20 per employee admin charge.
Hume said that employers who don’t take advantage of the amnesty “will face significantly higher penalties when they are subsequently caught”.
Once the amnesty ends, the ATO will have a reduced ability to remit Part 7 penalties. Currently the ATO can remit all or part of the Part 7 penalties. If legislated, the ATO would generally not be able to remit such penalties to less than 100% of the SG charge, except where there is “exceptional circumstances”.
The ATO used this discretion to reduce the Part 7 penalties for employers who came forward after the original amnesty was announced but not passed before the 12 months was up.
Hume said that over 7,000 employers have voluntarily disclosed historical unpaid superannuation since the amnesty was originally announced.
“The ATO estimates an additional 7,000 employers will come forward due to the extension of the amnesty. This means around $160 million of superannuation will be paid to employees who would otherwise have missed out.”
“This is a practical measure that is all about reuniting hardworking Australians with their super. My message to employers who owe super is: come forward now. Do not delay. This is a one-off opportunity to set things right, and going forward the ATO has the tools to spot unpaid super,” said Hume.
The ATO says that “until the proposed amnesty law is enacted by Parliament, we will continue to apply the existing law to the SGC statements you lodge with us”.
The amnesty legislation was introduced to the House of Representatives, a second reading moved, and debate adjourned to a later date – as is standard practice.
Amnesty for “theft” of superannuation: ACTU
The ACTU says the reintroduced Bill provides for the “theft of superannuation since the first day of the superannuation system”.
The ACTU calculates that the amnesty is only expected to recover 3% of unpaid, “stolen”, super from a single year – pointing to previous Government claims that $200 million will be recovered under the amnesty, and Industry Super Australia’s estimate that $5.9 billion in super isn’t paid each year.
“Superannuation is a basic workplace right and we know that theft of super is systemic. Choosing to let employers off the hook rather than increase penalties and enforcement for this massive theft shows what side of this issue the Morrison Government is on.”
ACTU Assistant Secretary Scott Connolly said the amnesty is a “farce set up by a government obsessed with helping business find new ways to exploit workers”.
“All workers should have an easily accessible mechanism to enforce unpaid wages and entitlements, including super.”
“If the Morrison Government was serious about ending theft of superannuation it would increase enforcement, penalties, and allow unions back into workplaces to inspect pay records and to initiate recovery action against employers.”
Super Guarantee amnesty a “disappointing move”: AIST
The Australian Institute of Superannuation Trustees (AIST) has called the re-introduction of a Bill for the Super Guarantee amnesty a “disappointing move”.
AIST says it has “consistently opposed the amnesty as it creates an unlevel playing field, effectively rewarding bad behaviour by employers at the expense of employers that do the right thing”.
“Employers should always be required to make SG contributions for their employees, and non-compliant employers should not be given a get out of jail free card.”