Bill to increase Super Guarantee underpayment penalties passes House

A Bill to increase the penalties for employers not complying with their Super Guarantee obligations could become law by the end of the week.

The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018, which increases penalties for SG non-compliance to include potential jail sentences, among other changes, has passed the House of Representatives.

The Bill also extends Single Touch Payroll – which involves reporting information to the ATO at the same time as payroll – to small employers (under 20 employees). Read more...

Workers with unpaid super “balloons” to almost 3 million

Industry Super Australia has told a Senate committee that more action is needed to address unpaid superannuation, after the number of workers impacted “balloons” to almost 3 million.

An analysis of the most recent ATO data, by Industry Super Australia, finds that 2.98 million workers have been “short-changed” on their Superannuation Guarantee entitlements in 2015/16 – the most recent year for which data has been released. This is up from 2.76 million in 2014/15.

The average super underpayment is $1,995 for each worker. Read more...

Government officially drops Super Guarantee penalty changes

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. Read more...

Small employers to have to use Single Touch Payroll from 1 July 2019

The Government has announced that from 1 July 2019 small employers will have to be using Single Touch Payroll.

Single Touch Payroll will involve reporting salary and wages, PAYG withholding and superannuation guarantee information to the ATO as part of the payroll process. This was to apply to large employers (20 or more employees) from 1 July 2018, with it being optional for small employers (19 or fewer employees).

However Minister for Revenue and Financial Services, Kelly O’Dwyer, has now announced that small employers will have to use Single Touch Payroll from 1 July 2019, as part of an effort to combat Superannuation Guarantee non-compliance. Read more...

ATO estimates extent of Super Guarantee gap for first time

The ATO has, for the first time, given its estimate of the Superannuation Guarantee gap – the amount of Super Guarantee employees are entitled to but not receiving.

The ATO estimates the Super Guarantee (SG) gap to be 5.2% of the $54.78 billion in SG owning in 2014/15, or $2.85 billion. Between 2009/2010 and 2014/15 the net SG gap is calculated to be $14 billion.

“While this analysis shows that 95 per cent of the estimated superannuation guarantee is paid to employees, the gap exists because some employers appear not to be meeting their super guarantee obligations either by not paying enough or not paying it at all,” said ATO Deputy Commissioner James O’Halloran. Read more...

ATO rejects IGT recommendation for random Super Guarantee audits

The ATO has rejected, again, a recommendation by the Inspector-General of Taxation to adopt random Superannuation Guarantee compliance audits.

The Review Into The ATO’s Employer Obligations Compliance Activities report says:

The IGT recommends the ATO seeks further means of ensuring superannuation entitlements are paid promptly including the use of deterrents, such as random audits, to curtail the propagation of non-compliance – compliant employers who undergo such audits should be reimbursed for any additional costs. Read more...

ATO policing of Super Guarantee non-compliance “inadequate”: Senate inquiry

A Senate inquiry has found that the ATO’s approach to Super Guarantee non-compliance is inadequate, and recommended a range of changes to the SG system – including removing the $450 threshold and moving to at least monthly payments.

The Senate Standing Committee on Economics has been conducting an inquiry in Superannuation Guarantee non-payment and has now handed down its final report.

“The negative impacts of non-payment of the SG are pervasive and affect several distinct groups: namely employees, employers and the government,” says the report. Read more...

ATO needs more funding to audit businesses not paying Super Guarantee: ASFA

The ATO should receive more funding in order to better audit businesses for unpaid Superannuation Guarantee, says the Association of Superannuation Funds of Australia (ASFA).

ASFA CEO Dr Martin Fahy said that recent reports showed there was “substantial” non-payment of, what should be, compulsory superannuation entitlements.

“Non-payment of super is increasing in Australia with at least 690,000 or 6.5 per cent of the workforce affected annually,” he said.

Audits by the ATO’s superannuation and small business departments have a greater than 70% success rate in identifying unpaid super obligations, according to the Australian National Audit Office. Read more...

Close super guarantee salary sacrifice ‘loophole’, Senate inquiry told

A Senate inquiry has been told that a ‘loophole’ which allows salary sacrifice contributions to be counted against Superannuation Guarantee (SG) obligations should be closed.

The Senate has been conducting an inquiry into Super Guarantee non-payment. Several of the submissions to the inquiry have called for this, so-called, loophole to be closed, including a joint submission by Industry Super Australia and Cbus.

“Currently, if an employee makes voluntary contributions, a loophole allows their employer to count this towards SG obligations,” said the submission, calling for it to be closed “immediately” by the Government. Read more...

SG underpayment costing workers near retirement tens of thousands

Workers nearing retirement who don’t receive their full superannuation entitlements could be tens of thousands of dollars worse off, according to Industry Super Australia.

“Using the latest ATO data from 2013-14, the research found that people aged 60 to 64 on salaries ranging from $50,000 to $75,000 who weren’t correctly paid their SG that year, had overall super balances that were $35,089 or almost 40 percent less than those who were,” said ISA.

Industry Super Australia (ISA) released the research the same day as the first public hearing by the Senate inquiry into Super Guarantee non-payment. Read more...