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Superannuation Guarantee Amnesty: Repent now and access a one time only deduction.

Article By Tejal Nadkarni | | Accounting & Tax

As the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 has been passed by both Houses and has now received Royal Assent, employers have a limited window of opportunity to set things right.

The Superannuation Guarantee (SG) amnesty offers a one-off opportunity for employers to correct historical SG non-compliance for the period 1 July 1992 to 31 March 2018. The amnesty is unavailable from 1 April 2018 onwards as the amnesty period started on 24 May 2018 (during the June 2018 quarter) and is only aimed at historical non-compliance. The amnesty ends at 11:59 PM on 7 September 2020; 6 months after the Bill received Royal Assent. 

Beneficial treatment available under the amnesty

Employers who have a SG shortfall for a quarter that qualifies for the amnesty: 

  • can claim deductions for payments made in relation to SG charge and contributions that offset the charge (relating to the SG shortfall). However, to be deductible, the payments must be made during the amnesty period;
  • do not have any additional administrative components ($20 per employee per quarter);
  • are not liable for any Part 7 penalties (up to 200% of the charge payable)

Requirements for employers to qualify for the amnesty 

An employer qualifies for the beneficial treatment provided by the amnesty if: 

  • during the amnesty period, there is a first time disclosure by the employer to the Commissioner (in the approved form) relating to the amount of SG shortfall; and
  • the Commissioner has not, at any time before the disclosure, informed the employer that he is examining (or intends to examine), the employer’s SG compliance for the quarter (e.g. by way of review, audit, verification check, record keeping review/ audit and other similar activities); and
  • the employer has not been disqualified from the beneficial treatment under the amnesty. 

According to Assistant Minister Hume, “Since the one-off amnesty was announced, over 7,000 employers have come forward to voluntarily disclose historical unpaid super. 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”.

We believe that the amnesty is a clear precursor to the ATO ramping up their SG compliance activities, with errant employers suffering substantial penalties, including jail time. With the introduction of SuperStream and Single Touch Payroll, the ATO has a wealth of information available to be able to identify SG non-compliance. We recommend that all employers review their systems to ensure that they have met their SG requirements.

If you would like further information on how to take advantage of the amnesty or if you would like to undertake a review of your SG contributions and your systems in place, please contact your Altitude Adviser today.