Super Guarantee Amnesty
Employers who are behind in paying compulsory Super Guarantee (SG) contributions to staff have until 7 September 2020 to come forward and take advantage of an amnesty currently being offered by the Federal Government.
This SG amnesty is a one-off opportunity for employers to disclose and pay unpaid SG including interest, that they owe for their employees.
Employers that take advantage of the amnesty can claim tax deductions as part of the process and will not incur administration charges or penalties. Flexible payment plans can also be arranged.
However, interest will need to be paid on the amnesty contributions paid to employees’ super fund accounts.
The Australian Taxation Office (ATO), which is administering the amnesty, has advised that the costs to businesses which choose not to come forward and take advantage of this “one-off” amnesty opportunity will be “significant”. 1
The ATO has also advised that: “After the amnesty ends our ability to remit penalties applied as a result of an audit is limited by law [as contained in the Treasury Laws Amendment (Recovering Unpaid Superannuation) Act 2020]. This means shortfalls will have a minimum penalty of 100 per cent applied but can be as much as 200 per cent.”1
SG shortfalls for any quarter between 1 July 1992 and 31 March 2018 may be eligible for the amnesty if they have not previously been disclosed or are not subject to a current or previous audit.
To benefit from the amnesty, employers must lodge one approved SG amnesty form for each quarter and complete a declaration form confirming application for the amnesty by 11.59pm deadline on 7 September 2020.
When the SG amnesty was originally announced in May 2018 (with an initial deadline of 23 May 2019, now extended to 7 September 2020) many businesses lodged a super guarantee charge statement disclosing SG shortfalls, with administration charges of $20 per employee per quarter. If already paid, those businesses will be refunded their administration charges under the amnesty if they meet the amnesty criteria.
In a media release on 18 September 2019, the Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume said: “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.”2
The ATO has further advised that while it acknowledges the impact of COVID-19 and the 2019–20 bushfires, the law does not currently allow for variations to the amnesty deadline date.