Superannuation Guarantee Amnesty – what does it mean for business?
The new superannuation Guarantee Amnesty, what does it mean for business?
Earlier this year the Australian government announced a temporary waiver on all penalties and administration fee’s regarding the overdue payments of employee’s superannuation. This amnesty, which commenced on the 24th of May this year and finishes on the 23rd of May 2019, is an initiation by the government to encourage the repayment of employees unpaid super. This amnesty covers all unpaid super from 1 July 1992 to the 31st March 2018 and is the latest move by the government to tackle the issue of lost superannuation.
An employer is eligible for this amnesty under the following situations:
- Voluntary disclosure of misconduct
- No previously disclosure of this information to the ATO prior to the date of the 24th of May
- Successfully makes the repayments to the employee within the amnesty period
What are the benefits for the employer?
Assuming the employer is eligible for the amnesty the government will waiver
- The administration fees
- The Part 7 Penalty for failing to comply with the law
- Superannuation payments made between 2018-2019 will also be tax deductible
What are the amnesty benefits to employee?
- Employees will receive the short fall amount of their superannuation from their employers as well as the amount of its nominal interest.
Failure to pay:
An employer will not be eligible for this amnesty if the following occurs:
- They fail to pay the superannuation
- Does not enter into a payment plan
- Failure to comply with policies of their repayment plans
It is estimated that the revenue gained from this amnesty will provide an additional revenue of 48 million dollars to the government. The ATO has similarly made sure that there will be no second chances for employers after the end date of the waiver in 2019. The information provided during this process will also enable the ATO in the future to efficiently identify noncompliance and flag businesses with a history of negligence. Although the amnesty is optional the government has made it clear that there will be hefty costs to employers if they don’t pay.
This bill has exciting implications for a range of individuals and businesses. Companies now have the potential to save thousands of dollars during this amnesty, meaning their finances can be redirected into a range of other avenues of investment. Employers will also benefit through their superannuation gains and will be able to feel more secure and successful for the future.
If you have any questions or inquiries regarding this amnesty please contact us on Ph: (02) 8325 1520.