On Wednesday, the government introduced Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 into Parliament, picking off from the previously lapsed bill that had sought to introduce the superannuation guarantee (SG) amnesty.
It provides a one-off amnesty to encourage employers to self-correct historical SG non-compliance dating from 1 July 1992 to the quarter starting on 1 January 2018.
It will allow employers to claim tax deductions for payments of SG charge or contributions made during the amnesty period to offset SG charge, as well as remove the administrative component and the Part 7 penalty that may otherwise apply in relation to historical SG non-compliance.
Should the bill pass without amendments, the amnesty period will start from 24 May 2018 and end six months from the date it receives royal assent.
Speaking to My Business sister publication Accountants Daily, Knowledge Shop tax director Michael Carruthers said that while the introduction of the bill would be welcomed by employees who have missed out on entitlements in the past, the six-month time frame might prove to be too short for employers.
“Six months isn’t a great deal of time, and given the mess that occurred last time, it might be one of those things that people wait and see for it to be implemented before they start acting on it,” Mr Carruthers said.
“If and when it occurs, six months will go by very quickly, especially because super guarantee issues are not necessarily simple and potential scenarios might need additional time to be sorted out.
“It is not just the notification that you need to be careful of; it is also when you actually pay the amount that owe, and if you aren’t careful with when and how you pay the amount, the ATO can also take away the benefits of the amnesty away from you.”
Higher penalties after amnesty ends
The new bill will also impose minimum penalties on employers who fail to come forward during the amnesty period by limiting the commissioner’s ability to remit penalties below 100 per cent of the amount of SG charge payable.
“It seems like that particular change is limited in that it only seems to apply to quarters that would otherwise qualify for the amnesty, so that wouldn’t necessarily apply to every SG problem moving forward; it seems like it is specifically aimed at quarters that could have been fixed under the amnesty,” Mr Carruthers added.
The SG amnesty was previously announced by then Minister for Revenue and Financial Services Kelly O’Dwyer on 24 May 2018, but it failed to go through before the federal election was called.
The hold-up of the previous version of the SG amnesty had previously caused confusion in the industry, with the ATO revealing that it had seen a “10 to 15 per cent” increase in employers coming clean, and had waived the Part 7 penalty for them, despite the bill failing to be passed.
In April this year, the ATO revealed that 19,000 employers had come forward to admit they hadn’t met their SG obligations in full, with micro businesses accounting for around three-quarters of those.