More rules and regulatory changes are on the horizon for business owners as the government seeks to close loopholes in the employee Superannuation Guarantee.
Minister for Revenue and Financial Services Kelly O’Dwyer said the government is planning to introduce a bill this year that will tighten the rules on salary sacrificing contributions made by employees, which could be used by “unscrupulous employers” to shortchange their workers.
“If Australians are to continue to have confidence in the integrity of the superannuation system, we must ensure employers are paying workers their full entitlements, whether they are wages or superannuation,” she said in a statement.
Ms O’Dwyer also said the government is considering recommendations made in the Superannuation Guarantee Non-Compliance report, which was produced as part of a working group exploring the issue of employer non-compliance of superannuation rules.
However, Ms O’Dwyer’s announcement was given a lukewarm reception by Industry Super Australia, whose public affairs director Matt Linden said the move would “only help one [in] 10 affected by unpaid superannuation”.
“Every month that passes without a comprehensive solution to unpaid super, millions of Australians are being shortchanged on their retirement savings,” he said.
The shortfall in compulsory superannuation payments is conservatively estimated at $5.6 billion, affecting around a third of the nation’s workforce.
“The report today shows the ATO, which has primary responsibility for policing unpaid super, still hasn’t come to grips with the problem despite having the best data available to identify individual taxpayers at risk of underpayment.”
Mr Linden suggested employers should be required to make super payments more frequently.
“Amending the law to require employers to pay super more frequently – at least monthly, but ideally at the same time as wages – is essential to stop super payments being used for business cash flow,” he said.
Employee super underpayment has been an ongoing concern for some time, particularly for SMEs, who say they find it difficult to effectively carry out the duties of the tax office and being penalised for factors beyond their control.
Should employers make super payments as often as employee wages? Tell us your thoughts below!
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
- Marketers need to reclaim the art of explaining value
By James Lawrence
- ATO’s 37% tax on Christmas festivities
By George Morice
- Performance anxiety not just a bedroom thing
By Dr Louise Mahler