Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

Government rolls out red tape on Super Guarantee

Adam Zuchetti
Adam Zuchetti
14 July 2017 1 minute readShare
Rolls out red tape

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!

Government rolls out red tape on Super Guarantee
mybusiness logo
Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?