Superannuation Guarantee Amnesty

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The current development raises concerns among accountants in Sydney regarding the potential implications for their clients and the broader financial landscape. The passage of the Superannuation Guarantee Amnesty legislation in the Senate has encountered a roadblock.

Unfortunately, this setback means the law will not be considered until next year. Complicating matters further, the Federal Opposition has expressed opposition towards Amnesty. As a result, the future of the legislation is uncertain, casting doubt on its chances of being passed.

The Amnesty was to be available for the 12-month period from 24 May 2018 to 23 May 2019. Employers during this 12-month period needed to voluntarily disclose any past Superannuation Guarantee underpayments to access the benefits of Amnesty.

Under current law, SG Charge paid to the Australian Taxation Office (ATO) is not deductible, and late contributions that an employer has made to an employee’s superannuation fund, and has elected to offset against their SG Charge liability, are also not deductible.

If Amnesty is passed, the benefits to an employer would be:

  • All catch-up payments you make during the 12-month Amnesty period will be tax deductible.
  • The administration component of the Superannuation Guarantee Charge (SGG) is not payable ($20 per employee, per quarter, per SG Shortfall)
  • Part 7 penalties will not be applied. Potentially up to 200% of the SG Charge payable (the SG Charge includes the SG Shortfall you owe employees).

Given the uncertainty of the proposed law being passed, we suggest you hold off making any disclosures concerning Amnesty until the legislation becomes law.

Notwithstanding the Amnesty, all employers should remain mindful of their obligations under current law and take all actions necessary to keep their Superannuation Guarantee affairs in order.

Superannuation Guarantee is increasingly targeted by the ATO, and with ever-increasing data matching capabilities, employers not meeting their obligations are more likely to attract ATO scrutiny.

If you have any queries, please get in touch with your client manager.

Kreston Stanley Williamson Team

*Correct as of December 2018

Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.

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