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Superannuation Guarantee Amnesty
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On 24 May 2018, the Government announced a once-off 12-month Superannuation Guarantee (SG) Amnesty for employers who have not paid the correct amount of SG for their employees in the past. Subject to passage of the legislation, the Amnesty will be available for the 12-month period from 24 May 2018 to 23 May 2019.

Eligibility for the Amnesty

  • The Amnesty only applies to any SG Shortfall from the introduction of SG on 1 July 1992 to the quarter ending 31 March 2018. 
  • Employers must voluntarily disclose amounts of SG Shortfall relating to the above period. Therefore, if an employer has already lodged an SG Charge Statement (and in that Statement disclosed particular SG Shortfalls), then those particular Shortfalls are not eligible for the Amnesty even if the amount of the Shortfall has yet to be paid. Likewise, Shortfalls that the ATO uncovers during current, future, or past audits of the employer are not eligible for the Amnesty. The disclosure of a new Shortfall must come from the employer, and must occur during the 12-month Amnesty period.
  • There is no requirement to actually make a payment to get the benefit of the Amnesty. Rather, employers only need to disclose an SG Shortfall. However, where the employer fails to make a payment during the Amnesty period, the employer will not receive a deduction for the catch-up payments (which is only available during the Amnesty)..

Where an employer has entered into a payment plan with the ATO that extends past 23 May 2019, only those payments made between 24 May 2018 and 23 May 2019 will be tax deductible.

Benefits to employers

  • The administration component of the Superannuation Guarantee Charge (SG Charge) is not payable (this is a $20 per employee per quarter)
  • Other penalties will not be applied. These can be up to 200% of the SG Charge that is payable
  • All catch-up payments that are made during the 12-month Amnesty period will be tax deductible.

By contrast, under the current law, the SG Charge paid to the ATO is not deductible, and late contributions that an employer has made to an employee’s superannuation and has elected to offset against their SG Charge liability are also not deductible.

Accessing the Amnesty

To access the Amnesty, employers or the Advisors must first calculate the amount payable (the SG Shortfall, plus nominal interest) and lodge one of the following forms: 

  • SG Amnesty Fund payment form (where an employer wishes to access the Amnesty and can pay the amount in full (including nominal interest) direct to an employee’s superannuation fund)
  • SG Amnesty ATO payment form (where an employer wishes to access the Amnesty but cannot pay the amount owing in full). If an employer has already lodged an SGC Statement or received an SGC assessment for a quarter, they can only use this form.

Employers need to lodge these completed forms electronically through the Business Portal or advisors can lodge on their behalf via the BAS Agent or Tax Agent Portal. 

Impact on employees concessional contribution caps

Where an employee exceeds the $25,000 concessional contribution cap, the ATO Commissioner can exercise discretion to disregard the contributions made under the Amnesty as follows:

  • Where an employer pays the SG Charge to the ATO, the employee will not need to apply for the Commissioner's discretion.
  • Where an employer pays the SG Charge directly to an employees' super fund, the employee will need to inform the ATO of the payment by applying for the Commissioner’s discretion.

Irrespective of the Amnesty, all employers should be encouraged to come forward and disclose and pay past shortfalls to get their SG affairs in order.  

The ATO has stated that employers who are not up-to-date with their SG payment obligations to their employees and who don't come forward during the Amnesty may face higher penalties in the future.

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This information is provided as a guide only and is not intended to constitute professional advice. You should obtain appropriate advice concerning your particular circumstances.

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