The SG Amnesty bill has finally passed. Employers who voluntarily disclose during the Amnesty Period can access various concessions, including a deduction of the SGC liability and a remission of administration fees and Part 7 penalties. If an employer suspects that they may have historic unpaid superannuation guarantee contributions, we recommend that they seek advice and consider if they can take advantage of this once-off Amnesty before the Amnesty period ends.
The uncertainty around the Superannuation Guarantee (SG) Amnesty bill is finally over. After around two years since it was first introduced, the Superannuation Guarantee Amnesty bill was finally passed on Monday 24 February 2020 and is currently awaiting royal assent.
The SG Amnesty legislation provides a one-off amnesty for employers who make a voluntary disclosure during the amnesty period about any unpaid superannuation contributions relating to the period from 1 July 1992 to 31 March 2018.
Under the Amnesty, an employer who makes a voluntary disclosure during the Amnesty period:
- will be able to claim a tax deduction for their superannuation guarantee charge (SGC) liability during the Amnesty period;
- can receive a remission of the administration fee component of the SGC liability (i.e. $20 per employee per quarter);
- will receive a remission of any Part 7 penalties for failure to lodge an SGC statement (e.g. this penalty can be up to 200% of the SGC); and
- can pay the unpaid superannuation directly to the employees' funds, rather than through the ATO.
The amnesty period starts from 24 May 2018 and will expire six months after the date the legislation receives royal assent.
The SG Amnesty only applies to underpayments that have not been previously disclosed to the ATO, and were made before any notification of an audit or review having commenced.
As there is a limited window to take advantage of this one-off amnesty, employers who may have any unpaid SG liabilities, should obtain advice and consider a voluntary disclosure.
Employers who have already made disclosures under the Amnesty period should seek a refund of any Part 7 and administrative fee penalties if necessary.
However, the new legislation also carries a sting in its tail. After the amnesty period ends, the Commissioner's discretion to remit Part 7 penalties will be reduced. Therefore, if an employer lodges a SGC statement late after the amnesty period has expired, the Commissioner cannot remit a Part 7 penalty below 100% of the penalty (except in exceptional circumstances).
For SG shortfalls that occur after 1 April 2018, the normal SGC rules apply (e.g. SGC will not be deductible and the administrative fee component of the SGC will apply etc.).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.