On 24 May 2018, the Government proposed a one-off, 12-month superannuation guarantee amnesty (the Amnesty). If legislated, the Amnesty will provide a once-off opportunity for employers to disclose super guarantee (SG) shortfalls which occurred between 1 July 1992 and 31 March 2018 without penalty.
Under the proposed measure, employers who voluntarily disclose past year’s shortfalls in SG contributions will be exempt from paying an administration fee, being $20 per employee per quarter, and a penalty for failing to lodge SG statement on time. A penalty can be up to 200% of the SGC payable. Also, catch-up SG payments made between 24 May 2018 to 23 May 2019 will be tax deductible. Employers will still be liable for interest on the on the super guarantee shortfall amount.
The proposed Amnesty still has to be passed as law before it will have an actual effect.
Therefore, where an employer makes a voluntary disclosure and pays SG guarantee shortfall and the proposal is not legislated, any contributions made under the Amnesty will not be tax-deductible. Also, administration fees and penalties will be payable under the current legislation. An employer will not be able to receive a refund for payments made under the Amnesty if the Bill doesn’t pass.
Employees receiving contributions made under the Amnesty need to be aware that catch up contributions by an employer may cause employees to exceed their $25,000 annual concessional contributions cap.
If you have any queries please contact the team at Paris Financial on 03 8393 1000.