New measures to crack down on super non-compliance
The Australian Taxation Office (ATO) will receive additional funding for a Superannuation Guarantee Taskforce to crack down on non-compliance by employers.
The Government has announced a package of reforms to close a legal loophole used by dishonest employers that short-change employees who make salary-sacrifice contributions to super.
Funding for the Taskforce coincides with new data released by the ATO reporting a significant estimated Super Guarantee gap. This gap is the difference between the theoretical amount payable by employers to be fully compliant and actual contributions received by funds.
The ATO estimates the net SG gap as 5.2 per cent or $2.85 billion of the total estimated $54.78 billion in SG payments that employers were required to pay in 2014-15.
The gap exists because some employers are not meeting their super guarantee obligations either by not paying enough or not paying at all.
Employers who deliberately are not paying their workers’ super entitlements are robbing their workers of their wages. The new package aims to take action on this so employers cannot hide from their legal obligation.
Some of the measures included in the package involve:
- A requirement for superannuation funds to report contributions received more frequently (at least monthly) to the ATO. This is aimed to better identify patterns of non-payment and allow for immediate action;
- The rollout of Single Touch Payroll to further improve visibility on reporting, simplify tax and super for employers while allowing the Tax Office to better detect patterns of non-compliance;
- Improvements to the effectiveness of the ATO’s recovery powers, including strengthening director penalty notices and the use of security bonds for high-risk employers, to ensure unpaid super is better collected by the ATO and paid to employees’ super accounts; and
- Allowing the ATO to seek court-ordered penalties in the most shocking cases of non-payment, including employers who are repeat offenders.
The crackdown serves as a strong reminder for businesses to do the right thing. The ATO deals with roughly 20,000 complaints annually regarding unpaid super from both former and current employees.
Superannuation is a legal entitlement for employees; failure to pay employee super guarantee is illegal and can result in harsh penalties.