Sarah Blakelock and Platon Chris remind employers to ensure they are complying with their superannuation guarantee obligations.
In December 2016, the Australian Capital Territory (ACT) Manager of Opposition Business in the Senate, Katy Gallagher, asked the Senate Standing Committee on Economics to inquire into the impact of non-payment of the Superannuation Guarantee and report by 22 March 2017.
The Association of Superannuation Funds of Australia (ASFA) has since urged Australian workers to check their super guarantee payments are accurate and up to date.
Industry super funds have also led the discussion around the inquiry to address the significance of the issue for millions of Australians. It is estimated that over one third of employers are not meeting their superannuation obligations on behalf of their employees.
This should cause all employers to consider whether they are on track with their super guarantee obligations. This should be top of mind for company directors, who can be held personally liable for unpaid and underpaid superannuation, even if the liabilities arose prior to their appointment as a director.
In the event that, as an employer, you discover that your super guarantee obligations have not been met, steps should be taken to rectify the situation as soon as possible as not only is the amount of the super guarantee shortfall payable, you may have to pay the super guarantee charge (SGC), which is made up of the super guarantee shortfall amounts, nominal interest and an administration fee. Additionally, general interest charge will accrue until the SGC is fully paid and a penalty may be also be imposed on employers for failing to provide an SGC statement or information relevant to assessing their liability. This can add up, especially in circumstances where there is a failure to pay super guarantee contributions some time ago. One further matter for consideration is that the additional costs incurred in respect of the late payment of super are non-deductible costs.
Given there is no limitation on the time period for which the Commissioner can issue a super guarantee charge assessment, where an underpayment has occurred, steps should be taken now to rectify the under payment of super guarantee.
If you believe you have an underpayment and the SGC is substantial, there are avenues you can take to make a voluntary disclosure and reduce your potential exposure to general interest charge and penalty. We engage with the Australian Taxation Office (ATO) in negotiating such outcomes but the first place to start is to review your compliance.