By Dan Blackman
Despite protest from the Opposition, a Bill seeking to assist in the recovery of unpaid superannuation by employers has sailed through the House of Representatives and is set to be debated in the upper house when the Senate returns in 2020.
The Australian Taxation Office (ATO) has estimated that approximately $2.8 billion of employee superannuation entitlements went unpaid in 2015-16 alone.
If passed, the Bill will give eligible employers a final opportunity to ‘fess up and pay billions in overdue superannuation guarantee liabilities dating back to 1992, while avoiding the usual penalties for late payment. The proposed amnesty period will start on 24 May 2018 and end six months after the day on which the legislation receives assent.
According to the Assistant Treasurer, Mr Michael Sukkar, the Bill offered both a carrot and a stick to encourage non-complying employers to come forward, but did not reduce employees’ entitlements.
“Everything that an employer owes to its employees must still be paid, paid immediately and paid in full,” he said.
“Employers who do the right thing and come forward during the amnesty period will also be able to claim tax deductions for payments made under the amnesty, which was the same outcome as if they had paid on time.”
Mr Sukkar said that the stick would be reserved for employers that could have come forward during the amnesty period but chose not to do so and were subsequently caught by the ATO.
“Their failure to come forward will generally result in the imposition of a minimum 100 per cent penalty on the employer, on top of the other penalties and charges that are ordinarily associated with late payment of super guarantee obligations,” he said.
However, the Opposition believes that the amount of unpaid superannuation is much bigger than indicated and that the government needed to get tougher on dishonest employers.
The Shadow Minister for Financial Services, Mr Stephen Jones, quoted estimates from Industry Superannuation Australia suggesting that 2.4 million workers were losing somewhere in the vicinity of $5.6 billion in payments each year.
“We think the whole scheme is a problem,” he said.
“If the government were serious about unpaid superannuation, they would be looking at a much wider suite of policies. They would be looking at how they can enhance enforcement activities.”
“While employees have the book thrown at them for stealing from employers, by introducing a superannuation guarantee amnesty the government is establishing a different rule for employers who steal deferred wages from employees,” said Mr Jones.