Employers given year to pay superannuation or risk jail

The Australian, May 24, 2018

Businesses will be given a 12-month amnesty to pay unpaid superannuation to workers, with interest, or face new penalties, ­including possible jail terms.

Financial Services Minister Kelly O’Dwyer said rogue ­employers who failed to take ­advantage of the amnesty, which starts today, would be hit with court orders under the government’s superannuation guarantee integrity measures.

It is estimated the amnesty will result in $230 million in unpaid superannuation being handed to about 50,000 employees.

“We are introducing this one-off amnesty to allow employers to wipe the slate clean and pay their workers what they’re owed,” Ms O’Dwyer told The Australian.

She said employers would not be let off the hook; to take advantage of the amnesty they would have to pay their workers their outstanding superannuation in full, plus interest calculated at 10 per cent a year.

Employers who failed to take advantage of the amnesty would face higher penalties when they were caught, of at least 50 per cent of the money they owed, on top of the unpaid super.

Legislation before parliament will allow the Australian Taxation Office to seek court-imposed penalties for employers who defy ­directions to meet their superannuation guarantee liabilities, including up to 12 months’ jail in extreme cases.

The bill will also require superannuation funds to report ­employer contributions at least monthly to the ATO, allowing for the earlier identification of non-payment.

The ATO estimates that in 2014-15 alone, about $2.85 billion in superannuation benefits went unpaid.

“While this represents a 95 per cent compliance rate, any level of non-compliance is unacceptable, which is why the Turnbull government is giving the ATO the tools it needs to enforce compliance,” Ms O’Dwyer said. “All Australians should be paid the ­entitlements they are owed.”

She said the government had not announced the amnesty as part of its Superannuation Guarantee Integrity Bill, introduced into parliament in March, as it could have encouraged employers to delay paying any superannuation debts.

Labor is broadly supportive of the Superannuation Guarantee Integrity Bill, which is currently before the Senate economics committee, but may propose amendments.