The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 has finally received royal assent. The amnesty will run for six months and organisations participating in the amnesty need to lodge their disclosures by 7 September 2020.

As detailed in our previous tax alerts, the much anticipated amnesty will enable employers who unwittingly short-paid superannuation, including on annual leave loading, to make disclosures with the following concessions:

  • Removal of the $20 per employee per quarter administration charge
  • Making the payment of superannuation guarantee charge income tax-deductible
  • Removal of the imposition of Part 7 Penalties (of up to 200 per cent of the liability)

The amnesty will be available for shortfalls occurring in periods up until the quarter ending March 2018.

The amnesty does not remove the need to pay 10 per cent interest on the shortfall amounts, as this is not a penalty as such, but is designed to compensate the employee for lost earnings.

What do you need to do?

If you previously lodged a superannuation guarantee charge disclosure, after 24 May 2018, and have been charged the administration fee, you should ask the ATO for a refund. If you have superannuation shortfalls to declare, ensure this is done within the six month period. After this time, there will be a restriction on the Commissioner’s discretion to remit penalties, so that a minimum 100 per cent (of a maximum 200 per cent) of the Super Guarantee Charge penalty will apply.

In our experience, the work to put disclosures together can be more extensive than first anticipated, as there are a number of different aspects and complexities to take into account. We suggest acting on this sooner rather than later to maximize the opportunity to lodge within the six month amnesty period and avoid significant penalties thereafter.