Consultation on ‘protecting superannuation entitlements’

Following the recommendations of the Superannuation Guarantee Cross‑Agency Working Group, the Government has released draft legislation “to protect workers’ superannuation entitlements and modernise the enforcement of the superannuation guarantee”.

The draft laws extend Single Touch Payroll to all employers from 1 July 2019, and will require superannuation funds to commence ‘event-based’ reporting to the ATO of payments they receive for employees from their employer from 1 July 2018.

Combined, these measures (if passed as drafted) should provide the ATO with more timely information to support earlier detection and proactive prevention of non‑payment of superannuation owed to employees.

The ATO will have a suite of enforcement and collection tools for employers who break the law, including

• strengthened arrangements for director penalty notices and security deposits for superannuation and other tax-related liabilities;
• the ability (for the first time) to apply for court‑ordered penalties, including up to 12 months imprisonment; and
• the ability to require employers to undertake training.

The Government’s commitment to a Director Identification Number will also help identify those directors who are robbing their employees of their superannuation.

The Government introduced legislation last year to implement another recommendation by the Working Group to close a loophole that could be used by unscrupulous employers to short‑change employees who use salary sacrifice arrangements, and will progress that legislation along with this broader compliance Bill.