24 January 2018

Consultation on protecting your superannuation entitlements

It is not acceptable for people not to be paid their superannuation entitlements.

The Government has released draft legislation to protect workers’ superannuation entitlements and modernise the enforcement of the superannuation guarantee.

The draft laws will extend Single Touch Payroll to all employers from 1 July 2019, which will improve the reporting of superannuation obligations and improve the Australian Taxation Office’s ability to get real time information about an employer’s compliance. In addition, from 1 July 2018 superannuation funds will commence ‘event-based’ reporting to the ATO of payments they receive for employees from their employer.

Combined, these measures provide the ATO with more timely information to support earlier detection and proactive prevention of non‑payment of superannuation that is rightfully owed to employees. The Government’s commitment to a Director Identification Number will help identify those directors who are robbing their employees of their superannuation.

There will now be serious consequences for employers who break the law. The ATO will have a suite of enforcement and collection tools, including strengthened arrangements for director penalty notices and security deposits for superannuation and other tax-related liabilities. And, in cases where employers defy directions to pay their superannuation guarantee liabilities, the ATO will be able for the first time to apply for court‑ordered penalties, including up to 12 months imprisonment. To embed ongoing compliance the ATO will also have the ability to require employers to undertake training.

These measures follow the recommendations of the Superannuation Guarantee Cross‑Agency Working Group, which made targeted proposals for overcoming barriers to better compliance. The Working Group also recommended closing a loophole that could be used by unscrupulous employers to short‑change employees who use salary sacrifice arrangements. The Government introduced legislation to close this loophole last year, and will progress that legislation along with this broader compliance Bill.

The draft legislation and supporting materials are available on the Treasury website, and interested stakeholders are encouraged to provide their views.

Submissions are invited by 16 February 2018.