SG shortfall amnesty needs extension

The superannuation guarantee (SG) amnesty needs to be extended another six months to 7 March, 2021, given the adverse impacts of the COVID-19 pandemic, The Tax Institute believes.

The institute said it was “illogical and unreasonable” to maintain the 7 September, 2020, deadline for employers to come forward to self-correct historical SG shortfalls.

It said accountants and advisers had been under “enormous pressure” to help deliver the Government’s JobKeeper and cashflow boost assistance to their clients, and had pushed work on the amnesty to one side.

The institute’s senior advocate, Robyn Jacobson, said: “The current Stage 4 restrictions in Victoria highlight the issues with the deadline. The restrictions are preventing the collection and sharing of physical payroll records which are typically archived at currently inaccessible offices or off-site third-party storage areas.

VIEW ALL

View all

“Without such records, it is impossible for some employers to determine whether there are any shortfalls as far back as 1992 and therefore a need to claim the amnesty.”

Jacobson said determining SG shortfalls was a complex and time-consuming task as qualified personnel were needed to identify and calculate historical shortfalls.

The institute noted that when determining when an employer had an obligation to pay super often required professional expertise as the SG extended beyond the usual employment arrangements to include certain contractors and other workers.

Jacobson said the penalty for employers that missed the deadline were too harsh.

“These draconian penalties have the effect of actively discouraging employers to come forward as the consequences can be horrendous,” Jacobson said.

“An employer who pays just one day late is treated the same as an employer who never pays super. This is why the amnesty has been so desperately needed.

“The fact that the penalties for non-compliance with the SG system are so onerous they can place an employer in an insolvent position forcing a liquidation, administration or bankruptcy is reason enough to allow more time to apply for the amnesty. We should be assisting businesses to get back on their feet rather than pushing them towards collapse.”