Superannuation guarantee amnesty bill passed by Parliament

Posted On June 10, 2020

The long-awaited superannuation guarantee amnesty bill passed Parliament on 24 February and received Royal Assent on 6 March 2020.

This law change provides a number of incentives for employers to pay any unpaid historical superannuation guarantee (SG) amounts relating to the period 1 July 1992 to 31 March 2018.

Superannuation guarantee amnesty benefits

Provided unpaid superannuation guarantee amounts relating to the period above are paid during the amnesty period of 24 May 2018 until 6 September 2020, eligible employers will receive the following benefits:

  1. The SGC will be deductible

The SGC, which is usually non-deductible, is comprised of the following amounts:

  • the total SG shortfall – that is, the total of the SG shortfalls for each affected employee;
  • interest on SG shortfalls – currently 10% per annum on each individual SG shortfall; and
  • an administration fee – usually $20 per employee, per quarter (but note point 2 below). 

2. The administration fee component of the SGC will be waived.

3. No penalties will be applied for failing to lodge an SGC statement (can be up to 200% of the SGC amount).

Summary of superannuation guarantee amnesty benefits

  Payment of outstanding SGC amounts under normal rules Payments of qualifying outstanding SGC amounts during the amnesty period
SGC Non-deductible Deductible
Administration fee component of SGC $20 per employee, per quarter Waived
Penalties for failing to lodge an SGC statement Up to 200% of the SGC amount Waived*
Impact on employees’ concessional contributions Amount above concessional contributions cap (currently $25,000) included in assessable income and taxed at marginal tax rates Excluded from the calculation of the employee’s concessional contributions cap
Div 293 tax Included in employee’s ‘low tax contributed amounts’ for the purposes of additional tax under Division 293 Excluded from the calculation of the employee’s ‘low tax contributed amounts’ for the purposes of additional tax under Division 293

* A minimum penalty equal to 100% of the SGC will apply to undisclosed SGC shortfalls during the amnesty period, which are later uncovered but were not disclosed.

Eligibility criteria

The benefits under the amnesty are only available if:

1. The Commissioner has not previously advised the employer that they are examining, or intending to examine, the employer’s compliance with SGC;

2. The SG shortfalls have not previously been disclosed to the Commissioner before the amnesty period;

3. The information is disclosed to the Commissioner in the approved form;

4. The employer has not been disqualified from the beneficial treatment under the amnesty.

If you would like to discuss this matter further, including the eligibility criteria and how to make a disclosure in the correct form, please contact out office on 6372 6444.