Clifford Gouldson Lawyers

Senate inquiry investigating unpaid super

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In a very strong reminder for employers to ensure they are up to date with their super obligations the Senate recently announced a full scale inquiry into employer and agency compliance with the 9.5% Superannuation Guarantee (SG).
Starting in 2017, the Senate’s inquiry will look at the accuracy of data collected by prudential and corporate regulators, along with the effectiveness of the Australian Tax Office’s compliance enforcement of the SG. The review will examine:

1.  The economic impact on:

  • workers, their superannuation balances, and retirement incomes;
  • competitive neutrality among employers; and
  • government revenue, including forgone superannuation contributions, earnings taxes, and SG charge penalties, over both the forward estimates and the medium term.

2.  The accuracy and adequacy of:

  • information and data collected by the Australian Taxation Office (ATO), the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission on SG non-payment;
  • information and data collected by other agencies, such as the Fair Work Ombudsman, on SG non-payment; and
  • any legislative, privacy, or other reporting barriers preventing the collection of accurate information and data on SG non-payment.

3.  The role and effectiveness of:

  • the ATO monitoring, investigations, and recovery of unpaid SG, including technology and data collection to predict and prevent non-payment;
  • resources and coordination between government agencies and other stakeholders to prevent non-payment;
  • legislation and penalties to ensure timely and fair payment of SG;
  • superannuation funds in detecting and recovering unpaid SG;
  • employment and contracting arrangements, including remedies to recoup SG in the event of company insolvency and collapse, including last resort employee entitlement schemes; and
  • measures to improve compliance with the payment of SG.

4.  The appropriateness of responses by:

  • the ATO receiving complaints and ‘tip-offs’ about SG non-payment;
  • members of Parliament asked to assist and support constituents who have been impacted by SG non-payment; and
  • accountants, auditors, creditors and financial institutions who become aware of SG non-payment.

5.  Any other related matters.

The inquiry comes as a result of troubling statistics like those released by Industry Super Australia in May 2016, stating that based on ATO data, the value of unpaid super is around $6.2 billion a year. By 2023, losses to the super system are estimated to amount to $44 billion and in the last financial year alone, the ATO recouped $241 million from non-compliant employers.
The inquiry serves as a reminder to employers to ensure they are complying with their SG obligations and it is likely the enforcement of the guarantee will see drastic changes in the years to come in order to address the overwhelming amount of unpaid superannuation entitlements.
Submissions to the inquiry will close on 17 February, 2017, with the final report to be tabled on 22 March, 2017.
For tailored advice regarding your superannuation obligations, contact our Workplace Team

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