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Canberra urged to reinstate SG amnesty for payday super


It would encourage employers to rectify historical shortfalls, industry associations say.

By Miranda Brownlee12 minute read

A group of industry associations have urged the government to consider reintroducing the superannuation guarantee amnesty as part of its proposal to implement a payday model for super.

Three accounting bodies – the SMSF Association, the Tax Institute and the Financial Advice Association of Australia – said an amnesty would encourage employers to rectify historical SG shortfalls and minimise the need for the ATO to administer a dual system for SG shortfalls before and after 1 July 2026.


The previous SG amnesty, which was originally intended to apply from 24 May 2018, ended on 7 September 2020.

However, the SG amnesty only received royal assent on 6 March 2020, effectively giving employers only six months to use it.

“This six-month period coincided with the severe economic and social impacts of the Covid-19 pandemic, which left employers with a limited ability to come forward and rectify historical SG shortfalls due to difficulties accessing business records during extended lockdowns, reduced resources, constrained cash flow and access to professional advice,” the submission said.

“The amnesty period was not extended despite repeated requests by the professional bodies and industry.”

The joint bodies said another SG amnesty should therefore accompany the implementation of payday super on 1 July 2026.

“We recognise that some employers may not have the necessary cash flow to rectify historical SG shortfalls, but for those who do, this would provide them with the opportunity to rectify shortfalls as part of the implementation of payday super,” the submission said.

The bodies also said they would like to see an overhaul of the current super guarantee charge model which was “overly complex and punitive”.

“The design of the SGC and the associated penalties deter self-rectification and they therefore operate as a disincentive for employers to voluntarily report and rectify historical shortfalls,” the submission said.

“One of our key concerns is the draconian application of penalties that do not proportionately reflect the loss to employees or the ‘culpability’ of an employer who is in arrears.”

“The penalty component of the SGC, in particular, is likely to deter employers from rectifying mistakes or missed payments,” the submission said.

“The current rules do not allow for the consideration of an employer’s particular circumstances and can punish employers who have taken all reasonable steps but are nonetheless subject to the SGC due to delays beyond their control caused by intermediaries in the superannuation payment process, or honest mistakes.”

The joint bodies said the SGC model should instead apply “proportionately and simply”.

They have proposed a revised model with four components:

A shortfall component based on the OTE of the employee;

An interest component (SG interest) that better reflects the loss of earnings to the employee’s superannuation fund;

A penalty component that is charged only on the shortfall component and is based on the existing culpability penalty regime in Division 284 of Schedule 1 to the TAA; and

A GIC component.

The submission also said that employers should be given a mechanism to correct overpayment under the proposed payday super model, given that employers are likely to face significant challenges calculating the exact amount of SG contributions that are required to be paid, particularly in the early years.


“We consider it important that the provisions contain a timely mechanism to correct overpayments. If there is no change to the relationship between the employer and employee, it should be possible to carry forward an overpayment to the next SG obligation or reconciliation period,” it said.


Canberra urged to reinstate SG amnesty for payday super
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