Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
Subscribe to our newsletter SIGN UP

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Big fines, prison on the cards as new SG penalties introduced

New laws introducing penalties, including imprisonment up to 12 months, for non-compliance of superannuation guarantee obligations have since passed, with accountants urged to bring clients up to speed.

Tax&Compliance Jotham Lian 01 March 2019
— 1 minute read

Earlier this month, new legislation was passed, allowing the commissioner to issue a direction to an employer to pay an outstanding super guarantee liability, with failure to comply possibly resulting in criminal penalties.

Advertisement
Advertisement

Employers who receive direction from the commissioner must also complete an approved education course.

The maximum penalty for the offence is 50 penalty units, imprisonment for 12 months, or both.

Speaking to Accountants Daily, RSM senior manager Tracey Dunn said the new law might catch out small to medium-sized family businesses where a spouse or family member may be appointed as director without fully understanding their obligations regarding super payments.

“Obviously the criminal penalties will only apply to serious cases but unfortunately in a lot of small businesses, super guarantee payment are the first thing that goes and they are quite often behind because of cashflow issues so there will be a higher risk,” said Ms Dunn.

“For example, a husband runs a business and he is the brains of the business but the wife will be put in a position where she is a director. The accountant may discuss the director obligations with the husband but then rely on the husband to relay that to the wife and she may not ever fully understand what her risk is.

“They now face a criminal penalty if within a business, those compulsory superannuation guarantee payments aren’t made on time.”

Ms Dunn believes accountants will need to be on the front foot to help their clients understand the new risks.

“Accountants and advisers really need to ensure that when their clients employ staff, they are fully aware of the risk of non-compliance with super guarantee obligations,” she said.

“There is a real onus now on accountants and tax advisers to ensure their clients really fully understand what the risk is when they take a role as either an individual employer, the director of a trustee company, or a director of a company that is employing staff.”

Latest data from the ATO place estimates for the super guarantee net gap at $2.79 billion, with Ms Dunn believing that the new measure, along with the introduction of single touch payroll to all businesses, will see the gap shrink in the near future,

“With the measures in place now, it is a clear indication now that the government is extremely serious about ensuring that employees receive their compulsory super,” she added.

The new legislation is awaiting Royal Assent, with the legislation to take effect from 1 April 2019, but will apply to SGC obligations arising from 1 July 2018.

This email address is being protected from spambots. You need JavaScript enabled to view it. 

Big fines, prison on the cards as new SG penalties introduced
image intro
accountantsdaily logo
Jotham Lian

Jotham Lian

Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

Tax&Compliance
FROM THE WEB