“Serious consequences” for Australian employers failing to pay pension liabilities “Serious consequences” for Australian employers failing to pay pension liabilities

“Serious consequences” for Australian employers failing to pay pension liabilities
30 Jan 2018

Australian employers failing to pay pensions contributions could face “serious consequences” under new draft legislation released this week.

Minister for Revenue and Financial Services Kelly O’Dwyer reminded employers that, as of 1 July 2019, they will be required to use the new Single Touch Payroll system. The system enables employers to report payments such as salaries and wages, Pay As You Go (PAYG) tax and pension (superannuation) contributions directly to the Australian Taxation Office (ATO) from their payroll system as they renumerate their staff.

According to Nestegg, the aim is to boost reporting levels relating to pension payments and obligations, while also enabling the ATO to access real-time compliance information. From 1 July this year, pension funds will likewise need to begin event-based reporting to the ATO.

Employers that fail to comply will be uncovered through a suite of enforcement and collection tools, the minister said.

"In cases where employers defy directions to pay their superannuation guarantee liabilities, the ATO will be able for the first time to apply for court-ordered penalties, including up to 12 months imprisonment," she added. “To embed ongoing compliance, the ATO will also have the ability to require employers to undertake training.”

The legislation will also close a loophole that allowed unscrupulous employers to short-change workers who opt for salary sacrifice schemes.

But Industry Super Australia public affairs director Matt Linden said the laws did not go far enough. By not aligning the compulsory superannuation payment schedule with regular wage cycles, "these laws fall seriously short of protecting worker interests", he warned.

Problem areas include the four-month delay between a pension entitlement appearing on a payslip and the actual payment, as well as the AUS$450 (US$366) per month pension guarantee threshold, which he described as “meagre”. The Australian Institute agreed.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 

 

Australian employers failing to pay pensions contributions could face “serious consequences” under new draft legislation released this week.

Minister for Revenue and Financial Services Kelly O’Dwyer reminded employers that, as of 1 July 2019, they will be required to use the new Single Touch Payroll system. The system enables employers to report payments such as salaries and wages, Pay As You Go (PAYG) tax and pension (superannuation) contributions directly to the Australian Taxation Office (ATO) from their payroll system as they renumerate their staff.

According to Nestegg, the aim is to boost reporting levels relating to pension payments and obligations, while also enabling the ATO to access real-time compliance information. From 1 July this year, pension funds will likewise need to begin event-based reporting to the ATO.

Employers that fail to comply will be uncovered through a suite of enforcement and collection tools, the minister said.

"In cases where employers defy directions to pay their superannuation guarantee liabilities, the ATO will be able for the first time to apply for court-ordered penalties, including up to 12 months imprisonment," she added. “To embed ongoing compliance, the ATO will also have the ability to require employers to undertake training.”

The legislation will also close a loophole that allowed unscrupulous employers to short-change workers who opt for salary sacrifice schemes.

But Industry Super Australia public affairs director Matt Linden said the laws did not go far enough. By not aligning the compulsory superannuation payment schedule with regular wage cycles, "these laws fall seriously short of protecting worker interests", he warned.

Problem areas include the four-month delay between a pension entitlement appearing on a payslip and the actual payment, as well as the AUS$450 (US$366) per month pension guarantee threshold, which he described as “meagre”. The Australian Institute agreed.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 

 

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