New laws introducing penalties, including imprisonment up to 12 months, for non-compliance of superannuation guarantee obligations have been passed earlier this month.
These allow 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.
In addition, where an employer receives a notice, they must also complete an approved education course.
The maximum penalty for the offence is 50 penalty units, imprisonment for 12 months, or both.
There is a potential for the laws to catch out small to medium-sized family businesses where a spouse or family member may be appointed as director without any real involvement in the daily running of the business.
It is understood, that the criminal penalties will only apply to serious cases. However, in small businesses, unfortunately, super guarantee payments are the first thing that goes unpaid when a business runs into cashflow problems.
Semmens Partners has been on the front foot in ensuring that all Director's understand their obligations. When establishing a new entity, we have always ensured that whoever takes on the role of Director, is fully aware of their obligations 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.
Data from the ATO estimates that the super guarantee net gap at $2.79 billion. These new measures, along with the introduction of single touch payroll to all businesses, aim at shrinking this gap.
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.
Source: Accountants Daily