Superannuation guarantee compliance reform package
The Government has announced a further package of reforms to give the Australian Taxation Office (ATO) near real-time visibility over superannuation guarantee (SG) compliance by employers. Not only will the Government provide the ATO with additional funding for a SG Taskforce to crackdown on employer non-compliance, it will also implement measures to:
· Require superannuation funds to report contributions received more frequently, at least monthly, to the ATO.
· Rollout Single Touch Payroll (STP), so employers with 20 or more employees will transition to STP from 1 July 2018, with smaller employers coming on board from 1 July 2019.
· Improve effectiveness of the ATO’s recovery powers, including strengthening director penalty notices and the use of security bonds for high-risk employers.
· Provide the ATO with the ability to seek court-ordered penalties in the most egregious cases of non-payment.
These measure should help eliminate non-compliance in regards to SG contributions.
In addition, the ATO has released its estimate of the Superannuation Guarantee (SG) gap The gap is the difference between the theoretical amount payable by employers to be fully compliant with their SG obligations, and actual contributions received by funds. The ATO estimates the net SG gap to be 5.2 per cent, or AUD2.85 billion, of the total estimated AUD54.78 billion in SG payments that employers were required to pay in 2014-15.
ATO releases SuperStream program benefits report
The ATO has released the SuperStream Benefits program report which illustrates the implementation of SuperStream between July 2012 and December 2016 has delivered a range of benefits that have fundamentally improved the superannuation system experience for fund members, employers and funds. The report shows SuperStream outcomes of lower cost, ease of operation, and increased retirement savings can be traced to these benefits.
Visa checks for DASP application
On 14 August 2017, the ATO updated its website with respect to online applications for a Departing Australia superannuation payment (DASP).
The ATO has indicated that they hold online DASP applications for 14 days before sending them to super funds for processing. During this period, the ATO will validate the visa information and check with the Department of Immigration and Border Protection, as needed.
New laws enacted
The Treasury Laws Amendment (2017 Measures No 4) Bill 2017 passed both Houses of Parliament on 17 August 2017, and received Royal Assent on 23 August 2017. The Bill contained the rollover relief provisions relating to mandatory transfers within a superannuation fund in the transition to a MySuper product, undertaken by 1 July 2017.
First home super saver scheme and downsizer contributions - ATO consultation
Consultation meetings are being set up between superannuation funds and industry stakeholders to discuss administration options relating to the Government’s proposed First Home Super Saver Scheme (FHSSS) and the measures relating to ‘downsizing contributions into superannuation’. As reported in the Legislative Update section, the legislation to implement the measures is currently before Parliament. The ATO discussions are intended to consider:
· Administrative design.
· Reporting requirements.
· Law companion guidelines.
· Other specific implementation issues.
The ATO expects to complete its consultation during October 2017.
Legislative instrument: variation to the rate of withholding for certain superannuation beneficiaries
Th variation to the rate of withholding for certain superannuation beneficiaries legislative instrument, which commenced on 1 July 2017, ensures that amounts of ‘non assessable non exempt’ (NANE) income paid to a superannuation beneficiary are not subject to withholding when the payee has not quoted their tax file number (TFN). The instrument ensures that payees are not subject to withholding from superannuation payments which are not subject to tax, when those payments are made in conjunction with other assessable amounts and the recipient has not quoted their TFN.
This change may require system updates to ensure withholding tax is not deducted from NANE income where a TFN is not provided by the beneficiary.