Eligibility for SG Amnesty

Superannuation Guarantee (SG) Amnesty qualification criteria for employers

When will an employer qualify for the SG amnesty?

New S.74 of the Superannuation Guarantee (Administration) Act 1992 sets out the qualification criteria for employers who wish to obtain the beneficial treatment provided by the SG amnesty (the benefits will be discussed in future articles).

Specifically, S.74(1) provides that an employer will qualify for the SG amnesty for the employer’s SG shortfall for a particular quarter if all of the following conditions are satisfied:

The disclosure must be made in the approved form during the ‘amnesty period’.

An employer must make a disclosure of their SG shortfall amount for the quarter to the Commissioner during the amnesty period, being the period:

that started on 24 May 2018 (i.e., the day the Bill was introduced into the House of Representatives); and
which ends at 11:59 PM on 7 September 2020 (i.e., six months after the day the Amnesty Bill receives Royal Assent, as extended by the ATO to the next working day).

The employer must make the disclosure in the approved form. An ATO-approved form allows the Commissioner to specify the information and manner of providing the information necessary for effective disclosure. Refer to new S.74(1)(a) of the SGAA.

The approved form (an XLS spreadsheet) can be downloaded from the ATO’s website and will generally be lodged through the ‘mail function’ in the Business Portal or Online Services for Agents. Refer to the ATO online document ‘Superannuation guarantee amnesty’ (QC 55626).

The disclosure must be the first time the SG shortfall has been disclosed to the Commissioner.

The disclosure made by the employer must relate to an amount of SG shortfall that has not been previously disclosed to the Commissioner. Refer to new S.74(1)(a)(ii) of the SGAA.

Accordingly, employers that had already come forward before the start of the amnesty period (i.e., where they had lodged an SGC statement before 24 May 2018) will not benefit from the SG amnesty by disclosing an amount of SG shortfall that has already been included in an existing SGC assessment.

However, an employer may still qualify for the concessional treatment under the SG amnesty if they had previously made disthe closure about their SG shortfall for a quarter but then come forward (during the amnesty period) with information about additional amounts of SG shortfall for that same quarter. This may be the case, for example, where an employer had lodged an SGC statement before the amnesty period that understated the amount of SG shortfall.

Note that where employers make disclosures of additional amounts of SG shortfall for a quarter during the amnesty period. The employer’s SG shortfall is covered by the SG amnesty only to the extent that the disclosure results in an increase in the SG shortfall. Refer to new S.74(2) of the SGAA.

The disclosure must relate to quarters covered by the SG amnesty.

The SG amnesty must be available in relation to the relevant quarter. Practically, this means the beneficial treatment provided by the SG amnesty is to apply in relation to the quarter starting on 1 July 1992 (i.e., the day the SGAA commenced) and all subsequent quarters until (and including) the quarter starting on 1 January 2018 (i.e., the March 2018 quarter). Refer to new S.74(1)(b) of the SGAA.

This means the SG amnesty is not available in relation to SG shortfalls relating to a quarter starting on or after 1 April 2018 (i.e., the June 2018 quarter or subsequent quarters).

The Commissioner must not have previously informed the employer that he is examining, or intends to examine, the employer’s SGC obligation for that quarter.

For disclosure in respect of a quarter to qualify for the SG amnesty, the Commissioner must not have, at any time before the disclosure, informed the employer that they are examining, or intend to examine, the employer’s compliance with their obligations to pay SGC in relation to the quarter. Refer to new S.74(1)(c) of the SGAA.

For these purposes, the term ‘examination’ is very broad and covers not only traditional audits the Commissioner undertakes to ascertain an entity’s tax-related liability, but any examination of an entity’s affairs. This will include reviews, audits, verification checks, record-keeping reviews/audits, and other similar activities. Refer to Miscellaneous Taxation Ruling MT 2012/3.

ATO may disqualify employers from SG amnesty

The commissioner may notify an employer (in writing) that the employer has been disqualified from the SG amnesty for a particular quarter. If this occurs, that employer will not be entitled to the concessional treatment afforded by the SG amnesty.

While the employer may have initially qualified for the SG amnesty for the quarter in question, this written notice may be issued by the ATO if:

1. the employer:

has failed to pay the ATO the amount of the SGC imposed (on the SG shortfall disclosed for the quarter under the SG amnesty) on or before the day the SGC becomes payable; and
has not, at any time, entered into a payment arrangement with the ATO in relation to the relevant amount; or

2. the employer has entered into a payment arrangement for the relevant amount but has failed to comply with that payment arrangement.

The effect of such a notice is that the employer ceases to qualify, and is taken never to have qualified, for the SG amnesty in relation to the relevant amount of SG shortfall. In such cases, the Commissioner can unwind any benefits that have accrued to the employer under the SG amnesty by amending the relevant SG assessment of the employer. Refer to new S.74(4) to (6) of the SGAA.

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