After the inaction of the previous Labor Government, where Bill Shorten and Chris Bowen were responsible for superannuation, it has taken a Liberal Government to protect members' money.
According to ATO estimates there is $2.85 billion in unpaid superannuation each year.
It is not acceptable for employers to cheat staff out of their superannuation entitlements. To combat this I introduced legislation today that will allow the Australian Taxation Office to increase penalties on unscrupulous employers.
The Bill will protect workers' superannuation entitlements by modernising the enforcement of the superannuation guarantee.
This Bill introduces very serious consequences for employers who break the law by short changing their employees. The ATO will have access to new enforcement and collection provisions, including strengthened arrangements for director penalty notices.
Importantly, in cases where employers defy directions to pay their superannuation guarantee liabilities, the ATO will be able to apply for court ordered penalties, including up to 12 months imprisonment.
The Bill – Treasury Laws Amendment (2018 Measures No.4) Bill 2018 – will also extend Single Touch Payroll to cover all employers from 1 July 2019, bringing payroll reporting into the 21st century.
Single Touch Payroll reporting will provide the Tax Office with current information about the amounts of superannuation that employers owe their employees. Separate to this Bill, reforms are already in train to ensure that from 1 July 2018 the ATO will receive near-real time information from superannuation funds about contributions they receive. Combined, these measures provide the ATO with timely information enabling it to detect superannuation non-compliance earlier and conduct proactive prevention of non-payment.
In addition the Government already has legislation before Parliament to close a loophole, to stop unscrupulous employers short changing superannuation contributions for employees who use salary sacrifice arrangements.
The Bill will enable the transition to retirement income stream of a superannuation fund member to be paid at death to their eligible dependants without having to be commuted and a new income stream started. Administrative processes will be simplified for bereaved beneficiaries at the time of a member's death.
Amendments also eliminate double taxation in respect of deferred annuities purchased by superannuation funds and retirement savings accounts so that the fund or RSA can meet a liability to pay a deferred superannuation income stream.