Revenue and Financial Services Minster Kelly O’Dwyer has announced the federal government’s intention to introduce a bill into Parliament this year to shut down a loophole allowing employers to reduce their obligations under the superannuation guarantee (SG) levy if an employee enters into a salary sacrifice arrangement.
The move coincides with the release of the Guarantee Cross-Agency Working Group’s report “Superannuation Guarantee Non-compliance”, and is one of several practical recommendations contained in the document.
Currently an employer can incorporate salary sacrifice arrangement within its SG obligations, effectively thwarting the employee’s ability to contribute additional amounts toward their retirement savings.
“If Australians are to continue to have confidence in the integrity of the superannuation system, we must ensure employers are paying workers their full entitlements, whether they are wages or superannuation,” O’Dwyer said on Friday.
The Minster also welcomed the increased cross-agency collaboration that had resulted from the working group’s activities.
The government said information sharing across regulatory bodies had improved and the ATO had heightened its focus on SG compliance.
Further, the government reaffirmed the regulatory agencies would have a continued focus on protecting the entitlements and rights of employees and ensuring a level playing field for employers existed.
The remaining recommendations from the report are still being considered, with the government stipulating any measures progressed will be done with a view to improving compliance without unduly burdening employers.
The Guarantee Cross-Agency Working Group was set up in December 2016, comprising senior representatives from the ATO, Treasury, the Department of Employment, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority with the aim of formulating a set of recommendations to improve SG compliance.