Crackdown on super rip-offs

Employers who don’t pay super could face up to 12 months’ jail or court-ordered financial penalties. This is one of the proposals in draft legislation released by the federal government. “It is not acceptable for people not to be paid their superannuation entitlements,” Kelly O’Dwyer, the Minister for Revenue and Financial Services, said at the time.

Employees missed out on

$2.85 billion in super in 2014-15, according to the tax office, so this crackdown can’t come soon enough.

Other measures proposed in the draft legislation “to protect workers’ superannuation entitlements and modernise the enforcement of the superannuation guarantee” include:

Single Touch Payroll, which will be mandatory for employers with 20 or more employees from July 1, 2018, will be extended to smaller employers from July 1, 2019. It means employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO directly from their payroll solution at the same time they pay their employees.

From July 1, 2018 super funds will have to tell the tax office as soon as they receive payments for employees from their employer.

A director identification number will be introduced to help identify those directors who are robbing their employees of their superannuation.

A loophole that could be used by unscrupulous employers to shortchange employees who use salary sacrifice will be closed. It allows employers to calculate the amount they owe their workers based on the salary minus the voluntary sacrifices.