A pilot program that nudges employers to pay their superannuation guarantee will soon be rolled out to the wider business population, as the ATO seeks to act on an “unprecedented level of visibility” of super data.
Speaking at the 2019 ASFA National Policy Roadshow, James O’Halloran, ATO deputy commissioner, superannuation and employer obligations, said that with the implementation of Single Touch Payroll (STP) and new reporting changes for APRA-regulated funds, the Tax Office now has greater visibility over the super system than it ever had before.
“We can now see patterns, volumes and contribution flows which, for the most part, confirm what we expect but also allow us to identify potential discrepancies or issues and to follow these up in a timely way,” Mr O’Halloran said.
With that greater access to data, the Tax Office’s immediate focus is to reduce non-payment of super guarantee (SG) by employers through early detection and a proactive “nudge” approach.
“As we gain increased assurance in the data and the conclusions we can draw from it, we’ll use it to move sensibly into proactive ‘nudges’ and warnings to clients; for example, directly notifying or nudging employers we’ve identified as not having paid superannuation guarantee (SG) to their employees per quarter as required,” Mr O’Halloran said.
“In fact, we recently piloted this approach with a small sample of 85 employers who we contacted regarding their late payment of SG. After our contact, some 50 per cent of these employers then lodged and paid the outstanding SG to the ATO for their employees.
“We intend to expand this approach to those employers who haven’t paid SG to their employees within 30 days after the end of the reporting quarter.”
With STP now law for businesses of all sizes, Mr O’Halloran said businesses can now expect the ATO to be able to detect where an employer may not be correctly calculating their employees’ SG, allowing them to intervene and assist before the amount is even due for payment.
“While the immediate benefit to individuals who are being underpaid their super entitlements is apparent, this visibility and our ability to proactively engage with employers who don’t meet their obligations means we can also better ensure a level playing field for business, particularly small business,” he added.
Time for a review?
Despite acknowledging the need for employers to come good on their SG obligations, the industry has expressed concerns over the “strict, unforgiving and severe” SG regime that penalises employers harshly for being just one day late.
Lamenting the lapsing of the proposed SG amnesty, some industry experts have called for the government to consider a review of the SG regime to ensure it is more measured in its penalties approach.