RA Business Advisors

superannuation

ATO Waving Penalties For Unpaid Superannuation Payments

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The ATO will be waiving penalties for the hundreds of businesses who have admitted failures to pay superannuation to their staff after a ‘botched’ amnesty.

An amnesty was rolled out in May of 2018, which offered employers who failed to pay super entitlements stretching back to the 1990s a “clean slate.” Unpaid super is estimated as being worth up to a whopping $6 billion a year in Australia, with the government hoping this initiative would encourage employers to pay their workers super entitlements. 

While the policy has been dumped, the amnesty for employers will still run for 12 months. Anyone failing to use this amnesty as a time to declare their past wrongdoings is warned they will face penalties in the future to the sum of half the money owed, on top of the unpaid super. 

Employers who have already made claims to the ATO are being treated as though they had voluntarily reported themselves under current rules. This means they must repay unpaid super as well as interest to the employee and an administration fee per employee of $20 per quarter. 

To be eligible for the superannuation amnesty, businesses will need to:

  • Not be subject to an audit of your Superannuation Guarantee (SG) for the relevant periods 
  • Voluntarily disclosed amounts of SG shortfall or late payments that have not been previously disclosed for any period from 1 July 1992 to 31 March 2018 
  • Made the voluntary within the proposed 12-month amnesty period (24 May 2018 to 23 May 2019) 

If you are unsure whether you are meeting your superannuation requirements effectively, give us a ring on 07 3367 0852 or email us at mail@raaccountants.com.au 

Downsizer Contributions – Is It Time To Sell Your Home?

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Downsizer contributionsAs of July 1 2018, super funds are now able to accept downsizer contributions from their members. The federal government introduced the initiative to help relieve housing affordability pressure, encouraging seniors to relocate to smaller homes.

What is a downsizer contribution?

Downsizer contributions were introduced as an easier means for those selling their home to deposit up to $300,000 into their super fund from the sale. These are available for those who are 65 years old or older and meet the eligibility requirements. Until the total balance is re-calculated, the contribution doesn’t affect total super balance.

How do I make a downsizer contribution?

There are 7 eligibility requirements you must satisfy, if you meet the 65+ age requirement:

  • The contribution must be from the proceeds of selling your home, where contract of sale was exchanged on or after July 1 2018.
  • The home was owned by you or your spouse for 10 years or more prior to the sale.
  • Your home is in Australia and is not a caravan, houseboat or other mobile home.
  • Proceeds from the sale of the home are either exempt or partially exempt from CGT under the main residence exemption or would be entitled to this exception if the home was a CGT rather than a pre-CGT asset.
  • You have completed the downsizer contribution into super form before or at the time of making downsizer contribution.
  • The downsizing contribution is within 90 days of receiving the proceeds of the sale.
  • You haven’t previously made a downsizer contribution for another home.

What are the benefits of making these contributions?

There are two main benefits from making these contributions – the amount doesn’t count towards contribution caps or total superannuation balance for the financial year. The contribution also doesn’t have the standard ‘work test’ for voluntary contributions attached to it, which applies to Aussies aged 65-74. Members should be aware that downsizer contributions are not deductible.

However, members who are receiving/hoping to receive the Centrelink aged pension should be vigilant for the impact this has on eligibility. Assets within a super fund contribute towards the asset test which determines eligibility to receive a pension, once at pension age.

If you are an SMSF with members starting to ask about downsizer contributions and don’t feel prepared, give us a call! We are experts in SMSF and small business; we can help you meet your customer needs without sacrificing your own.

Single-Touch Payroll: How Is It Going To Change Things For You?

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While the name may suggest some weird form of physical payroll, single-touch payroll (STP) is a new initiative from the ATO which came into effect at the start of this financial year. STP is currently applicable for employers with 20 or more employees. However, STP will also be used for employers with fewer than 20 employees from the start of next financial year.

single-touch payroll

 

What is single-touch payroll?

STP enables employers to report salary or wages, PAYG withholding and super information directly to the ATO at the same time they pay their employees. STP will send a copy of these to the ATO automatically when these are sent to the employee. The system is designed to make reporting easier for employers, as well as addressing the unpaid superannuation crisis.

How do I report through STP?

Reporting is easy as the process of STP is automatic, once your reporting software is STP-enabled. Before lodging your first report, make sure you authorise people to lodge reports on behalf of your business. As well as checking if you are in need of an AUSkey, this identifies you as the representative for your business when using online government services.

There are some payments which cannot be reported through STP, these include:

  • payments that are generally not paid through a payroll process;
  • payments made by payers to recipients that are generally not their employees

Are there any issues that could arise from STP?

As long as you are up-to-date on your super payments there is no need to worry. However, for smaller businesses that don’t pay super on time due to limited cash flow, consider breaking down these payments to be more regular to meet your obligations under STP. If you’ve missed superannuation payments in the past, there is an amnesty period until May 2019 to rectify any past non-compliance without penalty. Grievances can be backdated as far as 1992, so make sure you are on top of your superannuation!

Are there any benefits for employees?

Peace of mind. Through establishing the STP system, the ATO will get a report every time an employee is paid and will be able to instantly verify the superannuation payments are up to date. Employees will also be able to complete Super Choice forms and TFN declaration forms through their myGov account.