DeutscheAsset Management has welcomed a new practice note issued by the Australian Taxation Office on the manner in which employers should meet their superannuation guarantee (SG) obligations as having struck “a reasonable balance”.
The ATO has issued a Practice Statement PS LA 2004/1 concerning the notification requirements that employers have to meet for superannuation guarantee purposes.
Sub-section 23A(3) of the Superannuation Guarantee Administration Act provides that the employer must report the contribution to the employee within 30 days of making the contribution.
In the Practice Statement, the ATO notes that for practical purposes it will regard employers as having adequately complied with sub-section 23A(3) for a quarter if they give the relevant reports to their employees within 30 days of the final contribution being made for all employees for that quarter.
Each report must be in writing and at least include the following information:
n the amount of the contributions; and
n the name of the superannuation provider; and
n where the employer holds the information, the employee’s account or membership number.
There is no specific format required for the report. Examples of formats the employer may use include the following, so long as the required information is included in every case:
n a letter to the employee;
n email, if the employee consents to receiving reports electronically;
n a written notification from the employer’s business software package, eg. a payslip stating that contributions have been made to the fund as detailed on the payslip;
n if available, a copy of a receipt for contributions from the superannuation provider.
According to Deutsche, these reporting changes flow from the transition to quarterly SG contributions.
It says that in the Practice Statement the ATO says the following:
“The policy objective of the amending Act, as outlined in the Explanatory Memorandum (EM), is to encourage employers to make regular contributions by improving the application, efficiency and effectiveness of the superannuation guarantee system, while not imposing significant additional costs on employers.”
The EM also stresses the importance of “early identification of non-compliance amongst employers”.
A fine of up to 30 penalty units (1 penalty unit = $110) may be imposed on an employer who is convicted of failing to report a contribution.
“We consider that the flexible approach of regarding employers as meeting their reporting obligations where they give employees at least one written report for each quarter within 30 days after the final contribution has been made for that quarter strikes a reasonable balance between allowing sufficiently early identification of non-compliance by employers and keeping costs for employers to reasonably low levels.”
