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Superannuation Amnesty Will Let Bad Bosses ‘off The Hook’

Superannuation amnesty will let bad bosses ‘off the hook’

A Federal government proposal to pardon businesses that have cheated their employees out of superannuation over the past 25 years has been criticised as letting dodgy bosses “off the hook”.

The 12-month amnesty would mean employers won’t have to pay the fine imposed for non-payment of superannuation, which can be up to 200 per cent of the unpaid money.

Amnesty would apply from 1992 to 2018

It would apply to withheld superannuation contributions from July 1 1992 to March 31 2018, which means an employer who has kept money from an employee for 25 years would not face a penalty if they pay back what they owe within 12 months.

The intention of forgiving businesses who have done the wrong thing is to recover some of the $2.85 billion in super contributions that the Australian Tax Office estimates is still owed to workers.

Proposal rewards bad behaviour

But the proposal has been widely criticised by the Opposition and everyday workers, who believe it rewards badly behaving bosses who have stolen from their employees’ retirement.

Shadow Treasurer Chris Bowen said Labor would demand that the amnesty is removed from the proposed legislation.

“Only someone as out of touch as Malcolm Turnbull would reward dodgy businesses who have been robbing workers for 25 years,” he said in a statement.

Prime Minister Malcolm Turnbull told parliament the idea behind the legislation was to get more money for more workers.

“The legislation which is designed to recover over $200 million, hopefully more, of unpaid contributions, for the benefit of employees,” he said.

The Australian Tax Office estimates there is $2.85 billion in outstanding superannuation contributions.

Proposal ‘not fair’ to workers

As we recently reported, 31 year-old Victorian-based pharmacy assistant Daniel discovered his boss hadn’t been paying his super since 2013, and doesn’t believe businesses should be pardoned from paying the fine.

“It’s not fair.  If they’ve been doing the wrong thing for so long, why should the government now let them get away with it?” he said.

“And what about all the interest I have lost by not having that money in my account?  I’m paying the price for having my super stolen, while my boss doesn’t get penalised for ripping me off.”

Currently employers face fines of 200 per cent

Under the current system, employers who don’t pay compulsory super contributions have to pay an additional 20 per cent interest component.

They can also lose tax deductibility for the contributions, in addition to the fines of up to 200 per cent of the unpaid money.

Daniel contacted the Tax Office about his unpaid super in 2014, but an investigator only got back to him this year to confirm his boss is now paying back what he is owed through a payment plan, which means only around $30 a month is deposited into his Rest Super account.

In total Daniel is owed $15,000.

“They are being let off the hook.  They’ve done the wrong thing, so they should be penalised for that,” he said.

Government defends the policy

Financial Services Minister Kelly O’Dwyer defended the amnesty in Parliament.

“It is very clear that the government is not letting anybody off the hook from paying the superannuation guarantee entitlements that they ought to pay,” she said.

“Far from it.  This government has put in place a mechanism to allow small and medium-sized businesses, who otherwise have not paid superannuation guarantee entitlements, to come forward, under an amnesty, and make good every single dollar that they owe their workers.”

Amnesty could be good for workers

Miles Heffernan, Director of Litigation at Industrial Relations Claims, said he wasn’t against the idea of an amnesty.

“If it’s going to get workers the money they are owed in a shorter time frame, then that has got to be a good thing – as long as the employer is still made to pay the additional interest,” he said.

“Unfortunately, when bosses don’t pay super, the worker misses out on the compound interest those contributions would have been earning, which means by the time they retire, they have been robbed by tens of thousands of dollars.”


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