In a statement today, the Minister for Revenue and Financial Services Kelly O’Dwyer said the Turnbull government will introduce a bill into Parliament this year that will ensure that contributions made under a salary sacrificing arrangement do not reduce their employer’s superannuation guarantee obligation.
This follows a recommendation from the Superannuation Guarantee Non‑compliance report to remove the loophole.
The report made a number of practical recommendations to improve employer’s compliance with their superannuation guarantee obligations, and was compiled by senior representatives from the ATO, the Treasury, the Department of Employment, ASIC and APRA.
“If Australians are to continue to have confidence in the integrity of the superannuation system, we must ensure employers are paying workers their full entitlements, whether they are wages or superannuation,” Ms O’Dwyer said.
The government also welcomed another outcome of the working group, which has been strengthening cross-agency collaboration to improve the superannuation system for Australians.
“The ATO has increased its focus on superannuation guarantee compliance and information sharing across agencies has improved. Agencies are committed to a continued focus on protecting employee rights and entitlements and providing a level playing field for employers,” said Ms O’Dwyer.
The government is carefully considering the remaining recommendations made by the working group report to ensure that any measures progressed will improve compliance without unduly burdening employers.
It’s about time. This should have been done years ago.
The “loophole” was closed on 1 July 2017 by the change to legislation that abolished the ‘10% test’ for personal contribution. If an employee has an employment contract that includes Salary Sacrifice super in the SGC calculation, they can simply stop salary sacrificing and make tax deductible personal contributions themselves.