Government to shut down salary sacrifice loophole

The government has announced it will remove a loophole from legislation that allows unscrupulous employers to use their employee’s salary sacrifice contributions to pay their Superannuation Guarantee obligations

     

 

The government has announced it will remove a loophole from legislation that allows unscrupulous employers to use their employee’s salary sacrifice contributions to pay their Superannuation Guarantee obligations.
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.

 

STAFF REPORTER
14 July 2017
www.smsfadviser.com

  • State and Federal COVID-19 support

    The following links are to the latest state and federal government plans, schemes, programs, and initiatives to help businesses and individuals manage the impact of yet more COVID-19 restrictions.

  • Lockdowns and mental health

    Victoria endures its sixth lockdown as the state's cases grow; NSW records 1,281 new local COVID-19 cases and three deaths. Lockdowns to be eased once 70% of the population is double vaccinated against COVID-19 yet today some 60% of Australians are in lockdown.

  • The rise of the female investor

    While society continues to grapple with the factors driving gender and pay inequity, women are proactively turning to investing more than ever before. And in doing so, they are demonstrating a very competent and sensible approach to building up their wealth outside of superannuation.

  • ATO flags availability of COVID-19 early release super recontribution

    Individuals can now recontribute amounts they withdrew under the COVID-19 early release of super program.

Read more latest Financial Planning news articles

General Advice Warning

The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Retirewell Financial Planning nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.