Retirement
Super reforms shift up a gear
Labor’s attempt to prevent an amnesty it claims would let employers off the hook for superannuation failures has been shot down, with the legislation passing the lower house.
Super reforms shift up a gear
Labor’s attempt to prevent an amnesty it claims would let employers off the hook for superannuation failures has been shot down, with the legislation passing the lower house.
The legislation, announced by the Minister for Revenue and Financial Services Kelly O’Dwyer last month, would give employers who have underpaid super one year to sidestep the penalties if they pay out the owed money in full.
Employers who do not make the most of the amnesty will face higher penalties upon identification, to the tune of a minimum 50 per cent penalty on top of the charges owed.
Speaking at the time, Ms O’Dwyer said the amnesty gives employers an incentive to “do the right thing”.
The legislation passed the House of Representatives on Wednesday, despite opposition from Labor, with shadow treasurer Chris Bowen arguing, “We happen to think that non-payment of the superannuation guarantee is a serious breach of the law, should be dealt with accordingly and providing an amnesty … is exactly the wrong move.”
Upon its successful passage, Ms O’Dwyer accused Labor of voting “against workers”.
“Under the amnesty employers will not be off the hook – to use the amnesty they must pay all that is owing to their employees, including the high rate of nominal interest. Employers that do not take advantage of the one-off amnesty will face higher penalties when they are subsequently caught – in general, a minimum 50 per cent penalty on top of the super guarantee charge they owe.
“Today’s attempt by Labor to try to prevent Australians receiving superannuation payments they are owed through the one-off, 12-month amnesty, follows Labor’s refusal to commit to backing the government’s superannuation reforms announced in the federal budget.”
Ms O’Dwyer estimates the amnesty will see 50,000 people receive a total of $230 million back in super.
Laws to reunite low balance, inactive accounts introduced
The Turnbull government said today’s introduction into Parliament of the Treasury Laws Amendment (Protecting Your Superannuation Savings Package) Bill 2018 will herald a “range of reforms” shielding against the erosion of super balances through excessive fees and dubious insurance arrangements.
As outlined in the 2018-19 federal budget, the bill will stop super fund trustees from charging fees greater than 3 per cent on accounts with balances of less than $6,000. It will also disallow exit fees charged when members close their account or leave their fund, Ms O’Dwyer said in a statement.
The bill requires insurance be provided on an opt-in basis for new members younger than 25, members with balances of less than $6,000 and those with inactive accounts. Accounts with balances of less than $6,000 that have been inactive for 13 months will be directed to the Commissioner of Taxation, who will then transfer the money into the owner’s active account.
“This will increase the rate of account consolidation across the superannuation industry, reduce the number of inactive low‑balance accounts at risk of erosion and reduce insurance premium and fee duplication for many members,” Ms O’Dwyer argued.
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