About $588 million will flow into worker nest eggs after tens of thousands of employers came forward to admit shortchanging staff under the Morrison government’s superannuation guarantee amnesty program.
More than 390,000 workers are expected to benefit from the scheme, which offered business owners a one-off opportunity to fess up to super underpayments without penalty so long as they agreed to repay workers with interest.
According to interim Australian Taxation Office (ATO) data, about 24,000 employers came forward to disclose underpayments, more than half (55%) of which rushed in during the final week of the scheme, with about 7,000 applications lodged on the last day, September 7.
Announced by the Coalition government in 2018, the amnesty program was designed to encourage businesses to confess to underpaying worker entitlements before penalties for non-payment were significantly increased, with the introduction of single touch payroll (STP) empowering tax office enforcement efforts.
The amnesty period went back to the introduction of compulsory superannuation in 1992, requiring businesses to pay a 10% interest charge for each year their super payments were in arrears.
Workers will have repaid super transferred into their super accounts, or if they’ve stopped working, directly into their bank accounts. Already, $440 million has been transferred to super funds, including $132 million in interest payments.
Assistant Minister for Superannuation, Financial Services and Financial Technology, Jane Hume, said the initiative has been “very successful”.
“We know that in the past, calculating the super guarantee has been very complicated. The Superannuation Amnesty prompted honest businesses to take a look back through their records and check they’d done the right thing by their employees,” Hume said in a statement.
“The Superannuation Amnesty has been a very successful initiative, reuniting Australians with money that in many cases, they didn’t even know they were owed.”
While the program is slated to return more than half-a-billion dollars in unpaid super to workers, it is but a portion of the estimated total superannuation gap.
About $2.3 billion worth of superannuation payments weren’t made in the six years between 2011-12 and 2016-17, according to ATO estimates.
This story first appeared on SmartCompany and has been republished with permission.