The Australian Taxation Office (ATO) welcomes the release of the Australian National Audit Office’s (ANAO’s) report of the Addressing Superannuation Guarantee (SG) Non-compliance audit. The ANAO report supports the ATO’s adoption of more preventative and proactive approaches to improve SG compliance.
The ATO takes non-compliance with SG obligations extremely seriously and has a focussed review and audit program into the non-payment of the SG. The ATO’s SG compliance program for 2020–21 completed almost 20,000 cases and raised almost $900 million in liabilities. In 2020–21 the ATO distributed almost $950 million of superannuation entitlements to individuals and super funds. The ATO estimates that over 94% of SG obligations are met by employers without direct intervention, and the ATO is highly focused on reducing the unpaid 'gap'.
To help employees to confirm in real time that their super is being paid, the ATO has increased the visibility of employer superannuation contributions through myGov and the ATO app. The ATO also continues to investigate every complaint received in relation to the non-payment of SG. The ATO takes firm action where non-payment is identified. This includes the imposition of tax and super penalties, as well as the recovery and back payment of superannuation to employees. The ATO is also increasing transparency to affected employees of compliance activities and employer payment plans so that affected employees are aware of the expected timing of back payments of superannuation.
The ANAO audit focused on whether the ATO has an effective risk-based SG compliance framework, and whether ATO compliance activities are effective in achieving greater employer compliance with their SG obligations.
The ANAO report includes 3 recommendations around the implementation of a preventative compliance strategy, enhanced performance reporting, and the increased use of enforcement and debt recovery powers.
The ATO has already begun implementing a preventative compliance strategy enabled by fusing new data sources like Single Touch Payroll reporting and regular reporting from super funds. The ATO is currently undertaking a risk-based approach to managing SG non-compliance, and this includes preventative measures. The ATO expects to continue prioritising a preventative approach while strengthening its data capability.
The ATO agrees with the recommendation of setting targets for SG performance measures such as the SG gap and including explanations for performance results. The SG gap is an estimate of the difference between the total amount of SG payments employees receive and what they would have received if every employer met their obligations in full. The ATO aims to sustainably reduce the SG gap and intends to bolster its current measurement and publication of gaps more broadly. It is noted that gaps are estimates and can vary year to year due to factors besides ATO performance or compliance activities. These include external factors, changes in policy, and changes in methodology or assumptions.
The ATO agrees with the recommendations around debt recovery and increased use of its powers. While the ATO appropriately paused much of its firmer recovery actions through the COVID-19 pandemic, these have now recommenced. All debt recovery action is tailored to the client’s specific circumstances. While our ordinary focus is generally on taxpayers with higher debts, taxpayers with superannuation guarantee debts are prioritised irrespective of their debt value.
The ATO will further reflect on the findings of the report in continuing to refine and improve our efforts to address SG non-compliance.
ATO statement in response to Australian National Audit Office's (ANAO's) audit of our efforts to address Superannuation Guarantee non-compliance.