Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon John Dawkins, M.P.)Chapter 7 Collection and Recovery of the charge
Overview of the Chapter
This chapter sets out the process for collection and recovery of the superannuation guarantee charge. It deals with the due date for payments and the powers the Commissioner has to recover unpaid superannuation guarantee charge.
Explanation
When the superannuation guarantee charge becomes payable
The due date for payment of the superannuation guarantee charge is the same as the date of assessment (see chapter 5). That is, either:
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- 14 August if the employer lodges the superannuation guarantee statement on or before that date; or
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- the day the statement is lodged, if the employer lodges the statement after 14 August.
Therefore, if an employer lodges a superannuation guarantee statement on or before 14 August in the following the year, the superannuation guarantee charge becomes payable on 14 August. However, if the employer lodges the superannuation guarantee statement for a year after 14 August in the following year, the superannuation guarantee charge becomes payable on the day on which the statement is lodged. [Clause 43]
The due date for payment of superannuation guarantee charge arising from a default assessment is 14 August in the year following the year to which the assessment relates. [Subclause 33(3)] The due date for payment of an amended assessment is the same as the date for payment of the original assessment. [Subclause 34(7)]
If an employer fails to pay by the due date, the employer will be subject to a late payment penalty. Also, the employer may be liable for additional superannuation guarantee charge for failure to provide a superannuation guarantee statement by 14 August, even though the due date for payment is not until the statement is lodged (see chapter 9).
When additional superannuation guarantee charge becomes payable
The due date for additional superannuation guarantee charge (other than for late payment) is the date specified in the notice of assessment of the additional superannuation guarantee charge. [Clause 44]
The due date for late payment penalties is the date that the outstanding superannuation guarantee charge is paid. The determination of additional superannuation charge is discussed in Chapter 9.
The Commissioner may extend the time for payment of an amount of superannuation guarantee charge beyond the date of lodgement of the employer's superannuation guarantee statement. However, late payment penalty will be imposed.
Similarly, the Commissioner may extend the time for payment of additional superannuation guarantee charge. [Clause 45]
Recovery of the superannuation guarantee charge
The superannuation guarantee charge (including any penalties) payable by an employer will be a debt due to the Commonwealth and must be paid to the Commissioner. The Commissioner or Deputy Commissioner will have authority to sue for recovery of the superannuation guarantee charge in a court of competent jurisdiction. [Clause 47]
When taking recovery action, if the Commissioner is satisfied that the employer is absent from Australia and has no attorney or agent in Australia, or the employer cannot be found, the Commissioner is still able to serve a document on the employer. Service may be effected by posting the document or a sealed copy of it to the employer's last known private or business address in Australia. [Clause 48]
Recovery of charge from the trustee of a deceased employer
If an employer has died, and no superannuation guarantee charge has been assessed or paid, the trustee of a deceased employer's estate will be required to lodge any statements and information which the Commissioner may require in order to determine the deceased employer's outstanding superannuation guarantee charge (including additional superannuation guarantee charge).
The Commissioner has the same powers and remedies for assessment and recovery of superannuation guarantee charge after the date of an employer's death as existed before it. Therefore, the Commissioner may issue a default assessment and may impose penalties on the trustee.
The superannuation guarantee charge payable by the trustee is a charge on the employer's estate in the trustee's hands in priority to all other debts (other than a charge in relation to a debt payable to the Commissioner). [Clause 49]
Recovery of charge from unadministered deceased estates
The Commissioner will be able to recover superannuation guarantee charge owing by a deceased employer where probate has not been granted. The Commissioner can effectively make a default assessment of the amount of superannuation guarantee charge up to the date of death.
Where such an assessment is made, the Commissioner must publish notice of the assessment twice in a daily newspaper circulating in the State or Territory in which the deceased employer resided. A person who claims an interest, or subsequently has an interest, in the deceased employer's estate, has the same objection, appeal and review rights as the deceased employer. [Clause 50]
Collection of the superannuation guarantee charge from a person owing money to an employer liable for the charge
The Bill contains garnishee provisions similar to those contained in other taxation laws - for example, section 218 of the Income Tax Assessment Act 1936.
The Commissioner will be authorised to collect the superannuation guarantee charge and other specified debts owing by an employer from any person who, broadly, owes money to the employer or has authority to pay money to the employer without having regard to recovery proceedings through a court. The debts which may be collected in this way include:
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- the superannuation guarantee charge;
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- additional superannuation guarantee charge (see Chapter 9)
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- a judgment debt or costs in relation to the superannuation guarantee charge or additional charge;
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- any fine or costs imposed by a court for an offence against the Bill;
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- any amount ordered by a court to be paid by a person to the Commissioner, for an offence against the Bill. [Subclause 51(12)]
To facilitate the collection of these debts, the Commissioner is authorised to give a written notice to a 'debtor' to pay the 'garnisheed amount' to the Commissioner at or before the 'payment time'.
A 'debtor' is a person:
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- who owes, or may subsequently owe money to an employer; or
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- who holds, or may subsequently hold, money for or on behalf of an employer, or for or on account of another person for payment to an employer; or
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- who has, or may subsequently have, authority from another person to pay money to an employer.
The 'garnisheed amount' is an amount equal to :
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- the whole of the money, or so much of it as is sufficient to pay the superannuation guarantee charge owed by the employer, whichever is the lesser; or
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- the amount specified in the notice ot be paid by instalments out of each payment to be made to the employer, until the amount of the superannuation guarantee charge is paid.
The 'payment time' specified in the notice cannot be retrospective. [Subclause 51(1)]
{Editor's Note - this text was missing from the original published EM and is now included for completeness -
The money will be treated as being due to a person or repayable on demand not withstanding that some precondition for the obtaining of - }
the money (e.g., the production of a passbook) has not been fulfilled. [Subclause 51(10)]
The Commissioner may revoke or vary a notice for collection of a debt by giving a further notice in writing. [Subclause 51(2)]
The Commissioner is required to give any notices to the debtor together with copies to the employer. [Subclause 51(3)]
Any person making a payment pursuant to a notice is deemed to have been acting under the authority of the employer and is indemnified in respect of the payment. [Subclause 51(6)]
If an employer makes any payment for the outstanding superannuation guarantee charge before payment is made by a person who has been given a garnishee notice, the Commissioner must revoke or vary the original notice by giving a further notice. [Subclause 51(7)
The garnisheed amount is treated as a debt due to the Commonwealth and as such is recoverable in a court of competent jurisdiction. [Subclause 51(8)]
Where money is on deposit in a building society account the deposit may technically constitute part of the share capital of the society. In such a case, a withdrawal would constitute the redemption, cancellation or withdrawal of that share capital. In order to treat building society accounts on the same footing as investments in other financial institutions, the money on deposit will be taken to be money that is due or that may become due by the building society to the depositor. It follows that the money is available to satisfy any outstanding superannuation guarantee charge. [Subclause 51(9)]
If a garnishee notice is to be given to the Commonwealth, a State or Territory, the notice may be given to a person who under a law of the Commonwealth, a State or Territory has a duty of disbursing public money. [Subclause 51(11)]
It is an offence for a person to fail to comply with a notice under the garnishee provisions. The maximum penalty is a fine of $1000. If a person is convicted of such an offence the court may, in addition to imposing a penalty, order the convicted person to pay to the Commissioner the amount in default. [Subclauses 51 (4) and 51(5)]
Public officer of a company or trust estate
For the purposes of the Income Tax Assessment Act 1936, every company carrying on business or deriving property income in Australia must, unless specifically exempted, have a public officer. Similarly, a trust estate must have a public officer where the trustee is not a resident of Australia.
A public officer under the Income Tax Assessment Act (see sections 252 and 252A of that Act) will be a public officer for the purposes of this Bill. The address for service of the public officer under that Act is also the address for service under this Bill. [Subclause 52(1) and 53(1)]
The public officer is answerable for all things required to be done by the company or trust estate under the Bill, and in the case of default, is liable for the same penalties. [Subclause 52(3) and 53(3)]
Likewise, everything required to be done by a public officer in that capacity will be taken to have been done by the company or trust estate. [Subclauses 52(4) and 53(4)]
The company or trustee is deemed to be liable jointly with the public officer for any penalty imposed on the public officer as a result of any proceedings taken under this Bill. [Subclause 52(6) and 53(6)]
The service of any notice or other document at the address for service of the public officer, or on the public officer, is sufficient service on the company or trust estate. If there is not a public officer at any time, service on any person acting or appearing to act in the company's or trust's business is sufficient. [Subclause 52(2) and 53(2)]
If at any time there is no public officer, the Bill applies in relation to the company or trust estate as if there were no requirement to appoint a public officer. This ensures that the company or trustee are not excused from complying with the Bill merely because they have failed to appoint a public officer.[Subclauses 52(5) and 53(5)]
Despite the above, if the Commissioner thinks fit, any notice, process or proceeding under the Bill may, instead of being served on or brought against the public officer, be served on or brought against any director, secretary or other officer of the company, or attorney or agent of the company or trust. In such a case, that person has the same liability in relation to the notice, process or proceedings as the company, trust estate or public officer would have had if it had been given or brought against the company, trust estate or public officer. [Subclauses 52(7) and 53(7)]