The Financial Planning Association (FPA) has backed legislative changes aimed at stopping unscrupulous employers from using their employees’ salary sacrifice superannuation contributions to reduce their superannuation guarantee obligations.
In a submission filed with the Senate Economics Legislation Committee dealing with the legislative changes, the FPA said that it had been arguing in favour of such measures for years.
In circumstances where salary sacrifice is a frequently-recommended tactic in wealth accumulation, the FPA said it had been pointing out the weakness in the current regime for more than a decade.
“The FPA has raised concerns about weaknesses in the current law in relation to employer payments of superannuation for nearly a decade, and we would encourage the Parliament to ensure these changes are implemented as quickly and efficiently as possible to protect employees wage entitlements,” the submission said.
The Government has introduced the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No 1) Bill, which includes amendments to the Superannuation Guarantee (Administration) Act 1992 to ensure that an individual’s salary sacrifice contributions cannot be used to reduce an employer’s minimum superannuation guarantee contributions.