Reconsider SG late payment penalty proposal: AIST
The Australian Institute of Superannuation Trustees (AIST) is urging the Government to reconsider its proposal to reduce the Superannuation Guarantee (SG) late payment penalty.
AIST argued the change will reduce the incentive for employers to pay mandatory SG payments on time.
Under the proposed changes, the SG charge will only be calculated on ordinary time earnings and interest will only be payable from the SG due date, significantly reducing the cost to non-compliant employers.
AIST executive manager for policy and research, David Haynes, said the system should reward employers who are good citizens and penalise employers who are bad corporate citizens.
"The penalty for not paying super on time should be substantially greater than the SG itself," Haynes said.
"The purpose of the charge is to encourage employers to meet their legal obligations, it is fundamentally a form of consumer protection."
According to AIST modelling, if an employer fails to pay an employee earning $1,140 in super per month on time they will be required to pay an additional $285. However, under the proposed changes, the amount due is simply the unpaid super amount, with a nominal admin charge added.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
