Hi - we inadvertently through a misunderstanding of process had 2 of our quarterly super payments bounced back and was not made aware until the ATO contacted us to say we had failed to meet our obligations. The initial communication said to ignore if payment had been made. At first I thought they had made a mistake because I ALWAYS pay our super in time, but when checking back discovered the missed payments. I immediately reinstated the 2 quarters and made payment via our clearing house. A week later we received further communication from ATO saying we had to complete SGC form which can only be completed by paying the super again (as well as interest/admin). This means the owed super will be paid twice (once via clearing house, once via SGC). When I spoke to ATO they could not explain how we could recover the 2nd super amount except to refer me to the ATO information page which outlines how to use late payment super offsets. WE are only a small family business - I am not trained in all this - and I cannot work out from the information we were referred to how to reclaim the excess payment. Specifically - can it be offset against any employee as most of the original ones no longer work for us? Do I need to advise clearing house (which is tied to our STP) that next quarter is paid via SGC so it does not forevermore show a super liability? I do feel very hurt that this has all been imposed on our business which has always done the right thing with no flexibility for an honest mistake.
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3 replies
Oh, sorry, didn't realise that was your question, @Ninhen ðŸ¤
There are two options when you have made "contributions in error":
- Advance - as per the SGAA 1992, Section 23(7) that states you can use the SG you've "pre-paid" for up to 12 months from the beginning of the quarter (if you will be making OTE payments to the employee and have the cash to wait):
- A contribution to a complying superannuation fund or an RSA made by an employer for the benefit of an employee may be taken into account under this section as if it had been made during a particular quarter if the contribution is made not more than 12 months before the beginning of the quarter.
- Recovery - as per the APRA SPG 270 Sections 24-36, Contributions in Error can be requested back from the super fund. Contact the specific funds, explain about a contribution in error issue and ask them what they need to refund you the money. This is used by my customers every pay when the employee is terminated, no OTE will be paid in a year or they need the cash flow!
- WARNING: experience has taught us that super funds take, on average, 3 months to pay the money back to you!
Yes, always good to understand the process FIRST!
Deanne
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Hiya @Ninhen 👋
This is how every employer in Australia feels about being held accountable for SG payments using data from employees, many times wrong or out of date, over which the employer has little or no control. That's the way the ATO designed their super guarantee process. None of us are thrilled. Most employers in this situation are there due to "an honest mistake" but the ATO process is designed as if we are all deliberately trying to rip our employees off.
All of us are in the same boat of "I am not trained in all this" and we rely on the ATO guidance to help us navigate through their convoluted process. You are in good company, we're all in this together.
The ATO guidance on SG late payment offset is pretty clear and easy to follow. They have examples that are relevant, too. Read it all thoroughly first, then start from the beginning and go slowly so you don't miss anything.
If you are uncertain, reach out to your BAS/Tax Agent for assistance. They will follow the ATO guidance too.
Deanne
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