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Re: Help with an interaction between overpayment of super and late payment of super

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Enthusiast

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I'm assisting a friend who runs a not-for-profit, and who has misunderstood his superannuation obligations in the past. There have been a total of seven quarters in the organisation's history where super was paid late for at least one employee. We are in the process of filling in the SGC forms now, but there is a complicated interaction that I haven't been able to figure out, and would greatly appreciate any help with.

 

The interaction arises from the fact that one of the employees, through an administrative error, was double paid superannuation for a period of 9 months, which wasn't noticed until recently. As I understand it, late payments of superannuation can be used as a prepayment for a later quarter if the start of that quarter is within twelve months of the payment. So I have the following questions:

 

1. Can unintentional overpayments also be used a prepayments for later periods within 12 months?

2. Can these prepayments be chained together in such a way that the original overpayment is a prepayment for the first late quarter, the first late payment is a prepayment for the second late quarter, etc.?

3. Does he need to do anything to declare that a payment is a prepayment? I keep reading in ATO how-to's that late payments can be used as prepayments for future periods, but it never explains the details of how that works.

4. Because payments have continued to be made in the right amounts (just later than they should have been), this super fund of this overpaid employee has the same surplus above minimum requirements as when the overpayment was initially made. My friend wishes to apply to the super fund to get that money refunded on the grounds that it was made due to an error. If the money is refunded, does that void the ability to use it as a prepayment, or does the refund "come from" the amount that remains overpaid in the current period.

 

I appreciate any insight I can get into this problem!

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Devotee

Replies 1

Hi @WeirderQuark

 

Working out the super guarantee charge and late payment offsets can be very complicated.

 

Essentially, with respect to completing SGC statements, there's no inherent link you have to maintain between a super payment and a period. Which is to say that you can ignore the original 'intention' as to which period a payment was meant for and apply any payments made to whichever period suits best - either as an on-time payment, late payment offset or to carry forward, depending on the date of the payment.

 

So to answer your specific questions, unintentional overpayments can be used as late payments for a previous quarter or carried forward to a future quarter as appropriate (you just can't use the same payment for both). Similarly, any refunds from a super fund could be applied to any payments as appropriate (noting that a refund has the effect of some payments having never been made). There's nothing to declare as such when completing SGC statements; however, you must have clear records of how everything was calculated and applied.

 

Have you looked at the SGC statement calculator tool on the ATO website? (There are instructions here)

 

This page on the ATO website might also be helpful:

Late payments

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

2 REPLIES 2
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Most helpful response

Devotee

Replies 1

Hi @WeirderQuark

 

Working out the super guarantee charge and late payment offsets can be very complicated.

 

Essentially, with respect to completing SGC statements, there's no inherent link you have to maintain between a super payment and a period. Which is to say that you can ignore the original 'intention' as to which period a payment was meant for and apply any payments made to whichever period suits best - either as an on-time payment, late payment offset or to carry forward, depending on the date of the payment.

 

So to answer your specific questions, unintentional overpayments can be used as late payments for a previous quarter or carried forward to a future quarter as appropriate (you just can't use the same payment for both). Similarly, any refunds from a super fund could be applied to any payments as appropriate (noting that a refund has the effect of some payments having never been made). There's nothing to declare as such when completing SGC statements; however, you must have clear records of how everything was calculated and applied.

 

Have you looked at the SGC statement calculator tool on the ATO website? (There are instructions here)

 

This page on the ATO website might also be helpful:

Late payments

 

JF

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time.

 

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Enthusiast

Replies 0

This helps tremendously, thank you! Your reply has filled the holes in my understanding of the process, and I now know how best to proceed in this case.