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Monday, 3 November 2003
Page: 21834


Ms Jackson asked the Treasurer, upon notice, on 19 August 2002:

(1) How many employers are estimated to be (a) non-compliant and (b) partially compliant with their legal obligation to pay superannuation guarantee contributions (SGC) for their employees under the Superannuation Guarantee (Administration) Act.

(2) How many employers are estimated to be covered by the Act.

(3) How many employees are estimated to have not received the superannuation guarantee contribution from their employer to which they are legally entitled.

(4) How many complaints did the Australian Taxation Office (ATO) receive from employees regarding the non-compliance or partial compliance of their employers with the Act each year since 1992.

(5) How many of the complaints received by the ATO were resolved with full payment by the employer of all outstanding SGC monies, each year since 1992.

(6) From the time when a complaint is made to the ATO by an employee regarding non-payment of SGC monies, what is the average time it takes the ATO to contact the employer for the monies.

(7) How long on average does the ATO give an employer to pay outstanding SGC monies owing to an employee.

(8) How long on average from the time the ATO contacts an employer for outstanding SGC contributions, does it take the ATO to lodge a prosecution against the employer if the employer does not pay.

(9) How many employees are estimated to have lost their superannuation guarantee entitlements because their employer has gone bankrupt or into receivership since 1992.

(10) How many employers are estimated to have not paid their employees superannuation guarantee contributions because they have gone bankrupt or into receivership since 1992.

(11) How many prosecutions against employers for non-payment of some or all superannuation guarantee contributions were successful, for each year from 1992.


Mr Costello (Treasurer) —The Minister for Revenue and Assistant Treasurer has provided the following answer to the honourable member's question:

(1)-(11) The number of employers covered by the Superannuation Guarantee (SG) regime is estimated to be 900,000.

Independent SG compliance surveys have, historically, been commissioned by the ATO. Information in relation to employer compliance with the SG can be found in the relevant Annual reports published by the Commissioner of Taxation.

In the period 1 July 1996 to 31 July 2002 there have been notifications of insufficient contributions made in respect of 42,588 employers. The actual number of employee complaints in this period would exceed this figure, as complaints against employers are often received from more than one employee.

As a general rule, an employer is contacted within 14 days of an employee notification of insufficient contributions being lodged. A final notice is issued 30 days after the SG debt is raised. A notice of impending legal action is issued approximately 30 days after this final notice where debts remain outstanding.

Legal action is commenced where payment is not received or there is no satisfactory arrangement to pay in place. The period before legal action is commenced is dependent on many factors.

During the period 10 September 1995 to 31 August 2002 there were a total of 3459 cases where “legal action” involving the courts was taken in relation to Superannuation Guarantee Charge (SGC) debts. Information regarding the success of these actions, where the matter has actually been resolved through the courts, is not readily available from ATO records but is a matter of public record.

Information regarding the number of complaints resolved with full payment by the employer of all outstanding monies is not readily available, and in any event would be potentially misleading. It should be noted that not all complaints received by the ATO indicate that an employer has failed to make superannuation contributions. Some complaints arise because employees are unaware of the destination of their superannuation contributions. To combat this problem the Government has amended the SG regime to require employers to advise employees of the destination of superannuation contributions made to accumulation funds (from 1 July 2003).

It is not possible to accurately estimate the number of employees who have not received the superannuation guarantee contributions to which they are legally entitled, as the SG system is a self-assessment system. Whilst the ATO does conduct audit activities, the main sources of information about employer non-compliance are sourced from employees, employer self-assessments and broad based research conducted from time to time - all of which indicate a high level of employer compliance.

No estimate of the number of employees who have lost their SG entitlement due to employer bankruptcy or receivership is available. This is because no information is collected by the ATO in relation to superannuation contributions that have not been paid prior to bankruptcy or liquidation.

The ATO is only empowered to act to collect the Superannuation Guarantee Charge (SGC) when an employer has failed to make the appropriate contributions by 28 July following the end of the relevant financial year. The ATO cannot act on unpaid contributions where the SGC debt has not crystallised. Any estimate would therefore be misleading. The Government has recently moved to require employers to make a minimum of quarterly superannuation contributions, to reduce the amount of superannuation contributions at risk should an employer become insolvent.

For the same reasons, the number of employers that may have failed to make contributions because of insolvency is unknown.