The Australian Prudential Regulation Authority (APRA) and the Australian Taxation Office (ATO) have issued a circular directed at employers that explains their obligation to send employees' voluntary superannuation contributions promptly to the nominated superannuation fund.

The Superannuation Industry (Supervision) Act 1993 (SIS Act) requires employers to remit voluntary employee contributions to the superannuation fund within 28 days of the end of the calendar month in which they were deducted. This obligation prevails over any contrary provision in specific awards applicable to employers.

Changes made earlier this year to section 64 of the SIS Act mean that failure to comply can now be treated either as a strict liability offence (that is, it need only be proven that a particular outcome occurred) or as a fault liability offence (where intention must be proven).

The penalty if the offence is proven on the strict liability basis is up to $5,500 for an individual employer or $27,500 for a company.

The penalty is twice that if proven on a fault liability basis.

APRA superannuation circulars are generally addressed to trustees and industry participants and explain APRA's interpretation of the legislation. Superannuation Circular No. I.A.2 "Section 64 of SIS - Prompt Remission of Contributions" was developed after extensive consultation with industry and was issued jointly with ATO, the regulator of self-managed superannuation funds.

The circular is particularly relevant to employers in complying with their obligations and avoiding unintended breaches. It discusses the responsibilities of employers and trustees in situations where employees have authorised the employer to deduct voluntary contributions from their (usually) after-tax salary or wages. It also provides guidance on good practice to ensure compliance.

APRA Superannuation circulars can be found in the Superannuation section of our website

For further information contact:

Gloria Peterson
Public Affairs Manager
02 9210 3385