Superannuation and Director Penalty Notices

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The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 commenced on 1st April 2019, having received Royal Assent on 1 March 2019.

The Act amends the reporting timeframes for superannuation relating, to Director Penalty Notices (“DPN”), and the effect of the timing for reporting of Superannuation entitlements of employees by Company Employers.

There has been no change for PAYG and the three-month from due date rule continues to apply.

The new law eliminates the three (3) month from the due date rule for superannuation reporting only. The Superannuation amounts must be reported by their due date ( i.e. within 28 days of the end of each quarter) and not the former three (3) month from due date, otherwise the Directors liability is locked down , and Directors lose the opportunity to avoid personal liability.

Just to recap on the DPN Regime prior to 1st April 2019:
• Directors of a company can be held personally liable for the PAYGW and Superannuation amounts payable by a company if the amounts are not reported within three (3) months of their due date.
• A DPN may take the form of a Lockdown DPN or Non-Lockdown DPN
• If reported, but left unpaid, a Non-Lockdown DPN, gives Directors remission options including:
1. Paying the debt;
2. Appointing a Voluntary Administrator; or
3. Placing the company into Liquidation under a Creditors Voluntary Liquidation.
• If unreported, a Lockdown DPN will not provide the Non-Lockdown remission options above and the amount becomes a debt due by both the company and its directors.
• If amounts relating to PAYGW and Superannuation are at least reported within three (3) months of their due date, but no actual remittance of the sums due, then the directors escape personal liability on the proviso that the company takes the action referred to above within the 21 days referenced in the DPN.
Ron Brideaux
1 April 2019