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29 Feb 2016

DPNs—know your SGC obligations


3 min

Lodge and ye shall be saved (or at least have the chance to avoid personal liability).

Some of you may have read our Gold Coast Partner, Jason Bettles' article “>Directors – Are you personally liable for unpaid superannuation?

In that article, Jason referred to the amended Director Penalty Notice (DPN) regime and the ability for the Australian Taxation Office (ATO) to issue company directors with a DPN.

In the last 12 months, we have found many directors were issued with a DPN in respect of outstanding superannuation both prior to and following our appointment as external administrators over their company, some providing 21 days for a director to take action in order to avoid personal liability (“non-lockdown”) and some providing no time and having immediate effect (‘lockdown”).

The question then generally arises as to how this could happen and we proceed to explain to them the lay of the land. The conversation generally concludes with “What lodgement” or “What is a Superannuation Guarantee Charge Statement” and ends with the usual statement of “if only I had known that was required”.

Here, we recap the position relating to superannuation and DPNs.

A company is required to complete a Superannuation Guarantee Charge statement if, within the relevant period, it did not pay sufficient superannuation contributions for its eligible employees by the quarterly cut-off date.

The cut-off date is on the 28th day of the month following each quarter (see table below) the company must pay an employee’s superannuation guarantee entitlement to their fund.

Table 1


Cut-off date

1 July – 30 September

28 October

1 October – 31 December

28 January

1 January – 31 March

28 April

1 April – 30 June

28 July

If superannuation guarantee contributions are unpaid by this date, directors must lodge the Superannuation Guarantee Charge statement and pay the Superannuation Guarantee Charge.

The due date is the date that the Superannuation Guarantee Charge statement is to be lodged, being one calendar month after the cut-off date and is outlined in the table below.

Table 2


Due date

1 July – 30 September

28 November

1 October – 31 December

28 February

1 January – 31 March

28 May

1 April – 30 June

28 August

The required form to be completed and lodged with the ATO is available here: Superannuation guarantee charge statement - quarterly (NAT 9599).

In summary, the DPN “lockdown provisions” work along the lines that if lodgement of the SGC Statement does not occur within three months of the due date (table 2)—the director penalty is permanently locked down automatically. The ATO can issue a DPN with immediate effect that cannot be discharged by appointing an administrator or liquidator.

If the client has lodged their SGC Statement on time (even if the payment hasn’t been made) then the DPN that the ATO can issue is required to provide 21 days in order for action to be taken.

The key message for both advisers and their clients is “lodge and ye shall be saved”.

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