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05 Nov 12 Superannuation guarantee: nominal interest component - Re Australian Medical Services Pty Ltd

The AAT has, with regret, affirmed the Commissioner’s decision to impose a nominal interest charge on an employer who had failed to provide the minimum level of superannuation support in respect of four quarters, and had subsequently made superannuation guarantee contributions for its eligible employees for those quarters but was late in making those contributions. The Commissioner calculated the nominal interest component as running from the beginning of the relevant quarter until the date of the Commissioner’s default assessment, as required by s 31 and s 46 of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA), even though the employer had paid the shortfall amount and the administration component well before the date of the default assessment.

The AAT noted that the law relating to the nominal interest component is unsatisfactory from a policy perspective. In particular, it allows the Commissioner to calculate interest up to a date that may be long after the employer has paid the shortfall amount and the administration component. In this case, for example, it appeared that interest in one case ran for 1,109 days whereas the time that the moneys were outstanding was only 128 days.

Nevertheless, the AAT held that the legislation was clear and unambiguous in its terms. Further, there was no discretion under the terms of the SGAA to allow the Commissioner to remit any part of the superannuation guarantee charge.

Re Australian Medical Services Pty Ltd and FCT [2012] AATA 758 (Professor R Deutsch, Deputy President, 1 November 2012).

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