Challenge to tax office's superannuation guarantee levy is dismissed

The High Court dismissed the challenge and found the federal government’s ability to collect the superannuation guarantee levy from businesses was valid under the Constitution.

Roy Morgan Research launched the High Court case, arguing it shouldn’t have to pay the guarantee because the levy provided a “private and direct benefit” to employees and was not imposed for “public purposes.”

The superannuation guarantee charge is levied on employers that fail to pay the minimum 9 per cent level of superannuation for employees. The ATO can assess offending employers for the super amount due plus added interest and administration costs.

The ATO and the federal government argued the charge was constitutional because there is a public purpose in incentivising employers to pay super, which supported the government’s ability to collect the levy.

In late 2007 the ATO imposed a super guarantee charge on Roy Morgan Research relating to contractors who conducted face‑to‑face and phone interviews between 2000 and 2006, deeming those contractors to be employees entitled to super.

Yes. Roy Morgan chairman Gary Morgan said he was disappointed and warned that thousands of businesses could now face a tax liability for superannuation that had not been paid to contract staffers.

In the Roy Morgan case the ATO deemed certain contractors to be employees entitled to super, and the High Court’s dismissal of the challenge supports the ATO’s ability to collect the super guarantee charge where employers have not paid required super.

The ruling confirms the ATO can lawfully collect super guarantee charges from employers who don’t meet the minimum 9 per cent super requirement, and that assessed employers can be liable for unpaid super plus interest and administration costs.