ATO uses new powers to recover superannuation entitlements from phoenix operators

The ATO has used new powers to recover eight million dollars in worker’s superannuation entitlements from the operators of labour-hire companies in South Australia and Victoria who have engaged in phoenix behaviour.

The network of companies provided labour-hire services such as seasonal fruit picking and meat packing and had been failing to pay workers their superannuation entitlements.

Phoenix behaviour involves the deliberate liquidation of companies to avoid paying superannuation obligations as well as to avoid other tax liabilities and to avoid paying creditors and suppliers.

Deputy Commissioner Michael Cranston said new powers, known as Superannuation Guarantee Estimates (SGE), allow the ATO to step in where we see likely phoenix activity and protect workers’ super entitlements before companies try to liquidate and avoid their responsibilities.

“The ATO can also issue director penalty notices which make directors personally liable for the company’s unpaid superannuation obligations.

“Phoenix operators cheat their workers and undercut honest business. Tackling the behaviour is key focus for the ATO.

“We expect to use these powers more frequently against phoenix operators.”

The SGE powers allow the ATO to raise liabilities against companies who fail to disclose details about their employees. The ATO can deal with this type of Phoenix behaviour in real-time, by making a reasonable estimate of a company’s superannuation obligations, and raising a debt on the company or its directors before the company can be put into liquidation.

Workers who suspect their employers are not paying their superannuation entitlements should notify us of their concerns by visiting

Last modified: 09 Jan 2015QC 43636