What should employers do when there's no clear guidance on lockdown DPN risk under payday super?

In our previous article, How will payday super affect director penalty notice (DPN) risk?, we highlighted the uncertainty surrounding how the Director Penalty Notice (DPN) regime would operate once the Superannuation Guarantee Charge (SGC) Statement was replaced under Payday Super.

With Payday Super now in effect and the first FY27 superannuation payment deadlines having passed, uncertainty remains on how DPNs operate under the new regime. While the ATO has introduced the Voluntary Disclosure Statement (VDS) process for reporting unpaid superannuation obligations, it has not yet clarified what constitutes timely reporting for the purpose of determining whether a DPN is capable of remittance or becomes a lockdown DPN.

How has the reporting framework changed under Payday Super?

Under the former regime:

• Employers that failed to pay superannuation were required to lodge an SGC Statement within one month of the due date.
• There was a clear and understood reporting framework.
• Directors knew what action was required to preserve their position.

Under Payday Super:

• SGC Statements have been replaced by Voluntary Disclosure Statements.
• There is no clear guidance on how VDS lodgements will be treated for DPN purposes.

As a result, key uncertainties remain:

• What constitutes timely reporting for DPN purposes?
• Does a VDS need to be lodged within a specific timeframe to avoid a lockdown DPN?
• How will delayed VDS lodgements affect DPN classification?

Our preliminary view is that Payday Super will accelerate directors' exposure to lockdown DPNs, with personal liability potentially arising as early as 60 days after wages are payable, or sooner if the ATO issues an estimate of the company's superannuation liability. Until further guidance is issued, directors should assume that delayed disclosure may significantly increase their personal exposure.

What should directors do to reduce DPN risk under Payday Super?

Directors should not assume that STP satisfies the reporting requirements relevant to DPN classification. While STP provides real-time visibility of payroll liabilities, there is no clarity in the legislation to confirm that it constitutes formal disclosure for DPN purposes. A VDS should still be treated as necessary to mitigate potential lockdown DPN risk.

Should directors wait for further guidance before lodging a VDS?

Directors should be cautious about assuming that previous SGC reporting timeframes will carry across to the new VDS lodgement process. Until further guidance is available, the prudent approach is to disclose any unpaid superannuation liabilities and lodge a VDS promptly once it becomes apparent that payment cannot be made on time.

What are the risks of delaying a Voluntary Disclosure Statement?

Where superannuation cannot be paid, there is often a tendency to defer lodgement while cash flow issues are resolved. In practice, deferred action can become no action, particularly as payroll cycles continue and priorities shift.

Under Payday Super, this risk is amplified. More frequent payroll cycles increase the likelihood that intended disclosures are overlooked.

As a practical rule, directors should consider lodging a VDS within one week of payroll processing where there is no reasonable expectation that the superannuation liability will be paid.

How can directors minimise the risk of a lockdown DPN?

In the absence of clear guidance, a conservative and transparent approach is the lowest-risk course of action.

Where there is no reasonable expectation that superannuation will be paid within the required timeframe, lodging a VDS shortly after payroll processing rather than waiting weeks or months will:

• Reduce the risk of a lockdown DPN.
• Ensure the liability is formally disclosed.
• Assist in minimising late lodgement penalties.
• Reduce the operational risk of missed reporting.

Importantly, it aligns with a long-standing principle of the DPN regime: taxpayers who are transparent with the ATO are generally better placed than those who delay disclosure or fail to disclose at all.

Why is proactive management more important than ever?

Payday Super increases transparency around superannuation compliance and places greater emphasis on timely reporting.

While the interaction between VDS lodgements, STP reporting and lockdown DPN exposure remains uncertain, one principle remains clear: directors should act proactively and avoid relying on assumptions about how the regime may ultimately operate.

If the inability to meet Payday Super obligations is due to sustained trading losses, director exposure may extend beyond DPNs to personal guarantees, liquidator claims for insolvent trading and breaches of directors' duties. Obtaining professional advice early can help directors understand these risks and evaluate whether restructuring or an orderly wind-down is the most appropriate course of action.