Three million Australians are missing out on their compulsory superannuation entitlements

ONE in three Australians are being short-changed on their compulsory superannuation entitlements, costing workers a whopping $5.9 billion. Here’s how to avoid being ripped off.

EXCLUSIVE

ONE in three Australians are being short-changed on their compulsory superannuation entitlements, costing workers a whopping $5.9 billion.

Alarming new analysis by Industry Super Australia (ISA) based on Australian Taxation Office data has estimated 2.98 million people are missing out on their super payments.

This is the equivalent of $1960 a year or about $75 per fortnightly pay, data from the 2015-16 financial year found.

The figures reveal an extra 220,000 workers are being dudded compared to just two years earlier and that the total amount gone missing has increased by $300 million.

The new analysis shows in 2015-16:

— Workers aged under 30 were more likely to have been dudded on their super guarantee (SG) payments.

— Part-time and casual workers are heavily impacted.

— More than 45 per cent of labourers, machinery operators and drivers have missed out on SG payments totalling $820 million.

The surge in unpaid super is being blamed on the cash economy, rogue employers, the growth in small businesses, prominence of insolvency, and the rise of independent contractors along with illegal phoenixing activity.

ISA chief executive Bernie Dean said it was a huge concern so many Australians were getting ripped off on their entitlements.

Industry Super Australia chief executive Bernie Dean is urging employees to check their pay slips and make sure they are getting paid their super entitlements.

“The laws around when super must be paid are really loose and while most employers are doing the right thing, at the moment a boss can hold onto money until the remainder of a quarter,” he said.

“Even though a contribution may appear on your pay slip a boss is not compelled by law to pay that contribution into your super account until the end of the quarter.”

Mr Dean said in a lot of circumstances casual employees or those in work for a short time were impacted.

He said if “no bells are ringing” and the payments were not made business could ultimately away with not making SG contributions.
Mr Dean said laws should be changed so when an employee is paid their salary their SG payments are also paid into their fund immediately.

Under legislation employers must pay workers compulsory SG payments of 9.5 per cent if they earn $450 or more before tax in a calendar month.

Employers must pay SG at least four times a year or by the quarterly due dates.

Latest ATO figures showed they received about 30,000 reports from people who believed they missed out on compulsory contributions.

Labourers are among those workers most likely to miss out on their super entitlements.

During 2017-18 they raised about $850 million from SG noncompliance, a 77 per cent increase on the previous year.

Construction super fund Cbus has collected more than $90 million in unpaid super in 2017/18 and more than $330 million over the past five years.

The fund’s group executive of brand advocacy, marketing and product Robbie Campo said they use a “rigorous process” that could identify non-compliant employers.

“Sometimes we see a situation where people think they are being paid super but then it comes up they have not,” she said.

“There’s calls for policy change to allow the payment on superannuation with wages.”

Cbus has 780,000 members and $47 billion in funds under management.

Mr Dean urged employees to check their pay slips to see super amounts were disclosed and make sure it matched up what is being deposited into their super fund.

“Payments should be regular and any unexpected delays could be a warning sign,” he said.

If they get nowhere they should phone their employer, contact their fund or ring the Australian Taxation Office.

@sophieelsworth

UNDERPAYMENT OF EMPLOYER SUPERANNUATION

State People underpaid Average underpayment

NSW 990,500 $2075

Victoria 743,350 $1805

Qld 583,150 $1915

SA 177,700 $1650

WA 322,300 $1950

Tasmania 57,400 $1775

NT 40,200 $2565

ACT 49,300 $3485

Source: Industry Super Australia estimated figures for 2015/16 financial year.

Originally published as Three million Australians are missing out on their compulsory superannuation entitlements