Aussie workers ripped off by $17 billion in unpaid superannuation, ATO reveals

YOUR boss could be ripping you off and you’d have no way of knowing — but that’s all about to change, thanks to a Federal Government crackdown.

IT’S the safety net that is supposed to ensure our financial security for years to come.

But it turns out that Australia’s compulsorary superannuation system has a great big hole in it — one worth $17 billion.

That’s how much super employers have dodged paying in the past eight years, according to new figures released by the ATO this week.

Now the Federal Government is cracking down on employers caught short-changing staff by failing to contribute the mandatory 9.5 per cent of employee earnings to a super fund of their choice.

The ATO analysis found that employees had likely missed out on $2.85 billion of their super guarantee payments during the 2014/15 financial year, because employers dodged their obligations, with small business owners among the worst offenders.

Revenue Minister Kelly O’Dwyer slammed the shirkers, saying employers who deliberately avoided paying their workers’ super entitlements were essentially “robbing” their staff of wages.

“This is illegal and won’t be tolerated,” Ms O’Dwyer said.

TAX OFFICE CRACKDOWN

The government is bankrolling an ATO superannuation task force to crack down on employer non-compliance.

It comes alongside legislation to close a legal loophole used by some “unscrupulous” employers to short-change employees who make salary-sacrifice contributions to their superannuation, Mr O’Dwyer said.

Employers may also be forced to make monthly contributions, making it easier for the tax office to detect non-compliance.

The ATO will be grated power to seek court-order penalties where employers are caught repeatedly failing in their super obligations.

The current annual gap between the amount of super employers are required to pay, and their actual contribution, is estimated to be 5.2 per cent of the $54.78 billion of superannuation guarantee obligations, the ATO analysis found.

“We encourage people to report instances of non-payment to us and we respond to every one of the approximately 20,000 reports of possible non-payment of SG from employees or former employees we receive each year,” ATO deputy commissioner James O’Halloran said.

$17 BILLION A ‘CONSERVATIVE’ FIGURE

The Australian Institute of Superannuation Trustees welcomed the reforms that will see superannuation compliance prioritised by the ATO.

The institute’s chief executive Eva Scheerlinck said employer non-compliance was costing workers billions of dollars in lost superannuation, leading to poorer retirement outcomes and a higher age pension payment liability for the Government.

“Even on the conservative figures released today, the ATO have confirmed that there is a massive problem of underpayment that has to be addressed,” Ms Scheerlinck said.

“Superannuation is deferred wages and, in a compulsory super system, members must receive their full entitlements.

“Importantly, this package of reforms includes strengthening employer penalties for non-compliance and enhancing the ATO’s power to deal with repeat offenders.”

NOWHERE TO HIDE UNDER NEW SYSTEM

The Government’s reform package includes a timetable for the move to “single touch payroll” electronic payment systems, which will give the ATO near-real time visibility of an employee’s wage and super payments— allowing enforcement to be far more immediate.

Ms Scheerlinck said the new system, which will be implemented for small employers from July 1, 2019, was a critical reform needed to address the issue of unpaid super.

“The problem of non-compliance with super payments is most acute among small business, so encouraging all employers to take up electronic payment systems is a significant step in tackling unpaid super, as well as the black economy,” Ms Scheerlinck said.

She said it was crucial that employers be required to pay super at least monthly— ideally, in line with wage payments — and to record actual benefits paid on the employee’s payslip. Currently, employers are only required to pay staff super on a quarterly basis.

“Disappointingly, the package lacks this key reform,” Ms Scheerlinck said. “Improved payslip reporting would help employees keep better track of their super payments by providing them with the ability to check that their super has actually been paid into their fund. We believe this measure would have a significant impact for members. We will work with the Government to bolster the efficacy of the package in this way.”