Don’t let unscrupulous employers steal your retirement dreams

IT’S ONE of the most important components of your salary, but many Australians are being ripped off. Here’s how to make sure it doesn’t happen to you.

COMMENT

ALMOST 15 million Australians have a super fund account and the majority will rely on that money to retire happily.

But, as news.com.au has previously revealed, as many as one-third of workers are not being paid their entitlements correctly.

Not only will this leave you in a tough financial position when you finish working, but incorrect payments may also prevent you claiming on the insurances that are included in your super fund.

So what can you do to ensure you don’t get ripped off? Luckily, there is a quick and simple method of checking if your boss is making the correct contributions to your nominated superannuation account.

For employees eligible for a superannuation contribution — that is, adults earning more than $450 (before tax) in a calendar month — employers are required to pay an extra 9.5 per cent on top of earnings into super every quarter.

DO THE SUMS

A simple calculation will determine if your employer has contributed correctly: multiply your Earning Before Tax by 9.5 per cent.

If your super fund records show a contribution less than this amount, your employer may not be paying your superannuation correctly. There are also a number of quick and easy calculators available online.

Alternatively, you can create a “myGov” account with the Australian Tax Office. You will need your tax file number and your yearly taxable income.

The ATO is able to provide details about how much money has been paid into your super account in the last two financial years and also locate any super accounts you have lost or forgotten about.

If you discover that your super fund contributions have been too low, you have a number of options.

WHAT TO DO

• Respectfully ask your boss to pay you the correct amount. You may wish to ask: how often they are contributing to your super fund? Which super fund they are contributing to? How much they are contributing?

• If your employer does not rectify their error, you may wish to seek legal advice on getting your money back.

• You can lodge an enquiry with the ATO, which will investigate your employer and keep you updated about the progress.

INSURANCE WARNING

Most super funds also have group life insurance that they take out on behalf of their members. However, insurance cover is often subject to strict rules particularly with respect to the account balance, so if correct super contributions are not being made by an employer, employees are at risk of not being covered.

It’s another good reason to check your super is being correctly paid. Make sure unscrupulous employers don’t steal your retirement dreams.

Will Barsby is Shine Lawyers’ principal solicitor for superannuation.