ATO slammed for failing to get back unpaid superannuation

Employees were ripped off more than $82,000 but despite complaints they haven’t seen a cent. Now the company has gone into liquidation.

A group of NSW childcare workers are owed more than $82,000 in unpaid superannuation but despite an investigation by the Australian Taxation Office and a court order they have still been left empty-handed.

One of the employees has slammed the ATO for failing to recover the money as part of a Senate inquiry into wage and superannuation theft.

Margaret Joyce worked for Gumnut Childcare Centre in the Blue Mountains, which was taken over by a company called ECEC Management in March 2018.

Despite their pay slips recording super being paid, a staff member received a call from their fund alerting them to the fact that no money had come in for 12 months since the takeover.

Joyce, who missed out on almost $6000, said staff members were “angry” when they found out about the super theft and contacted the ATO straight away.

“We were pretty angry about it and a lot of us approached the tax office because we were told they could institute some action and we also got on to the union about what our options were,” she said.

“The (ATO) pretty much did nothing at all. I think usually when the tax office comes to individuals, they jump on you if claim $20 over the deduction allowance, yet this (company) have done this for thousands and thousands of dollars and nothing has happened.”

Margaret Joyce is one of 10 workers that are collectively owed over $82,000 in unpaid superannuation. Picture: Supplied

In a submission to the Senate inquiry, the United Workers Union said an ATO investigation found superannuation was owing to the childcare workers and were told by the government agency that a payment plan was being negotiated.

Yet, no details were provided to staff members on how their money would be recovered.

Staff were also informed they would need to file a new complaint each quarter if the company continued to fail to pay super.

The UWU even took ECEC Management to federal court last year where orders were made for it to pay the outstanding superannuation, but in February the company went into liquidation.

Joyce said she hasn’t seen a cent and never expects to recover the money. At 59, she needed all the money she could get, particularly as she had spent 10 years out of the workforce raising her children.

The whole experience had left her with an “awfully bad taste” in her mouth, she added.

“If I had done this to my employer, if I had stolen money from them I would be in jail so why does it not work the same way? The laws are supposedly there to protect the employees but the tax office has pretty much been a toothless tiger in terms of doing anything about it,” she said.

“And if the government is serious about the concerns about not being able to fund the aged pension in the future why are they not chasing these people?”

Around $5 million is lost a year in unpaid super. Picture: Getty Images

Unpaid super impacts one in four Australian workers — that’s 2.9 million people — costing them $5 billion in a year, according to Industry Super Australia.

On average workers lose $1700 in super contributions, which blasts a huge hole in retirement savings and it could cost workers as much as $60,000 from their final nest egg.

Young workers, and those on lower wages are most likely to be underpaid super. The worst affected industries are construction, transport, trades, hospitality, retail and accommodation.

ATO Commissioner of Taxation Chris Jordan told the inquiry it was a “terrible situation” for employees to lose money and an ongoing policy issue around the timing of the payment from the employer to the super funds.

Employees have three months to pay super contributions, causing a lag in time in identifying if the money hasn’t gone into a fund.

Labor Senator Jess Walsh. Picture: AAP Image/Mick Tsikas

Labor Senator Jess Walsh said workers have to fight too hard to get all the super they’re owed and super theft has gotten worse in the last decade.

“Too many employers treat super like a bill they just don’t get around to paying, and too often the ATO lets them get away with it. But this is someone’s retirement at stake,” she said.

“We need a strong super system that makes employers do the right thing. We need a strong system that gives workers real power to get their stolen super back.”

Industry Super Australia chief executive Bernie Dean added that the ATO needs to muscle up and protect workers being ripped off by dodgy employers not paying billions in super each year.

“The ATO needs to do better than recover only about one in ten dollars of unpaid super for those frustrated workers that blow the whistle,” he said.

Having super paid on payday would get the money to workers quicker and make it easier to chase up those employers that are trying to dodge their responsibilities, he noted.

An ATO spokesperson said in 2020-21 the offfice distributed $944.7 million of superannuation entitlements to individuals and funds.

“Most employers are doing the right thing and our work to measure the superannuation gap shows us that they are paying 94.6 per cent of the required contributions without any intervention required from the ATO,” the said.

“We take the non-payment of superannuation very seriously and have a very focused review and audit program into the non-payment of superannuation. In 2020-21 the ATO finalised 19,600 reviews of employers with 16,400 of those reviews being as a result of employee notification.”