Almost a quarter of the ACT’s workforce has missed out on $73 million in retirement contributions in just one year, and workers will continue to be ripped off until federal politicians act.
Industry Super Australia (ISA) analysis of the latest tax data shows more than 38,000 ACT workers lost an average of $1,900 in 2018-19. Those dudded on super can end up retiring with up to $60,000 less.
In six years – from 2013 to 2019, ACT’s unpaid super bill reached an eyewatering $370 million.
Community awareness of the unpaid super problem remains chronically low especially among young ACT workers and those on lower incomes who are most likely to be ripped off.
It can often take months for workers to uncover that they have been underpaid, making recovery far more difficult. Making matters worse 70% of workers don’t realise super can legally be paid just four times a year, not with their wages – despite what it says on payslips.
The outdated laws and the lack of awareness amongst workers is being exploited by some unscrupulous employers who don’t pay super.
Mandating that super is paid with wages will make it much easier for workers to track when payments are made and uncover underpayments quicker, making recovery more likely.
An ISA report, Super Scandalous how to fix the $5 billion scourge of unpaid super and a community awareness campaign aims to help solve the problem that impacts three million people and provides practical tips on how to ensure workers are getting what they are owed.
But individuals can only do so much, it is up to politicians to fix the systemic underpayment of super by mandating all employers pay super into a workers’ account when they pay wages.
Unpaid super creates an unequal playing field for businesses, as the employers doing the right thing are undercut by competitors who are ripping their workers off.
Workers must largely rely on the Australian Tax Office to recover their money as it is difficult to sue for super. But the report found that unscrupulous employers do not fear the regulator. With good reason, the Australian Tax Office only recovers a dismal 12% of unpaid super annually.
If the ATO is unwilling or unable to recover ACT workers’ savings the law should be changed so that employees, the Fair Work Ombudsman, and others acting on behalf of workers can.
To fix ACT’s $75 million unpaid super scourge politicians should commit to:
Ø Mandating super payment at the same time as wages.
Ø Lift enforcement activity and force the ATO to issue and publicise penalties for not paying super – so dodgy employers can see there is a cop on the beat.
Ø Empower employees and representatives to recover unpaid super debts.
Ø Extend the Fair Entitlement Guarantee so workers can recoup their savings if a company goes bust – at the moment super is not included.
Comments attributable to Industry Super Australia Chief Executive Bernie Dean:
“This is a $75 million a year rip off, affecting a quarter of the ACT’s workers, yet many of them remain unaware, assuming super is being paid because it appears on their payslip.”
“Super is your money, you should get it paid at the same time you get your wages. By not mandating the payment of super with wages, politicians are stopping millions getting what they are owed.”
“Our federal politicians get their super paid on payday, so should all ACT workers.”
Table 1: Unpaid super by ACT federal electorate
Percentage of electorate
Source: ISA analysis of 2018-19 2% ATO tax file and ABS data.