More than one in four Victorian workers were underpaid their super in 2022-23, representing a loss in retirement savings of more than $1.4 billion in that year, new research shows.
The analysis of new ATO data by the Super Members Council (SMC) finds that almost 850,000 Victorian workers were shortchanged an average of $1,670 in super.
Over six years, unpaid super has cost Victorian workers more than $7.2 billion. The federal electorate of Melbourne had the highest levels of unpaid super in Victoria with a total of $250 million, closely followed by Lalor and McNamara (see table).
Nationally, unpaid super is costing Australians $5.7 billion in 2022/23 or $110 million a week – a loss that can only be curbed by urgent payday super laws.
It comes as a new survey for SMC by Pyxis Polling and Insights finds more than 70 per cent of Australians want payday super laws to come into effect on 1 July 2026. Fewer than one in ten people think the laws should be delayed.
Despite this, payday super is not on the Government's legislative program for the current Parliamentary sitting fortnight, risking delays that would be paid for by everyday Australians in lost retirement savings.
SMC urges the Government and Parliament to get on with passing payday super legislation in the first 100 days of the new Parliament. These urgent laws will help 3.3 million Australians with unpaid super to be paid on time and in full.
In its submission on the payday super exposure draft legislation, SMC recommended a series of small but important changes to give employers the support and confidence they need in the transition to the new payment regime, smoothing the path to implementation.
These include extending the payment processing deadline from 7 calendar days to 7 business days, taking a phased approach to ATO enforcement in the early stages to give comfort to employers genuinely trying to do the right thing, and letting employers validate a worker's correct super account details at any time to prevent processing errors.
With digital payroll and single touch payroll reporting systems now available to all employers, many already pay super more frequently than quarterly. As of 2020-21, 56% of all small and medium businesses made super payments more frequently than quarterly.
Super Members Council CEO Misha Schubert says Australians can't afford any delay to payday super laws.
"It's disappointing the Government isn't making payday super legislation a priority in this first sitting fortnight when millions of everyday Australians are losing $110 million a week in retirement savings," Ms Schubert said.
"The average worker in Victoria could be shortchanged more than $30,000 from their final retirement nest egg if unpaid super isn't fixed urgently.
"We urge all Parliamentarians to get on with passing payday super legislation in the first 100 days of this Parliament."
Table – Federal electorates in Victoria with highest unpaid super
Electorate |
2022-23 financial year |
Underpayments since 2017-18 |
||
People underpaid |
Total underpayments |
Average underpayment |
||
Lalor |
33,350 |
$55.7m |
$1,670 |
$234.0m |
Macnamara |
27,450 |
$52.4m |
$1,910 |
$235.4m |
Melbourne |
29,800 |
$50.9m |
$1,710 |
$250.8m |
Hotham |
26,850 |
$45.7m |
$1,700 |
$212.1m |
McEwen |
25,050 |
$42.5m |
$1,700 |
$221.2m |
Gellibrand |
27,200 |
$41.9m |
$1,540 |
$209.8m |
Holt |
27,000 |
$41.7m |
$1,550 |
$204.7m |
Gorton |
26,150 |
$41.4m |
$1,580 |
$203.0m |
Indi |
22,950 |
$41.0m |
$1,790 |
$184.8m |
Fraser |
26,300 |
$38.7m |
$1,473 |
$194.2m |
Victoria |
848,600 |
$1.4b |
$1,670 |
$7.3b |
Source: Super Members Council analysis of ATO 2 per cent sample file, 2017-18 to 2022-23.
The opinions above are those of the author in their capacity as spokesperson for Super Members Council (SMC). SMC, the authors and all other persons involved in the preparation of this information are thereby not giving legal, financial or professional advice for individual persons or organisations.
