Dodgy employers have ripped $17 billion from super

Government boosts ATO’s powers to recover unpaid superannuation from dodgy employers.

Govt cracks down on unpaid super

The Government has announced a package of reforms to give the Australian Taxation Office (ATO) greater powers to recover unpaid superannuation.

The ATO’s first ever audit of the superannuation guarantee shows that, since 2009, workers have missed out on $17 billion that should have gone to retirement nest eggs.

The figures also revealed approximately 80 per cent of unpaid superannuation went undetected by the ATO in 2014-15, with only around 13 cents in each dollar actually recovered for workers.

The ATO says it has been able to claw back around $2 billion since 2010, but it is hoping the new recovery powers will help secure even more money.

The Government will provide the ATO with additional funding for a Superannuation Guarantee Taskforce to crackdown on employer non-compliance. 

The package builds on legislation already announced to close a legal loophole used by unscrupulous employers to short-change employees who make salary-sacrifice contributions to their superannuation.

“We have 150 staff, at least, doing super guarantee work full time and they’ve been relatively successful,” said the ATO’s Deputy Commissioner for Superannuation, James O’Halloran.

“If we find it is intentional disregard, we will in fact apply penalties and take people to court as necessary. And there is a penalty regime up to 200 per cent of the outstanding amount of super guarantee.”

Financial Services Minister Kelly O’Dwyer says the ATO is getting more money to haul employers into line with tougher penalties.

“The ATO will have a new ability to seek court-ordered penalties in the most egregious of these cases of non-payments, and they will be able to secure assets and security bonds for high-risk employers,” Ms O’Dwyer said.

The Australian Institute of Superannuation Trustees (AIST) welcomed the reforms, while calling for more frequent employer payslip reporting.

AIST CEO Eva Scheerlinck said employer non-compliance with SG obligations costs workers billions of dollars in lost superannuation, leading to poorer retirement outcomes and a higher age pension payment liability for the Government.

“The ATO has 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.”

Industry Super Australia public affairs director Matt Linden called for government to urgently reconsider the 25-year-old laws that allow employers to use employees’ super for business cash flows and ultimately not pay the money at all.

"The ATO is to be commended for finally releasing this data knowing full well questions would be asked as to why so much money is not being paid without detection,” said Mr Linden.

"With a compliance regime that is highly dependent on employee complaints and employer self-reporting, it is no surprise billions in unpaid super is going unchecked.

"With more than 80 per cent of unpaid super going undetected, rogue employers know the chances of getting caught are slim.

"This is not how a compulsory system which is meant to guarantee contributions should work,” said Mr Linden.

Have you had some of your super stolen? What did you do about it?



    To make a comment, please register or login
    30th Aug 2017
    About time ,after all it is their job.How did it happen in the first place.
    30th Aug 2017
    It's quite clear from the article that ATO were sleeping on the job -"The ATO’s first ever audit of the superannuation guarantee shows that........". Wow, "first ever"!!!
    Weren't Labor keen to make Superannuation work for workers? Yet they ignored the responsibility to check if employers were actually paying it? Of course, that was Labor without "U" in it! Also, they ignored the widespread under-payment of taxes by the rich and companies (multinational & local) using all manner of loopholes - with ATO probably across those loopholes quite well.

    That's why I keep repeating we have to throw out all sitting self-serving Liberal, Labor & Greens MPs (Federal & State) by putting them last in preferences at the next election, and hope the new breed starts looking after the people better.
    30th Aug 2017
    Isn't it strange how these things go on for decades and then suddenly it is a problem? What have governments on either side done about it other than look the other way?
    Now that the media has decided to get on the case it has become an issue. Just shows hoe apathetic governments are and whose interests they are NOT working for.
    30th Aug 2017
    I agree MICK but, sadly, we live under a democratic system that insists we have a government that is of the people, by the people, for the people. The so-called watchdogs are appointed by governments, funded by governments and staffed by governments. What chance does the ordinary man in the street have. You have had a bit to say on the media from time to time but maybe we need a stronger media.
    30th Aug 2017
    At least part of the problem is the employee who does not take an interest in their super. Clearly in some cases super shown as deducted on the payslip is not being paid into the fund. If the employee is not checking their fund statements then they probably are not aware it has not been paid. Also since the system relies on employee complaints and the employee is not making the complaints then it is easy to see how the situation can go on for a number of years.

    You can jump up and down and blame this or any other Government but the employee also has responsibility . As we have said many times, people do not take an interest in their super until retirement looms than it can be way too late.
    30th Aug 2017
    OM: where elections are concerned the big media players are in bed with one side of politics. Thanks God for the ABC and SBS which have so far survived despite attempts to turn them into same.

    My issue with the system is that we are seeing fascism developing and the coalition is controlled by vested interests. So you get blatant one sided propaganda and dumb voters then vote for what they are told and who is promoted rather than making an informed decision based on honest reporting.
    As I keep saying we need to make the funding of electoral parties, politicians and their families, in all forms, illegal with stiff mandatory jail sentences to let the crooks know what is instal for them if they break the rules. Then you get a cleaner and fairer game. I am not holding out hope that this will happen any time soon but it needs to.
    30th Aug 2017
    Gee MICK, I respectfully disagree. The Fairfax press and the ABC/SBS media are blatant left wing organisations which take every opportunity to have a go at the Coalition. I no longer watch Q&A because of that bias. If you don't believe me, get a stopwatch and check the time that those of the right are allowed to speak against those of the left. Check the participants, no more than two right leaning against three left leaning panellists. Jones has a habit of interrupting right leaning speakers when they are putting a point across yet allows the left side to rabbit on. How many times has a difficult question been put to a Labor member with Jones pushing it aside treating it as a comment.

    As regards political funding, it cannot be stopped even with legislation and gaol sentences. This is a free country, MICK, and you and I have the right to place an advertisement in the press or buy some air time on radio and TV to declare our thoughts on those seeking office. We can do that without writing a cheque payable to a political party.
    30th Aug 2017
    "Blatant left wing organisations"? For airing both sides and not telling blatant lies? And I suppose the Murdoch rags as well as the prime time TV stations which follow the Murdoch trolls like sheep are fair and honest broadcasters?
    I actually watched None News pretty closely during the last election. Turnbull was mostly shown at primary schools being a nice daddy or at children's hospitals being the same. It was pretty sick. Time? Turnbull got at 30 seconds to a minute spewing out his dishonest rhetoric whilst SHorten got around 5 seconds, often making innocuous statements which made little sense because they were cut short.
    If you saw Turnbull on ACA tonight you would have known the man was talking total tripe about how consumers can lower their electricity prices. Just a public show which is total BS. No real solutions. Just smoke and this man operates.
    You are wrong about not being able to stop electoral funding. Nothing to do with being a free country and everything to do with what is fraud at the highest level: accepting payment for policy of blind eye. It certainly can be stopped but no goodwill from either side. I would have thought Shorten might seize on this as it would end the lopsided game...the reason why coalition is in government for longer stints.
    I can see we are on opposite sides of the spectrum.
    30th Aug 2017
    But MICK, you keep telling us that we should vote Independent, doesn't that mean you aren't aligned to either major party? Your post suggests that you are, in fact, a Shorten man.
    31st Aug 2017
    Not at all OM. I have repeatedly stated that I do not vote Labor but my first priority is seeing the back of the worst government I can ever remember and reestablishing proper and fair government which actually does something for the nation.
    If voters need to vote Labor in the short term (no pun intended) to rid itself of the current malicious despots then so be it. That does not mean I am aligned with Labor. I will be voting Independent but will make sure that I am not casting a defacto coalition vote.
    Sorry to disappoint you. What is important to me is the outcome for our country. I have no allegiance to any political party or politician and I find it sad that most voters vote as if they were supporting their footy team rather than ensuring our nation is best served.
    1st Sep 2017
    I couldn't agree more, Mick. I hate Labor, but I'd far prefer to see Labor in power than this mob of corrupt, self-serving pigs retaining power. Ideally, we need a clean slate - independents who genuinely care for the future of the nation and its people. But for now the priority must be to get rid of the worst government this nation has ever had to suffer. If that means suffering Labor government for a time, so be it. It couldn't be worse than what we have now.
    ex PS
    2nd Sep 2017
    How about the employees KSS, do they have a responsibility not to steal from their staff? If a staff member took $50.00 a week out of the till, should they be charged with stealing? Why is an employee who takes that amount out of an employees pay packet every week any different?
    These white collar thugs are stealing peoples futures.
    Not a Bludger
    30th Aug 2017
    Whilst I do not believe that the problem is as large as is claimed in these estimates, I do agree with floss - it is about time.

    The ATO has always had this responsibility but, as with so much else, the civil servants have worked to rule and ignored those matters in the "to hard" basket - disgraceful.
    30th Aug 2017
    Haven't they collapsed whole departments and middle tier oversight and sacked thousands through redundancy.?Obviously when the new private contracts were issued worker's entitlements didn't figure high on the list of needs.

    Another example of the selectness of privatisation. How do my mates and I get rich was one of the top priorities.

    Every public servant supports another 6 or so workers. It is now costing far too much in debt for each GDP $1 produced as government sponsored corporations top management clean up financially and worker's wages fall.

    The ATO was one of the first and most savagely hit by this austerity measure as were other regulators. Another aspect of neo liberal ideology that is failing to deliver value to the taxpayer.

    Small government is fine until the consequences hit home. There is always a risk somewhere.

    Tackling corrupt employers has always been in the too hard basket.
    If the penalty fitted the crime I'm sure there is a point where the crime becomes too risky. Right now we don't have much of a stick .

    Wages have been stagnant for decades in real terms and ripping only PAYG worker's off further is disgraceful indeed.
    Not a Bludger
    30th Aug 2017
    Floss an Rae - you jest me - every civil servant supporting 6 other employees?

    What a joke - so-called civil servants will not even work a full 30 odd hour week - they do not even cover the cost of there own employment (my taxes not at work) let alone 6 more.

    It is no coincidence that about 33% of the workforce are on the payroll of federal/state governments/ councils/NGO's at mainly 100% union membership - compare union control over total employees at less than 15% and private industry at around 5 %.

    1st Sep 2017
    I can believe for every paid civil servant there are 6 private sector workers, but civil servants ''supporting'' other workers? No way! Civil servants support nobody. The majority are lazy, overpaid, seat-warming idiots. I acknowledge that a small minority are hard working, and they actually probably support 10-12 bludging colleagues. But the vast majority are totally useless - totally incompetent and having a serious aversion to anything looking remotely like ''work''.
    30th Aug 2017
    It appears that workers have been ripped off. Wow, that's a new thing eh?

    It also appears to be in the governments interest to do nothing about it in the near term as it is only a cost to the Gov't to follow it up quickly.

    If it is left for a long time, after which it may be irrecoverable due to businesses going bust, the Gov't can apply massive fines from which it generates income.
    Doesn't sound like a good system for the workers.
    30th Aug 2017
    Australia is going to the dogs and at a much faster rate in the last few years.Perhaps they have reduced the Public Service to a point where it can no longer function, the Tax office and C.Link come to mind.

    30th Aug 2017
    2017 - and they only just got onto it.?

    What did the last labor government do. Sweet f.a. as usual.
    30th Aug 2017

    1. introduced a price on carbon, a policy the rest of the world wants. It worked but the coal industry had to kill it off. It did.
    2. got old dilapidated government schools fixed after many decades of neglect.
    3. the NBN
    4. kept Australians working during the GFC...which saw huge unemployment queues in every other country.

    What did your coalition do in the past 5 years:

    1. killed off the Carbon Tax for its prime electoral funder the coal industry.
    2. give more money to private schools.
    3. wrecked the NBN project and caused this butchery to cost more than the original project.
    4. remove the debt ceiling so that it could borrow limitless amounts of money. We now have more than double the Labor debt, not GFC in sight and this is going to blow out horrendously over the next few years.
    5. give rich people tax cuts they do not need whilst trying to continually introduce new taxes for workers.

    Sweet f.a. Yeah Raphael. That is what is between your ears mate. Go take an honesty pill.
    ex PS
    2nd Sep 2017
    Last time I looked it is not just the Labor Party that has been in power since Super was made compulsory. Some people are so right wing biased they won't even make a left turn when driving to the shop.
    Just another reason why Unions are essential, we need someone to protect us from white collar thugs.
    This all stems from the absurd notion that business can self regulate and monitor their own compliance. We have seen it with the banks and now with other businesses, you can't trust the rats with the cheese.
    30th Aug 2017
    Well I always thought that employers are stealing from us when they make quarterly payments - they get the free use of our money for up to three months, and cost us all the earnings that we could have earned from it inside our super funds. In a rising market, they also costs us long term, as we pay more per unit - unless the market falls, in which case we get cheaper units. It certainly makes a mockery of the principle of dollar cost averaging.
    30th Aug 2017
    It is not before time....employers who do not pay super as required should be penalised.
    ex PS
    2nd Sep 2017
    These are the same people who will contribute to the "trickle down theory" and help fix the economy, if they will steal peoples Super they will surely take any tax cuts given and just sling them in the bank.
    And that is why trickle down has never and will never work.
    31st Aug 2017
    Industry Super Australia public affairs director Matt Linden called for government to urgently reconsider the 25-year-old laws that allow employers to use employees’ super for business cash flows and ultimately not pay the money at all. I cannot believe that this was ever allowed, how shonky is this !
    At last the ATO will get it sorted, we hope !
    31st Aug 2017
    I've waited 5 Years and company owing our super drives around in a $160000 F650
    Still owes us
    Government is all bs
    Same as CBA owes us for $22560 paid insurance that sent us to the wall.
    ex PS
    2nd Sep 2017
    I don't get it, so many people coming out with the government should do this the government should do that. When are we going to put the blame where it belongs, the criminal business owners who are stealing of their own employees. We need to start sending some of these white collar thugs to gaol.
    It is the right wing that has a penchant for self regulation, they have weakened the ability of independent organisations to oversee these arrangements.
    I would be willing to bet those funds that are overseen by Unions are not being messed about with by employers.
    4th Sep 2017
    The problem is that ultimately the government has to enforce the law. Employees can report breaches, but unless the government authorities force compliance, reporting doesn't achieve much. Too often, complaints from the ''little man'' fall on deaf ears.
    12th Sep 2017
    The favourite trick employers play is not to provide a pay slip as EFT pays suits a lot of people but it hides the fact that no Super has been paid.The FWO should be empowered as well as the ATO to recover unpaid super but to do that both organisations require more funding and more staff.

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