Plan to align superannuation guarantee payments to the wage cycle.
A Bill was introduced into Federal Parliament yesterday that would align super guarantee (SG) payments to the wage cycle and abolish the monthly $450 threshold.
The Private Member’s Bill, introduced into the House of Representatives by the Nick Xenophon Team’s (NXT) Rebekha Sharkie, follows recent Tax Office revelations that Australian workers’ superannuation has been short-changed by a staggering $17.1 billion since 2009.
Industry Super Australia welcomed the prospective legislation.
“The unpaid super of millions of hard-working Australians should be a top priority for the government,” Industry Super Public Affairs Director Matt Linden said.
“Every month that goes by without action is costing workers hundreds of millions in unpaid super.
“Unpaid super is the number one issue in superannuation today – it is leaving Australians short of savings at retirement and placing extra pressure on the Age Pension.
“The Bill introduced today by Rebekha Sharkie would introduce significant new safeguards as soon as 1 July 2018.
“In particular the alignment of super and wage payments is essential, and the $450 threshold makes no sense with more of the workforce, particularly women, in part-time and casual work.
“These measures will benefit part-time and casual workers, and women whose super savings are falling seriously short at retirement,” Mr Linden said.
An Industry Super analysis of 2013/14 ATO data revealed an SG shortfall of $5.6 billion, affecting 32 per cent of entitled workers at an average of $2025 each in that financial year, across the nation.
In Ms Sharkie’s home state of South Australia, 168,000 workers (29 per cent) were underpaid their super entitlements at an average of $1698 each.
“The Xenophon Team’s Bill represents real action for workers across the country,” said Mr Linden.
The Bill also seeks to:
- Close the loophole which allows employers to count salary sacrifice towards their SG obligations
- Expand Member Contribution Statements
- Give the Fair Work Ombudsman greater authority to recover unpaid super.
The Australian Institute of Superannuation Trustees (AIST) also welcomed the NXT legislation.
Under the current $450 monthly income threshold policy, employers are not required to pay SG to employees over the age of 18 that earn less than $450 per month.
AIST CEO Eva Scheerlinck said that threshold impedes on the ability of people working multiple jobs to save for their retirement.
Ms Scheerlinck said that the threshold is outdated and its removal will reduce complexities for both employers and employees.
“All Australians deserve the right to a decent retirement, so we fully support the removal of barriers that prevent them from saving enough,” said Ms Scheerlinck.
What do you think? Have you had some of your super stolen? Do you think enough is being done to recover unpaid superannuation?