About one-third of all workers are missing out on legally entitled superannuation payments, according to research, and retirees’ quality of life is poorer as a result.
About one-third of all workers in Australia are missing out on legally entitled superannuation payments.
That’s the finding of research conducted by Industry Super Australia (ISA).
Bunnings is repaying 40,000 current and former workers $3.8 million in underpaid superannuation entitlements, but that’s the tip of the iceberg in what ISA says is a multi-billion-dollar scandal. It estimates that $5.94 billion was underpaid in the 2016–17 financial year, up from $340 million in the 2013–14 financial year.
The ‘problem’ now affects about 33 per cent of all workers, it says, with the average size of the underpayments estimated at $1750 per person per year.
ISA deputy chief executive Matt Linden says the organisation responsible for holding employers accountable, the Australian Taxation Office (ATO), is not doing enough to address the problem.
About one-third of YourLifeChoices members work either full-time or part-time, according to the 2019 Insights Survey, and 42 per cent of members fear their savings will not last as long as they do.
“Unpaid super blasts a hole in workers’ savings, making a huge difference to their quality of life in retirement,” Mr Linden says.
“With such little enforcement action taken against those responsible for the unpaid super scandal, it is time for federal and state politicians to act.”
Mr Linden told The New Daily that part of the problem was an outdated law that allowed employers to pay their workers’ super on a quarterly basis.
As a result, many employers chose not to pay the Super Guarantee (SG) in line with workers’ pay cycles, resulting in some missed payments going unnoticed. And unscrupulous employers could use the law to get away with deliberate underpayment.
Mr Linden says the rules must be changed, so that super contributions are consistent with employees’ pay cycles.
“The only way to end this … super rip-off is for the federal government to make super payable on payday,” he says.
The Victorian government has pledged to crack down on wage theft and has even considered jail time for employers who don’t pay their workers properly.
“A fair day’s wages for a fair day’s work is a simple concept and yet many hard-working Victorians are still underpaid and exploited,” says Attorney-General Jill Hennessy.
Are you sure you are receiving your full super entitlement? Are you paid quarterly or is super paid with your salary?
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