Time to end super ‘scandal’, says industry chief

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.

super theft

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Mr Linden told The New Daily that part of the problem was an outdated law that allowed employers to pay their workers’ super on a quarterly basis.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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    COMMENTS

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    Chris B T
    15th Jan 2020
    10:23am
    Try this Under Payment of $1750 with the ATO, a small amount of "$1" had me receiving a very Informed Letter of how missing $1 is tax avoiding.
    Pity there isn't more oversight in this area, at least quarterly Deposits Made.
    I have no Super now, lack of Trust.
    Anonymous
    16th Jan 2020
    11:22am
    Once an employer (contract) missed a single invoice to me amounting to $170 - they hit me for $2000 when my total annual income was $12,000. Since then they were my sworn enemies.... and remain so to this day. Next year I found a magical accountant who knew the ropes for contractors - he got me a return of $8000 the next year... my income had risen...

    Now I couldn't care less who gets what out of the parasites we call government.... not my concern and they created this situation.
    Hoohoo
    21st Jan 2020
    8:23pm
    The ATO threatened me with a late fee when THEY owed ME money (a GST refund). Earlier, my bank had insisted I open a separate business account because of the size of cheques I was presenting, which I did, and cancelled the old account. Unfortunately, this old account was the one I registered with the ATO when the GST was first introduced.

    So when the ATO tried to deposit the refund, it bounced back at them, thus the problem.

    It's the first time I've heard of any govt department insisting on paying anyone, but then they came back true to form, threatening me with a late fee!
    Horace Cope
    16th Jan 2020
    10:29am
    Surely in this day and age with computerisation it can't be too difficult to align super payment remittances to the funds with regular pay periods? Maybe an exemption for those small employers with less than 5 employees but all of the rest to make payments on payday.
    Anonymous
    16th Jan 2020
    11:23am
    Simple - the guv obviously don;t want to... but they can keep track of every cent you have...
    Thoughtful
    16th Jan 2020
    8:30pm
    It is the small employers getting away with this so no exemption. And employees are too frightened to do anything about it for fear of losing their job.
    SuziJ
    16th Jan 2020
    10:32am
    When I was a payroll clerk, the super guarantee and tax was paid each month (by the 7th of the following month).

    During the month, a spreadsheet was used to detail the amount of super for each person and total tax for the week, and month. At the end of the month the spreadsheet was printed and each super funds were paid and the tax withheld was lodged with the BAS.

    The total of the tax and super each week was transferred from the main business account to a 'special' account that was used to acquit the funds at the end of the month. Then there was no excuse that we didn't have the funds to be able to afford the expense.
    4b2
    16th Jan 2020
    11:16am
    About time some of these employers should be fined the amount they have not paid their employees thyen pay the entitlements with interest.
    Fliss
    16th Jan 2020
    11:20am
    I thought the introduction of the Single Touch payroll system which rolled out this year was to stop this. EVERY payment made to an employee MUST be submitted to the ATO along with tax paid & SG payment made.
    Tanker
    16th Jan 2020
    11:43am
    My wife fell into a hole in the super laws. She was making voluntary contributions into her super fund which, unknown to us, absolved her employer from making the so-called compulsory contributions. When her employer went bust my wife lost all the compulsory contributions that should have been made. There were thousands of dollars lost.
    KSS
    16th Jan 2020
    1:34pm
    Making voluntary contributions does not absolve the employer of anything. They are still required to pay the compulsory amount (currently 9.5%) regardless of any extra contributed by the employee whether as salary sacrifice or after tax earnings - assuming of course that the employee meets the required dollar amount of $450 a month in earnings that is.
    Thoughtful
    16th Jan 2020
    8:31pm
    I believe the problem is when salary sacrifice is involved. Is the super guarantee payable on the total taxable earnings or the gross earnings?
    Anonymous
    17th Jan 2020
    1:10am
    I always thought that was the case, KSS.. as it should be.

    Again - I worked for a company and often worked 100+ hours a week - they paid super on 38 hours only... I was robbed... they cheated and lied.. as cunning a bunch of thieves as you could ever find...
    Tanker
    16th Jan 2020
    11:43am
    My wife fell into a hole in the super laws. She was making voluntary contributions into her super fund which, unknown to us, absolved her employer from making the so-called compulsory contributions. When her employer went bust my wife lost all the compulsory contributions that should have been made. There were thousands of dollars lost.
    older&wiser
    16th Jan 2020
    1:56pm
    I don't care how much employers cry and bleat about how sorry they are. Shows how bloody incompetent their HR/payroll section is. This was my specialty for far too many years, and I can tell you, they will deliberately do it, working on the assumption that if they can get away with it, then great. If they get caught, then cry a few crocodile tears saying sorry, offer to repay, and most probably, do it again in a few years time. I saw this far too many times, twice being put off (fired) because I complained about non compliance. It was a case of 'tow the company line, or you're out'. Believe me, the problem is far bigger than just the few companies in the news recently. I was salary sacrificing with one employer who only paid at the end of the year, and when I left (this time my choice), it took them 18 months to pay to my Super, and that was only after numerous complaints and Union intervention.
    Thoughtful
    16th Jan 2020
    8:33pm
    Totally agree.
    Anonymous
    16th Jan 2020
    11:32pm
    As above the ATO has the ability to track every cent paid to you - why then can they not track every cent owed to you as super payments?

    Because They Don't Want To! Putting clearly the proposition that super as currently constituted is not fair dinkum and is most likely a scam.

    Back to The Trebor Scheme...
    inextratime
    16th Jan 2020
    2:10pm
    Its a conundrum for the govt. At 9.5% many companies are now reaching a tipping point on staying in business. If they go, then the unemployment numbers go up and with the labor party wanting to increase the rate to 12% by 2025,uncertainty of business security is a dilemma smaller businesses and some not so small face. Want unemployment figures to stay reasonably low, then turn a blind eye to underpayments.
    Tuesday127
    16th Jan 2020
    3:14pm
    Unfortunately for many businesses they will have to find the 12% super and have pressure from the workforce and unions to increase wages as they don't accept that the 2.5% super increase is equivalent to a pay rise.
    Tuesday127
    16th Jan 2020
    3:14pm
    Unfortunately for many businesses they will have to find the 12% super and have pressure from the workforce and unions to increase wages as they don't accept that the 2.5% super increase is equivalent to a pay rise.
    Thoughtful
    16th Jan 2020
    8:35pm
    A conundrum for governments and employees.
    Anonymous
    16th Jan 2020
    11:37pm
    Super started in lieu of a pay rise - how does that make companies marginal? They seem to have no trouble paying shareholders endlessly every year....

    Whose fault is it that the current super system is so fatally flawed? Not only that,but all these current pushes to utilise it for working life costs etc only serve to force increases in the markets for those things purchased with it... homes etc, and thus impacts on overall costs of living, leading to a further income/COL race while depriving the user of the scheme of future retirement money and thus creating greater demand on pensions from government... thus doing so is a lose-lose-lose for the sucker drawn into such a piss-poor idea.. as well as a lose for government budgets in the future.
    inextratime
    17th Jan 2020
    11:23am
    Paul Keating introduced super. So another Labor stuff up ?

    16th Jan 2020
    11:36pm
    I like the "super theft" Crime Scene picture leading this article as it is very apt!

    Both Liberal and Labor have ignored this blatant theft of people's money - Super should simply be paid at the same time as wages, and ATO should act immediately then if any payment was missed. Could not be simpler!
    Beats me why these anti-people parties are put into Govt time and time again by the people.
    Anonymous
    16th Jan 2020
    11:39pm
    It IS part of wages/salaries -therefore there is no reason it cannot be paid automatically at the same time as wages/salaries................... other than the clear reality that governments do not want it to be handled correctly and in this simple way ....

    Now, class - let us consider why this is so...
    ex PS
    18th Jan 2020
    7:55am
    Underpayong workers and not paying Super contributions is theft plain and simple. The Employers should be treated the same way as an Empolyee stealing of them would be treated.
    If you can't pay your bills, you shouldn't be in business.


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