Superannuation problem robbing retirees only getting worse

New analysis of ATO data suggests the scourge of unpaid super is getting worse.

Unpaid super problem getting worse

New analysis of Australian Taxation Office (ATO) data suggests the scourge of unpaid super is deepening with almost three million Australians being short-changed $5.9 billion in entitlements in 2015-16, up 220,000 employees and $300 million compared to two years earlier.

For the one in three workers affected, the average underpayment stood at $1994 or the equivalent of $77 per fortnightly pay.

The analysis by Industry Super Australia has revealed the hotspots for unpaid super in each state with workers in outer metropolitan and regional areas most at risk.

Over 45 per cent of labourers, machinery operators and drivers have collectively missed out on more than $820 million making it to their super accounts.

Part-time and casual workers earning less than $30,000 are a third more likely to miss out on super compared to full-time workers and those on higher salaries.

Industry Super chief executive Bernie Dean said it was apparent some employers are taking advantage of outdated super laws.

“It’s obvious that the rise of insecure employment is amplifying the already widespread problem of unpaid super,” Mr Dean said.

“This money should be in workers’ accounts, not on the ledger of an employer that’s taking advantage of lax laws and a cop-free environment.

“Despite new laws before the Parliament that should improve reporting of super, employers are still under no obligation to actually pay super contributions at the time they are disclosed on payslips.

“The number one policy to fix the rip offs is to require employers to pay super at the same time as wages and salary, rather than allow the money to be used for other things for up to four months.

“Most employers do the right thing and many employers already pay super fortnightly or monthly, but the time has come to make regular payment of super mandatory,” Mr Dean said.

Read the full Industry Super report.

Do you think employers should be forced to pay super at the same time as wages and salary?

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    COMMENTS

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    Pass the Ductape
    23rd Oct 2018
    10:30am
    Of course they should!
    Super payments are part of what a wage earner receives for services rendered and is underwritten by law.
    Too often, many wage earners are being ripped off by uncaring employers who use loop holes in the system to not pay lawful entitlements in a timely manner.
    In the final analysis, many employers often escape paying their employees their correct and proper renumeration.
    jackie
    23rd Oct 2018
    1:08pm
    Many employers are getting away with paying their staff wages too. Look at the companies that have gone bust.
    MICK
    23rd Oct 2018
    2:03pm
    The issue here is that a growing number of bosses are thieves. They think paying the running costs are more important than paying their workers.
    We've seen it all. The 147 visa rort to cut Australians out of the work loop, the Work for the Dole Scheme, payment by piecework, charging lowly paid farming workers for food a accommodation, and the latest - to make retirees come work for free. Ok, to be fair most of the above list refers to farm employers but their city cousins also try it on an construction has been a killing field for decades. The question is WHERE ARE REGULATORS AND OUR GOVERNMENTS? Nowhere to be seen.
    TREBOR
    23rd Oct 2018
    3:44pm
    ... and contracted employees now... pay their own super...

    Time for a return to a reliable Industrial Relations system.

    The current screaming from the rooftops for regulation to the max.... which is something many fear and few want.... on both sides of the societal fence ...always the same - greedy people on 'self-regulation' cruel it for everybody and one day every facet of your life will be regulated...

    Of course those who've crueled it for everyone never pay back in full but retire in riches... look at the 'business moguls' who've run businesses into the ground and still have millions to play with... where are the regulators and lawmakers there?
    MICK
    23rd Oct 2018
    4:42pm
    Ian Narev from the CBA? To name one. Many have gone down this track and live the high life whilst shareholders suffer in silence.
    TREBOR
    25th Oct 2018
    12:25am
    So true, Mick - many shareholders take the hits.. the bosses don't. By any other name it's called legitimised theft.
    johnp
    23rd Oct 2018
    11:08am
    Underperforming super funds are a bigger problem esp. some retail funds
    Old Geezer
    23rd Oct 2018
    11:15am
    Performance is not a consideration if the money has not been put in.
    johnp
    23rd Oct 2018
    11:21am
    touche'
    TREBOR
    23rd Oct 2018
    3:45pm
    True - but those who work for a living have no choice.... OG.. they can prefer their fund.... and that's it. They still have to put money somewhere - it's compulsory... and the sharks are circling all the time..
    Old Geezer
    25th Oct 2018
    10:15am
    Trebor super is not compulsory at all.
    Jim
    23rd Oct 2018
    11:36am
    Money should be paid in at the same time as you receive your wages, many employers still to this day don’t pay their employees entitlements at all, I don’t know how they get away with it, sometimes I think it’s our own lax attitude, but that shouldn’t come into it, super should be paid the same way as tax is paid, and like the tax man people’s super should be paid before any other outstanding debts, if that’s how it works, if it doesn’t work like that it should.
    Pass the Ductape
    23rd Oct 2018
    11:38am
    You need to contact Clive Palmer about this Jim!
    TREBOR
    23rd Oct 2018
    3:46pm
    Spot on, Jim.
    maelcolium
    23rd Oct 2018
    11:39am
    The only way to fix this mess is to nationalise he entire system and repatriate the balances to a public corporation like the politician's Future Fund and cut out the finance industry parasites. This would have a dual benefit of cleaning out the industry corruption, fee raking and rebalance the share market which is controlled by super funds. The Future Fund is projected to fund the huge defined benefits of pollies and fat cats, so why wouldn't it work for the populace?l
    Old Geezer
    23rd Oct 2018
    11:58am
    No thanks. Nationalising super means that if you don't use it all before you die the government gets the rest. No one in their right mind would have super after they retire and can get access to it.
    TREBOR
    23rd Oct 2018
    3:48pm
    No - OG - The Trebor Scheme does not say that - on your carking it, your beneficiaries get the balance of your account. Good Old Trebor The Reliable doesn't know how to cheat... it's a thing learned on the playing fields of Rugby (not the school)... and unlike the Battle of Arnhem was not lost on the playing fields of Eton (many gentleman rankers)...
    TREBOR
    23rd Oct 2018
    10:34pm
    *Illumination round:- The Duke of Wellington once said that the Battle of Waterloo was won on the playing fields of Eton, due to the high quality of officers and leadership (Picton didn't go to Eton.. nor did any of the officers in the Highland Brigade).. someone also wagged that the Battle of Arnhem (1944, British 1st Airborne Division) was lost on the playing fields of Eton, since the Parachute Regiment had many gentleman rankers in it.....

    I know - I know - I get a little of in the clouds sometimes....

    23rd Oct 2018
    12:13pm
    The system of how PAYE tax is paid and how super funds are paid is very complex. Whilst notifications regarding PAYE is reported as soon as an employee receives their remuneration, no such notification is sent to the ATO regarding super. This area needs to be updated. Whilst PAYE tax is not paid at the pay period, this advantages the employer and allows working capital for a business. The only organisation disadvantaged with this system is the government.

    In the case of super funds, the employer is using an employees funds as working capital, without authorisation and without penalty. Whilst it may be cumbersome for businesses to forward super funds each pay period, as it is employees money one of two things should happen; either forward thr super funds at the end of the pay period or pay an amount of interest for the period the employer has the use of the employee's money.

    The compulsory super scheme legislated by Keating is a great system, designed to make retirement easier for people but there have been few adjustments to the system since it was legislated. One of the major stumbling blocks is that politicians don't have this super system so, apparently, couldn't give a fig about how it works. As usual, politicians have let the voters down and since the super system has been in place since 1992, no side of politics is exempt from criticism.
    TREBOR
    23rd Oct 2018
    10:38pm
    Yes - mandatory immediate reporting... though how the ATO could be advised of tax paid but not be aware of super is beyond me....if you earned XXX dollars and paid XX tax - then it's easy to view 9% of XXX dollars... IF YOU WANT TO......

    Then the ATO with a simple calculation, could sent a debt notice for any unpaid super... Colonel C'Link doesn't have that problem with 'debts' ... and the process should be really simple....

    Somebody tell me what we pay the ATO and government for... I'm lost here...
    KSS
    23rd Oct 2018
    12:34pm
    Obviously, superannuation payments should be made and made on time and in full, and the vast majority of employers do just that.

    However, I do think the employee has a responsibility to be checking their super and ensuring they are receiving the payments into their account on a regular basis. The fact that the amount owing is so high indicates that few are checking and even fewer are raising the alarm with their employer or the RTO.

    This is not to blame the victim, should be warning to every employee to check their accounts and ensure they are getting exactly what they are owed. Unfortunately, when it comes to super, no-one thinks about it until they are almost due to retire when it may be too late to do anything.
    Old Geezer
    23rd Oct 2018
    1:10pm
    Most people have no idea where there super is let alone anything else.
    Anonymous
    23rd Oct 2018
    4:07pm
    I agree KSS. The problem is that the super payments can be made each 4 months as a bulk entry, not when the normal pay period falls. Mind you, this is a vast improvement from the initial idea that the super could be paid annually.

    OG you keep making contrary statements which are ridiculous. "Most" people know exactly where their super is held although "some" people who work casually or continually change employers may have lost track of "some" of their super funds.
    Greg
    23rd Oct 2018
    11:24pm
    Another typical exaggeration from OG, knows it all but knows nothing....
    Thoughtful
    24th Oct 2018
    11:15am
    Many employees do check their superannuation and know it is not being paid. A lot of the problem comes from the large number of casual/non-permanent-fulltime jobs these days. Employees are actually frightened to complain or report employers out of fear of not getting any work at all! There needs to be a way of anonymously notifying the ATO about non payment of super ( if they even care ). I have never been a Union person, but these days it appears that somebody needs to look after the workers and it is not the employers nor any other body I am aware of.
    Old Geezer
    25th Oct 2018
    10:16am
    I bet if you asked people on the street very few would know where their super was.
    Greg
    28th Oct 2018
    11:01am
    Thoughtful - Many years ago now my daughter was working, only 17yo, her employer was not paying super and being just a kid had no idea about this "super thing", anyway once I got involved at the time it was reported to the ATO, it is/was anonymous, the ATO go out and do an audit of the business without telling the employer who said what, the ATO found that no one was getting super. Worked out well, my daughter received her super plus some interest plus the employer received a fine.
    Old Geezer
    28th Oct 2018
    9:26pm
    Greg I had one a very similar situation for a young fellow recently. Employer was not putting in super for anyone and sacked them if they asked about it.
    floss
    23rd Oct 2018
    12:58pm
    Good point maelcolium, only way to go, good enough for our politicians god enough for the people that produce the wealth.
    Old Geezer
    23rd Oct 2018
    1:11pm
    Ha ha I thought you wold say that floss.
    TREBOR
    23rd Oct 2018
    4:09pm
    True floss...
    GeorgeM
    23rd Oct 2018
    1:04pm
    So this is coming out of data from the ATO??? And they haven't acted? Just like ACCC, APRA and ASIC in various other prominent cases? Why do he have so many DUD Govt Depts? Another Royal Commission?

    Of course, Super should be paid into Super account at the same time as salary - shows why we need to throw out BOTH Liberals and Labor who have failed to act to stop this BLATANT ROBBERY by companies of workers income.
    Old Geezer
    23rd Oct 2018
    1:12pm
    Some employers only put it in quarterly so it cold be up to 5 months before it goes into super.
    TREBOR
    23rd Oct 2018
    4:10pm
    Refuse to pay your tax and they're on to you like a duck on a June Bug...
    Rae
    23rd Oct 2018
    2:18pm
    Yes and when I ran businesses that is exactly how I did it. Most were contractors but unionised so superannuation was included and was paid. Employers robbing workers need to be dragged before courts fines and jailed if they don't fix themselves up.
    MICK
    23rd Oct 2018
    3:17pm
    I respect any employer, past or present, who plays by the rules and is upfront and honest. Well written Rae and well done.
    East of Toowoomba
    23rd Oct 2018
    4:42pm
    I have had to report two previous employers (both "Mum & Dad" small businesses) to the ATO for investigation for non-payment of my super. Both employers eventually paid in full, but it took a couple of years before I obtained my full entitlements.
    Cowboy Jim
    23rd Oct 2018
    8:34pm
    Good for you - I waited too long, did not really care at a young age either and when the time came to collect, the businesses did not exist any more and the previous owners were gone to the church plot.
    Cheezil61
    23rd Oct 2018
    9:37pm
    Employers get no consequences for ripping off employees yet if employees steal from their boss's cash register they will be charged with theft i daresay!
    Out of balance system & Fair Work Aust is anything but 'fair'
    Companies can be in more trouble if an animal is injured on site than for injuring an employee! What is wrong with a government that allows such things happening!
    Greg
    28th Oct 2018
    11:04am
    In my daughter's case around 20 years ago now she wasn't being paid super - long story but ended up the employer was made to pay the super plus interest to her plus they received a fine from the ATO so there are consequences.
    GregH
    24th Oct 2018
    12:29am
    I was a teacher in private schools and moved around a bit in my younger days. I have since found that these schools use a loophole where they are able to not pay any super for time when the employee is considered to be on probation. Some schools say 6 months and others 3 months of "probation" applies. So if the employee is only there for 1 year, they only get half the super they are entitled to. Other schools paid super for the whole time. Two other issues are 1. they only pay the super every six months costing the employees a LOT of interest, and 2. if the employee leaves a week before that super gets sent to the superannuation fund, then they don't get their super. The other issue was about the schools telling new staff that they can't afford to be sending checks to 50 different super funds so all staff have to use the same fund - something that is not allowed by law. So that means that staff end up with several super accounts and lose more because of the multiple fees. I am sure lots of other companies use these tricks as well. One school didn't pay any super at all and won't reply to my correspondence about it.
    Chris B T
    24th Oct 2018
    9:20am
    When Pay as you Go/Earn employees Group Certificate Issued by and for ATO hasn't picked up on this anomaly. (I've not Been In this situation)
    ATO go after you for not paying the Correct Tax or over stating Deductions.
    It could be that ATO couldn't careless about Compulsory Super.
    There willing to keep unclaimed or so called misplaced Super when everyone has unique
    TAX File Number. Every Year You Have To Send In Your TAX RETURN. (UNIQUE TAX FILE No)
    {;(
    TREBOR
    25th Oct 2018
    12:29am
    I do believe you've hit the nail on the head.... this is a rort handled at the policy level... and for whatever its reason the elected government will not move against it....

    Wonder why?
    TREBOR
    25th Oct 2018
    12:34am
    Oh - I've done computer programming and system analysis etc as well - the formulation of the correct program to check such things as super v earnings paid is so simple a clerk in an office could do it by hand - and a properly programed computer could do it in to time flat... just like the ATO can do you tax return online for you in no time flat....

    All it takes is the will...... I wonder why that will is not present these days, in the days of the Restoration of the Master/Servant relationship....

    How easily we go back 100 years and more... our forefathers fought for the right of all to be equal and be treated fairly - now we have a return to the Master dictating terms and conditions and the Servant taking it or leaving it.'

    Quite frankly, Howard needs hanging slowly for what he did here... instead he is an elder statesman retired on a fortune out of your pocket.....
    Old Geezer
    25th Oct 2018
    10:21am
    You have to apply to the ATO to collect your super if you don't have it. I am helping an employee who got fired because they dared ask where their super was going. That was over 12 months ago now and so far the ATO has managed to collect less half the super owing from the employer. It is being drip feed in each month and will take another 2 years to get the full amount. I suspect the business will be well and truly gone by then so this person will not get their full super entitlement.

    Unfortunately I have dealt with this issue before.