Workers missing super payments

A new report highlights that during 2013–14, more than 2.4 million workers were underpaid the superannuation due to them by their employers. Conducted by former Australian Treasury official Phil Gallagher, on behalf of Industry Super Australia (ISA), the report claims the shortfall amounts to an average underpayment of four months’ super, around $1489 for each affected employee.

It is compulsory for employers to contribute at least 9.5 per cent to the superannuation account of each worker who earns more than $450 a month. And yet, as shown by Gallagher’s report Overdue: Time for Action on Unpaid Super, which uses a sample of records for 2013–14 from the Australian Tax Office, workers were underpaid a total of $3.6 billion in just one year alone.

Gallagher warns that if the ATO and the Government do nothing, by 2024 the total in unpaid super could reach $66 billion.

It appears the main industry culprits are construction, mining, manufacturing and hospitality, with the shortfall in super payment largely affecting young and lower-income workers.

Recommendations of the ISA report are:

  • for further analysis of the industries that do not pay the full super guarantee;
  • the ending of the four-month payment ‘holiday’ between when super payment is shown on an employee’s payslip and when it is paid into a member’s fund;
  • closing the loophole that allows employers to count salary sacrifice amounts towards super guarantee obligations;
  • introducing real-time payments;
  • bringing in a mechanism for super funds to recover payments on behalf of members;
  • enforcing existing penalties for directors and employers who fail to meet their obligations.


Treasurer Scott Morrison said that employees should check that they are being paid the right amount of super by their employer, but he also acknowledged that the ATO would be looking further into the ISA report.

An inquiry has also been set up by the Senate to investigate these claims further and should be published in March 2017.

What do you think? Should the Super Guarantee Administration Act 1992 be amended to make it illegal for employers to count employee’s salary sacrifice towards their obligation to pay 9.5 per cent in super contribution? Could the existing penalties for employers who fail to meet their obligations be more strongly enforced?

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