Laws costing Aussies millions in super

Font Size:

Industry Super Australia (ISA) is campaigning against laws that cost Australians millions in lost super interest.

Analysis of Australian Tax Office (ATO) data in 2015 revealed that laws allowing employers to pay super quarterly rather than fortnightly have cost Aussie workers around $225 million in interest.

ISA found that around 2.3 million workers aged 20-29 collectively missed out on $35 million in interest in 2015 alone, while 1.9 million aged 40-49 missed out on $55 million, and 1.6 million aged 50-59 missed out on $50 million.

This represents around $12,475 by retirement for a full-time worker aged between 20 and 67 years old.

Super payments can be withheld by employers for up to four months at a time, which ISA chief executive Bernie Dean said, “highlights the absurdity of continuing with laws that allow superannuation entitlements to be withheld for up to four months”.

“We’ve welcomed any and all efforts to improve compliance, but it won’t change the fact that some employers will go on using the payment hiatus for business cash flow,” said Mr Dean.

“Essentially, workers are subsiding businesses at the expense of their retirement savings.

“Every penny counts in retirement, and this interest could be the difference between having enough and going without. It’s not fair, and the rules must change,” said Mr Dean.

A recent ISA poll found that 70 per cent of Australian workers are unaware that even though their payslips show super contributions on a weekly or fortnightly basis, those super payments weren’t actually made.

ISA has called on parliament to align superannuation payments with wage payments, as per a Senate Committee recommendation in 2017.

Were you aware that your super payments weren’t being paid in line with your wages? How much super would you have missed out on?

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Superannuation reforms continue to hurt retirees: Report

Super fund members are the losers of policies providing concessions to the for-profit s

Chilling warning on end of good super returns

Super is running out of investments, foreshadowing poorer returns, says funds chief.

Super changes needed now: Government urged to act fast

Parliament urged to use this sitting week to pass laws to protect super savings.

Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

Contact:
LinkedIn
Email

82 Comments

Total Comments: 82
  1. 0
    0

    Oh sure . And how much have workers “saved” when the timing of their contributions sent during a falling market enabled them to buy stocks cheaply

    • 0
      0

      Oh… about as much as they’ve ‘lost’ when the timing of their contributions sent during a rising market enabled them to buy stocks dearly…

    • 0
      0

      Exactly my point

    • 0
      0

      If only market fluctuations could be timed – think of the rush on Fat Day – the day when investors could buy bargains to enhance their portfolio and potential future earnings…… of course, such a rush would cause a price rise.. but, oh, well…

      When you play poker machines, you take the hits with the highlights…

  2. 0
    0

    Interesting – every day a new one…

  3. 0
    0

    What an ignorant troll you are. Markets go up much more than they go down. Workers are losing a lot of money because of this rort – employers are using employees money to assist with their cashflow. That should be illegal, it is theft of workers’ entitlements.

    Another aspect of this rort is that when people use the new concessional limits, they cannot use the full amount as they are not sure when the SGC would be paid into their account (penalties for getting it wrong are very high).

    It’s about time something was done about this – if wages and taxes can be paid regularly, so can SGC payments.

    • 0
      0

      This was a reply to Lothario

    • 0
      0

      See my response below .
      Anyways no need to be rude mate . You sound like a very unhappy person
      It’s not a rort
      Small businesses need time to reconcile their figure and make payment

    • 0
      0

      exactly right 54-11 – in this day and age of electronic transfer SGC can be paid at the same time they do wages and taxes

    • 0
      0

      My last job, driving a club bus – the boss had no problem paying it in fortnightly – he was an accountant by training……

    • 0
      0

      Lothario – if a business in 2019 needs time to reconcile their figures they shouldn’t be in business. Payment should go to the super fund the same day as you’re paid. All they have to do is pay the 9%plus (whatever it is at the moment), nothing to reconcile.

    • 0
      0

      I paid contractors and their super and tax at the same time. It was never an issue. Small businesses need to become efficient or get out and let others who can manage better have a go.

      Greg is right it is an accounting practise that is clearly wrong. The sums not being paid at all are enormous.

    • 0
      0

      The payroll system details the amount on the employees payslip, so all calculations have been done. Same time the employer sends the payroll file to the bank, a file to the super companies could also be sent. It’s a nonsense to suggest otherwise. Superannuation was sold to workers as part of their salary. Pay it at the same time

    • 0
      0

      Lothario, I was the Accountant for a company that employed about 60 full-time and 35 part-time staff and we paid the SGC to the various Super Funds the day after pay-day.

      Time taken for reconciling figures went out with the introduction of software packages such as MYOB. Before such software, it still only took a short time (not even hours)to determine the SGC. All you needed was competent financial staff.

    • 0
      0

      Captain – if you were an accountant worth your salt , you’d make sure the payment to the supoerfunds was made on the last day to meet compliance requirements and if there were no penalties for missing the dates then I’d pay it even later
      Your loyalty is to your company first and maximizing its working capital requirements / revenue
      Obviously a bean counter and not a financial strategist

    • 0
      0

      Lothario, our Board of Directors and the Staff had an agreement regarding the SGC payment and I complied with the agreement. I was a very good bean-counter and and a fairly good financial strategist. Before the company hired me they made small yearly losses, however within a year of me being hired the company made a reasonable profit and the profits grew each year that I was employed there.

    • 0
      0

      Well done Captain
      You make a Chartered Accountant and CFO like me very proud
      I would have hired you :))

  4. 0
    0

    Any campaign/survey by the rentseeking, union controlled ISA needs great caution and a detailed examination of the assumptions used.
    Industry funds have long lusted after control of all superannuation mainly for the benefit of their union boss directors and using members funds for political campaigns.

    • 0
      0

      This has little to do with ISA – this is about workers’ entitlements

    • 0
      0

      What the hell are you talking about – this is about paying into super more regularly, any super fund.

    • 0
      0

      Not A Bludger, why do you always attack the unions. They have done a lot of good for the Australian worker. It was the unions that helped set up super.
      After long research I now realise that the Industry funds are far, far superior to the retail funds in every way largely due to the fact that they have union representation on the boards that work for the membership & aren’t greedy like the retail funds.

    • 0
      0

      Whoever you are imitation “Lothario”, you’re one sad little prick if you have to resort to posting as me .

      But it’s ok , I’m used to being idol worshipped

    • 0
      0

      I think I like the new Lothario

  5. 0
    0

    What’s wrong with employers paying super with the employees pay cycle? Weekly, Fortnightly and Monthly. This way a worker will miss out on 3 months super when they retire. That is wage theft as usual.

    • 0
      0

      Exactly. Every pay system is quite capable of doing this – in fact, that would automate the process much more than it is now. The only reason it doesn’t happen is so that employers can steal workers’ money. How many businesses have gone bust with these amounts unpaid.

    • 0
      0

      54-11 – Yep they have the money to use while it should be in YOUR fund or they don’t pay at all, especially with the kids, they don’t know, they don’t understand and get ripped off.

  6. 0
    0

    Where I work we are paid fortnightly and super is paid monthly.

    The only time this can be a problem is if you are salary sacrificing and the payment due in June is paid in July which can mean you over shoot the salary sacrifice cap the following year.

  7. 0
    0

    I agree with super being paid more promptly. Been saying this for years. I would have thought by now that it had fallen into line with the ATO monthly reporting schedule. We have the technology now to pay all of an employees wage on the wage cycle so there is no excuse. And no need for more clearing houses where somebody makes big bucks for holding the loot.

  8. 0
    0

    Some employers ,example fuel outlets .dont pay out for up to a year . This might just be the tip of the iceberg.

    • 0
      0

      Well by law they cannot do that, should contact the ATO. They will investigate WITHOUT letting the employer know why they have targeted that particular business so you won’t be implicated.

    • 0
      0

      Hairy, Greg is right. Speak to co-workers. If they have the same problem get them to also contact the ATO. The ATO will move a lot faster if they have more than one complaint from the same employer. If you are the only one then expect long delays.

  9. 0
    0

    I think the whole Superannuation Act and Regulations need to be overhauled for accountability and transparency. The employees and employers contributions need to be separately accounted for in a timely manner, as well as interests, dividends, and capital gains. On the other side of the ledger, all actual and accrued expenditure such as charges and fees must be openly scrutinized and reported.

    As a result of the Bank Royal Commission, the ISF returned to me almost $6,000.00 for two consultation services in the past four years, which I didn’t have. That equals to 16.66% of my annual allocated pension. I was absolutely gobsmacked.

    • 0
      0

      The employer and employees contributions are shown separately on my super statements so not sure what you mean here.

    • 0
      0

      KSS, they are not accounted for at the same time. Some people don’t even know that their employer has sent in their share of the contributions. If an employer goes bankrupt, it will be very difficult to retrieve their outstanding contributions from the receivership.

  10. 0
    0

    Did we not forgo wage rises so employers could contribute super instead for retirement.so the use of super payments by employers is actually wage theft.and the rorts and theft from employees is still being practised . Year after year , no goverment has changed anything except the names .just like the pension fund is now welfare . Trust pollies at your own risk. Lower than used car salesmen

    • 0
      0

      Yes and we are 26 years into compulsory saving through superannuation.

      Notice the COMPULSORY bit. It should be paid at the time pay and tax is allocated.

      Automatically. Using a computer.

Load More Comments

FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Finance News

RBA reveals why retirees have to bear the brunt of low interest rates

The Reserve Bank of Australia (RBA) knows that the negative consequences of low interest rates disproportionately affect retirees, but believes...

Diseases

Blood pressure medication helps even the frailest seniors live longer

Taking blood pressure medication as prescribed helps seniors aged 65 and over people live longer. And the healthiest older people...

Estate planning & wills

Common mistakes when writing your will

It can be daunting and even overwhelming at times, but writing your will is an essential part of planning for...

Food and Recipes

Silky Vegan Chocolate Mousse

You may be sceptical about using tofu in a dessert, but I think you'll be pleasantly surprised. This silky chocolate...

Wellbeing

What is deep sleep and how can you get more of it?

You may have heard that adults need between seven and nine hours of sleep each night. But the quality of...

Technology News

Why you may have to buy a new device whether you want to or not

Michael Cowling, CQUniversity Australia We've probably all been there. We buy some new smart gadget and when we plug it...

COVID-19

Poll reveals support for vaccinations and compulsory masks

Fewer Australians say they would take a coronavirus vaccination now than at the outset of the pandemic, but a big...

News

How to avoid being tracked online

The internet is most likely monitoring every move you make through your computer or device and, unless you know the...

LOADING MORE ARTICLE...