Superannuation

“Epidemic”: $350 million more unpaid superannuation as industry urges crackdown on dodgy employers

Matthew Elmas /

Industry Super Australia (ISA) has called for new laws to force employers to pay superannuation at the same time as salaries, saying the retirement savings gap has become an “epidemic”.

Analysis of 2016-17 tax office data conducted by former Treasury official Phil Gallagher for ISA has found an additional 90,000 workers have been shortchanged on superannuation since 2013-14, totalling $5.94 billion in unpaid entitlements.

The gap between those paid correctly and those ripped off has increased by 25%, or $350 million, over the last three years, ISA said.

“This should be a wake-up call for the major parties. We are now seeing the cumulative damage the unpaid super epidemic is doing to workers’ super balances,” Industry Super Australia chief executive Bernie Dean said in a statement circulated on Friday.

“The easiest way to end this exploitation and ensure workers are paid their super is to simply legislate that all employers must deposit money into a worker’s super account at the same time as they deposit their salary into their bank account.”

Efforts to tackle the superannuation guarantee gap are ongoing, with the government passing new laws late last year that enable the commissioner of taxation to compel employers to pay unpaid superannuation entitlements.

Labor has made its own commitments, with Opposition Leader Bill Shorten last year committing to tougher penalties for businesses who skimp out on their obligations.

“Dodgy bosses who deliberately avoid paying their workers superannuation are breaking the law. It’s theft. If I’m PM, they will be punished to the full extent of the law,” Shorten said last December.

If elected, Labor will change the rules so superannuation is included in the National Employment Standards, giving workers the ability to pursue employers for unpaid super through the courts.

The tax office would also be given new powers to police businesses who make false or misleading statements about super payments.

But lobby groups say policy solutions so far have been piecemeal, and want real-time super reporting brought in to stem the tide of dodgy employers ripping off workers.

During consultation for the introduction of single touch payroll (STP), introducing real-time superannuation reporting was discussed.

David McKellar of Allied Business Accountants says the policy would affect small business cashflow, but may not be all bad.

“It would remove the lump sum nature of the payments, and essentially split it into a smaller more regular payment, which is preferred by many businesses,” he tells SmartCompany.

“For small businesses especially, who often use their cash balance as an indicator of business performance, it assists them to better assess the performance of their business by removing a liability.”

McKellar says businesses should take advantage of STP becoming mandatory and adopt automated super payments at the same time.

“The introduction of STP will give the ATO significantly more visibility over employee wages and super obligations, and they will be able to identify non-compliance with SGC rules, which will result in an increase in audit activity in the area.”

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Matthew Elmas

Matthew is the news editor at SmartCompany. You can contact him at [email protected].

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