Reports today suggesting the Government is considering closing legal loopholes that allow employers to shortchange employees who make extra salary sacrifice super contributions is very welcome but will only help one in ten affected by unpaid superannuation.
FOI documents obtained by The Australian of a working group that reported to Government almost six months ago shows progress is being made but greater urgency and a more comprehensive approach is warranted said Industry Super Australia public Affairs Director, Matt Linden.
“Every month that passes without a comprehensive solution to unpaid super millions of Australians are being shortchanged on their retirement savings.”
In December 2016 Industry Super Australia and Cbus Super released a report exposing the multi-billion worker rip-off.
Detailed estimates subsequently provided to a Senate Inquiry, using an ATO data file conservatively calculated a compulsory superannuation shortfall of $5.6 billion that affected almost 3 million or 32 per cent of entitled workers at an average of $2,025 each in 2013/14.
“The report today shows the ATO, which has primary responsibility for policing unpaid super, still hasn’t come to grips with the problem despite having the best data available to identify individual taxpayers at risk of underpayment”, Mr Linden said.
“There also seems to be inadequate emphasis being placed on the key measures really needed to tackle the problem.
“Amending the law to require employers to pay super more frequently – at least monthly but ideally at the same time as wages - is essential to stop super payments being used for business cash flow.
“Also essential is a policy decision from Government to include small businesses in Single Touch Payroll to enable real time tracking of payments, and collection of ordinary time earnings data to verify amounts paid are correct.
“Without taking these extra steps millions of Australians will continue to be shortchanged billions in super, with the Government having to pick up the tab with higher age pension costs.”
Employers are legally required to pay 9.5 per cent of ordinary time earnings in superannuation towards every employee over the age of 18 earning more than $450 (gross) a month. This is the Super Guarantee.
Matt Linden available for interview. Media contact: Phil Davey 0414 867 188
Industry Super Australia provides policy, research and advocacy on behalf of 15 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of five million Australians.
Industry Super Australia Pty Ltd ABN 72 158 563 270, Corporate Authorised Representative No. 426006 of Industry Fund Services Ltd ABN 54 007 016 195 AFSL 232514.
*The above material, whilst correct at the time of publication may include references or statements which are no longer current.