In just a single year, the number of Australian workers underpaid their superannuation has ballooned to almost three million, new figures released today reveal.
Using the very latest ATO data, the Industry Super Australia estimates show 2.98 million workers were short-changed their compulsory superannuation entitlements, at an average of $1,995 each in 2015-16. This is up from 2.76 million workers in 2014-15.
Industry Super has used the findings at a Senate committee hearing in Canberra today to highlight that laws currently before parliament to address unpaid superannuation, while welcome, must go further.
Addressing the hearing, public affairs director, Matt Linden, said the significant increase in the number of Australians missing out their superannuation entitlements highlighted a big hole in the system.
“This is an issue for people denied their retirement savings; it’s an issue for government through increased pension costs; and it’s an issue for businesses put at a competitive disadvantage,” said Linden.
“It has taken policy-makers far too long to get on top of it,” he said.
Linden said that while the draft legislation introduced enhanced penalties and extended single touch payroll to small businesses, it did not adequately address the scale of the problem.
“The Bill does not reflect the changing nature of work, nor does it fully harness technological improvements that have occurred since the introduction of compulsory super over a quarter of century ago,” he said.
The new ATO data file reveals the proportion of eligible workers underpaid their super increased from 32 per cent in 2013-14 to 33.4 per cent in 2015-16. The total amount of underpayment increased from $5.6 billion to $5.9 billion.
Industry Super is calling on the government to strengthen the Treasury Laws Amendment (2018 Measure No.4) Bill, which currently:
- Fails to protect young people and women in casual, temporary and contract employment who are missing out on thousands of dollars a year in SG entitlements;
- Continues to shut hundreds of thousands of workers out of the compulsory superannuation system by retaining the $450 a month threshold;
- Fails to shift the frequency of SG payments from quarterly to monthly or fortnightly to align with wage payments and enhance transparency;
- Lacks clarity in Ordinary Time Earnings and Salary Sacrificed Ordinary Time Earnings reporting which makes it difficult to determine entitlements.
Submissions to the Treasury Laws Amendment (2018 Measure No.4) Bill inquiry are here
Matt Linden is available for interview. Media contact Sarah Saunders 0409 055 156Industry Super Australia provides policy, research and advocacy on behalf of 16 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of six million Australians
*The above material, whilst correct at the time of publication may include references or statements which are no longer current.