Analysis conducted by Industry Super Australia (ISA) using tax data has shown that more than 188,000 South Australia workers lost an average of $1,500 in unpaid super in 2018-19.
It also estimates that the total amount of unpaid super in the state over the six years from 2013 to 2019 is around $1.6 billion.
In a public statement, ISA stated that while around a quarter of the state’s workforce is suffering “a super rip off each year”, awareness of the unpaid super problem remains low.
“It can often take months for workers to uncover that they have been underpaid, making recovery far more difficult. Making matters worse, 70 per cent of workers don’t realise super can legally be paid just four times a year, not with their wages,” ISA stated.
ISA said that the current laws are outdated and that a lack of awareness amongst workers is being exploited by some unscrupulous employers to not pay super.
“Mandating that super is paid with wages will make it much easier for workers to track when payments are made and uncover underpayments quicker, making recovery more likely,” ISA suggested.
“It is up to politicians to fix the systemic underpayment of super by mandating all employers pay super into a workers’ account when they pay wages.”
ISA noted that unpaid super creates an unequal playing field for businesses as the employers doing the right thing are undercut by competitors who are ripping their workers off.
The superannuation body also stated that workers often rely on the ATO to recover their money as it’s difficult to take legal action. However, the ATO only recovers 12 per cent of unpaid super annually, according to the ISA.
“To fix South Australia’s $280 million unpaid super scourge, politicians should commit to mandating super payment at the same time as wages [and lifting] enforcement activity and force the ATO to issue and publicise penalties for not paying super so that dodgy employers can see there is a cop on the beat,” ISA stated.
ISA is also calling for the Fair Entitlement Guarantee to be extended so that workers can recoup their savings if a company collapses.
If I steal $200 from the till I get fired, definitely have a black mark against my name, might get prosecuted and potentially could face some criminal repercussions… an employer steals $200 of my entitlements and they’re hit with a “pay it back with interest” at most… criminal charges need to be associated with wage theft.
This is a big problem Australia wide. Unfortunately the politicians do not suffer so it is low priority for them. It needs more publicity and Industry and Retail superannuation funds need to become more vocal to fix this.
Whilst I agree with the issue, I’m not sure forcing super to be paid with wages is the right step at this point. It would be an unnecessary cashflow burden for the employers doing the right thing and the instances of lack of compliance would be significantly higher. I’d like to see the ATO taking the lead with this an utilising the information that they get on a regular basis to identify non compliance. They get regular payroll information detailing the super liability for employees and they get the contribution information when the funds receive it. Some simple data matching here would allow for employers to be identified in a timely manner.
The cashflow argument is a hollow one with no substance. All Good employers pay the super anyway so with 6 months or 12 months notice could easily arrange their cashflow to do this with wages. If the government wanted an immediate start without giving businesses a lead in time they could provide the cashflow for 6 months through the PAYGW system. Problem solved. Then the ATO can chase the bad apples in a very focused way.
Well said Albert