Errant employers are said to be pocketing nearly $6bn from unpaid entitlements
One in three workers in Australia, or a total of 2.85 million, are being short-changed on their superannuation payments, a new report has revealed.
Errant employers are said to be pocketing nearly $6bn from unpaid entitlements, translating to an average underpayment of $2,070 per employee per year, according to research commissioned by Industry Super Australia (ISA) based on Australian Tax Office (ATO) data from 2016 to 2017.
Some 370,000 workers – who are taking a bigger cut from their paycheque to allocate to their retirement savings – have also lost $1.5bn, the analysis found. Employers in question either deliberately or mistakenly counted these contributions as part of the organisations’ mandatory superannuation payment, the report said.
“We are now seeing the cumulative damage the unpaid super epidemic is doing to workers’ super balances,” ISA chief executive Bernie Dean said in a statement.
“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,” he said.
In 2017, Kelly O’Dwyer, who was financial services minister at the time, prompted the ATO to go after employers who were allegedly boosting their cash flows by skipping their super payments. Despite the efforts, the number of workers still being short-changed has since risen by 90,000.
Dean said the ATO has been “pretty soft” in enforcing rules and imposing penalties on “dodgy employers [who] are getting a free run here.”
“It’s a classic moral hazard where the worst thing that can happen to a boss that does the wrong thing is that they actually have to pay back the money that they should have paid in the first place, and it is daylight robbery,” he told the ABC’s AM program.