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Category: Business, Economics and Finance / Superannuation / Government and Politics / Community and Society / Work

Employers 'short-changing' workers by withholding super

Sunday, 4 Dec 2016 21:01:30 | Peter Ryan

The study suggests the average Australian worker was short-changed four months of super in 2013-2014. (AAP: Alan Porritt)

About a third of Australian workers are being ripped off by rogue employers who are holding back some or all of their superannuation entitlements, according to a report out today.

Key points:

  • Study suggests average worker short-changed $1,489 of super in 2013-2014
  • Nearly a third of workers eligible for super guarantee being short-changed: Industry Super Australia CEO
  • Small to medium-sized businesses least likely to pay appropriate superannuation, report says

Research by Industry Super Australia and Cbus has found employers dodging superannuation payments are pocketing $3.6 billion per year from 2.4 million workers.

Under the mandatory Superannuation Guarantee, employers are required to contribute the current minimum 9.5 per cent into the super funds of any worker aged 18 and over earning $450 a month.

But using Australian Tax Office (ATO) and Australian Bureau of Statistics (ABS) data, the study suggests the average worker was short-changed a conservative $1,489, or four months of super, in 2013-14.

Industry Super Australia chief executive David Whiteley said despite the evidence of rogue employer behaviour, little was being done to tackle them.

"It's disturbing that nearly a third of workers eligible for the super guarantee are being short-changed," Mr Whiteley said.

"As pension access tightens and home ownership declines, those missing out on compulsory super stand little chance of a decent standard of living in retirement."

Hospitality, cleaning, construction most at risk

The study, Overdue: Time for Action on Unpaid Super, found workers aged under 30 were more likely to miss out on payments with construction, hospitality and cleaning industries most at risk.

It says that small and medium-sized businesses are least likely to pay the appropriate super guarantee to their employees and that $66 billion could be lost by 2024.

Do you know more about this story? Email ryan.peter@abc.net.au

Cbus chairman and former Victorian premier Steve Bracks said the report highlighted the inaction to ensure workers received their full super entitlements.

"It's not unusual to hear from members who have lodged a complaint with the ATO and are still waiting for answers," Mr Bracks said.

"One has told us he was advised recovery of unpaid super could take up to 10 to 20 years."

Industry Super and Cbus are urging greater action by authorities to improve resourcing for the ATO to recover unpaid super and to bolster the enforcement of penalties for employers who fail to pay the super guarantee.

The report also urges the introduction of a enforceable mechanism for real-time payment, reporting and compliance of super payments from employers.

The superannuation guarantee was introduced in 1992 by the Keating government at a level of 3 per cent in a bid to boost retirement savings.

Since then, compulsory super payments have helped build a $2-trillion pool of retirement funds.

AustraliaPlus


 

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