Employers underpaid superannuation by a whopping $33 billion in recent years

New Daily
13 10 2022

Rogue employers avoided $4.3 billion in superannuation payments to 2.8 million Australians in 2019-2020, the most recent year that figures have been available.   

Over seven years, unpaid super has topped $33 billion.

The Australian Taxation Office only recovers 15 per cent of that total, according to research from Industry Super Australia (ISA).

The ATO recovery rate is “a scandal”, Rainmaker research director Alex Dunnin said.

“If that figure is correct it’s outrageous, and it shows the system is not taking this stuff seriously,” Mr Dunnin said.

ISA has called for a number of reforms to turn the situation around.

ISA CEO Bernie Dean said: “Each year Australian workers are missing out on billions in super they are legally entitled to, and that means a less secure future for them and their families.”

The government needed to take the opportunity of the upcoming budget “by mandating that employers pay super at the same time as they pay wages: It’s the right thing to do and it’s affordable”, Mr Dean said.

Employers are required to pay superannuation every three months, while wages are paid weekly or fortnightly.

That lack of co-ordination between the two makes it hard for the ATO to follow up underpayment, an Auditor-General’s report found earlier this year.

“If someone reports that they haven’t been paid their super for two months, then the ATO still has to wait another month to follow it up,” ISA communications spokesperson James Dowling said.



As the chart above shows, super non-payment has declined a little in the latest year for which figures are available – 2019-20 – but still remains above $4 billion a year, despite crackdowns and publicity on the issue.

Cracking down on super non- or underpayment is not always easy because many of the employers guilty of the practice are small businesses, independent economist Nicki Hutley said.

Small business employees lack power
“You can regulate a lot of things, but policing and ensuring compliance are tricky and can be expensive,” Ms Hutley said.

“Even if you mandated super be paid at the same time as wages they are being paid into different accounts.”

Employees in small businesses can find it more difficult to demand their rights than those in big companies, which are more likely to have correct practices in place and are wary of reputational damage from underpayment of benefits.

“People in that position [in small businesses] often feel they don’t have the power to go to their employer to raise the fact they are not being paid super,” Ms Hutley said.

ISA also called for the payment of superannuation on paid parental leave which the federal government has said they favour, but have other financial commitments that need to be addressed first.

Ms Hutley said paying super on parental leave was vital.

“It’s absolutely an important part in helping to close the gap [between men and women in super],” she said.

Super for unpaid leave
Super should also be paid on unpaid parental leave.

“It will be paid on 18 or 26 weeks of parental leave that people are entitled to, but if you take six months off in unpaid leave then super should be paid on that, as well.”

Such measures could be shared between the government and employers, she said.

ISA also called for superannuation performance measures to be tightened to ensure workers were not stuck in underperforming funds for long periods of time.

The legislation demands that performance tests go back eight years from 2024 but this should be extended to 10 years, and the measure should be applied to all super products and fees, ISA said.

Superannuation should be covered by the Fair Entitlements Guarantee, which would allow insolvency administrators to chase it up in the way they do now with wages in corporate insolvencies, according to ISA.

That measure was strongly supported by Mr Dunnin.

“Superannuation debts should be transparent, accountable and chaseable in insolvencies and it would be mean-spirited not to accept that,” he said.

ISA said super non-payment hits low-income earners and women the hardest.

The measures called for would help reduce current inequality in the super system, ISA stated.

“Too many women are at risk of retiring into poverty, and the typical woman retires with about a third less super than men.”

Hi sir Crook,
how many employers have been sent to jail for stealing super money?

Have any been sent to jail?.  Why are people still not being paid their super?.  This should be sorted out.   :(

I've been receiving my superannuation as a monthly "pension" since I retired at the end of June 2019.

I received an email from my super company today informing me that someone was attempting to pay me $142 but it cannot be paid into my retirement account.

I rang my super company and asked them where was this money coming from and they said it was from my last employer before I retired.

I thought "WTF??? 3 years later???"

I am going to call the ATO tomorrow and ask them what I should do about this because I *DO NOT* want to go to the trouble of opening *ANOTHER* new super account to get the $142 and then having to close it again after transferring the money to my bank account (because if I leave it in a new super account it will eventually 'disappear' in fees and charges because no more money would go into the account).

I can't see why the money cannot be paid directly into my bank account by the ATO? Apparently it's on the way back to my former employer right now.

Getting sick and tired of this BS because the same thing happened a few months after I retired in 2019 when my employer "found" another $800 in super that they owed me (despite assuring me my super was fully paid when I retired), I had to open and then close another super account to get the $800 into my bank account.

Then, a few months later the ATO opened another super account in my name (without even telling me!!!) so they could pay me some government "co contribution payment" of about $150. I had to get that money transferred into my bank account and then close that super account.

And if that wasn't enough - earlier this year I was informed by my super company that they owed me $6.20 in fees which they'd overcharged. Fortunately, the ATO ended up paying that directly into my bank account (because I just ignored it and waited to see what would happen which is what I'm also thinking of doing with this latest $142).

The entire Australian superannuation system is cr@p as far as I am concerned - it should have been run by the government (ATO or some new department) with payments (like my super pension) handled by Centrelink.

Bobby. wrote on Oct 13^th, 2022 at 5:33am:

Hi sir Crook, how many employers have been sent to jail for stealing super money?

Not enough. And these grubs are getting away with it because all they risk is being forced to pay what they owe. Any fines are not large enough to act as a deterrent. It's just a slap on the wrist with a downy feather.

Reforms that are needed:
* Superannuation payments should be remitted to the ATO fortnightly, the same way income taxes are paid. The ATO then distributes it to the nominated accounts.
* Any owed superannuation should be paid at triple the amount owing.
* Unpaid superannuation also attracts fines equal to three times the owed money, or ten times for a wilful breach, and no maximum fine. This fine should be a mandatory fixed fine.
* Unpaid superannuation should be a legal reason for employees to withhold their labour without notice, along with unpaid wages.

Bobby. wrote on Oct 13^th, 2022 at 5:33am:

Hi sir Crook, how many employers have been sent to jail for stealing super money?

About the same number of employees sent to jail for feigning sickies.

Bam wrote on Oct 21^st, 2022 at 11:17am:

Bobby. wrote on Oct 13th, 2022 at 5:33am: Hi sir Crook, how many employers have been sent to jail for stealing super money? Not enough. And these grubs are getting away with it because all they risk is being forced to pay what they owe. Any fines are not large enough to act as a deterrent. It's just a slap on the wrist with a downy feather. Reforms that are needed: * Superannuation payments should be remitted to the ATO fortnightly, the same way income taxes are paid. The ATO then distributes it to the nominated accounts. * Any owed superannuation should be paid at triple the amount owing. * Unpaid superannuation also attracts fines equal to three times the owed money, or ten times for a wilful breach, and no maximum fine. This fine should be a mandatory fixed fine. * Unpaid superannuation should be a legal reason for employees to withhold their labour without notice, along with unpaid wages.

Thieves should be in jail - and the money they stole should be returned with interest.

No doubt about it....

Bobby. wrote on Oct 28^th, 2022 at 6:35pm:

Bam wrote on Oct 21st, 2022 at 11:17am: Bobby. wrote on Oct 13th, 2022 at 5:33am: Hi sir Crook, how many employers have been sent to jail for stealing super money? Not enough. And these grubs are getting away with it because all they risk is being forced to pay what they owe. Any fines are not large enough to act as a deterrent. It's just a slap on the wrist with a downy feather. Reforms that are needed: * Superannuation payments should be remitted to the ATO fortnightly, the same way income taxes are paid. The ATO then distributes it to the nominated accounts. * Any owed superannuation should be paid at triple the amount owing. * Unpaid superannuation also attracts fines equal to three times the owed money, or ten times for a wilful breach, and no maximum fine. This fine should be a mandatory fixed fine. * Unpaid superannuation should be a legal reason for employees to withhold their labour without notice, along with unpaid wages. Thieves should be in jail - and the money they stole should be returned with interest.

Steal a packet of hamburger rolls (yuk) and you get hard time...

Steal a few lazy billion from your workers... naughty boy!!

One stop shop - Grappler Super Inc - and a percentage of weekly etc pay every  time excluding allowances.... save a lot of trouble.

Why do not governments actively seek solutions here, do you think?  A few simple rules, with penalties for malfeasance that deter.... why don't they just do it?

Since this thread has been bumped up again I'll report on what happened with this 'mysterious' $142 in super that has suddenly appeared after over 3 years.

After talking to ATO and my former employer it turns out that my super company has had this money in 'limbo' for over 3 years and they've now found it and they've tried to pay it to me but they can't put it into my retirement account so they've sent it back to my former employer (and they were also thinking "where the heck has this come from after 3 years??").

Makes me wonder how much of other peoples' super money is floating around lost in 'limbo' with these super companies?

Oh, and I DO have to open yet another super account to get this $142. Unbelievable.