One in four workers missing out on being paid their superannuation for retirement 

August 28 2024
ABC News

The nest eggs of workers are diminishing because of unpaid super.

In short:   
Almost 3 million Australians missed out on $5.1 billion in legal super entitlements in 2021-22, according to new analysis.

The data released by the super industry found the average underpayment was $1,800 a worker.

What's next?
From July 1, 2026, all Australian employers will be required to pay superannuation to their employees at the same time they pay their wages.


Australia's $3.9 trillion super system is failing to deliver financial security in retirement to millions of Australians.

Women and those in lower-paid jobs have been the worst hit by the growing problem of employers not paying workers their compulsory superannuation payments.

Under the law, employers must contribute at least 11.5 per cent of their employees' earnings, but according to new analysis released by the super industry, one in four workers are missing out.

The latest available data shows that in 2021-22 alone, 2.8 million Australians missed out on $5.1 billion in legal super entitlements, and this compounds by the time they retire.   

The analysis of Australian Taxation Office (ATO) data by the Super Members Council (formerly Industry Super Australia) found an average underpayment of $1,800 a worker. 

Over nine years, the analysis suggests that Australians have missed out on $41.6 billion in unpaid super, with women, people in insecure work, migrant workers and younger workers more likely to have been unpaid.


The Super Members Council says the problem of unpaid super is getting worse.

Men are more likely to work in industries and occupations which have higher rates of underpayment and on average earn more money than women.

The analysis shows men comprised 56 per cent of affected workers in 2021-22, meaning 1.6 million men missed out on $3.4 billion in unpaid super.

But the analysis suggests the impact on women is often worse as they tend to have lower balances and experience other workplace inequities, which compound with the impacts of unpaid super.

About 1.3 million women missed out on $1.7 billion in unpaid super.

Super rip-off

Thousands of employers are failing to pay superannuation, and it's costing workers billions every year.   

The report found that workers in their 20s who earn less than $25,000 a year have a one in two chance of being underpaid their superannuation, and the problem occurs more frequently in industries with lower wages and less stable work patterns.

In 2021-22, blue-collar workers in construction, trades, and transport were the most likely to miss out on super.

The analysis suggests 41 per cent of labourers had unpaid super, closely followed by machinery operators and drivers at 36 per cent, and technicians and trade workers at 31 per cent.

These coincide with industries that experience higher rates of business insolvencies, where unpaid super is common.

The ATO has also identified the retail trade and accommodation food services industries to be in the top three high-risk industries alongside construction in recent years.

Call to legislate faster for payday super
From July 1, 2026, all Australian employers will be required to pay superannuation to their employees at the same time they pay their wages.

This change, which was announced by Assistant Treasurer Stephen Jones in the 2023-24 federal budget, will make it clear to workers when super is owed by their boss.

Mr Jones has described unpaid superannuation as a form of wage theft.

The change should also give the ATO better visibility to chase down unpaid super in real-time rather than years after the fact.

But legislation is yet to be introduced to parliament.

Super Members Council chief executive Misha Schubert said the government needed to pass the reforms during this term of parliament to avoid a continuing mismatch between wages and super.

Super Members Council CEO Misha Schubert
Misha Schubert says paying super on payday will modernise the super system and help reduce underpayments.

"Paying super on payday will modernise the super system and should hugely reduce underpayments," Ms Schubert said.

"Unpaid super locks too many Australians out of the full transformative benefits of the retirement system and leaves people poorer when they retire."

Workers' superannuation is being used to prop up small businesses

Millions of Australians are counting on tougher action against employers who don't pay their workers' superannuation, writes Nassim Khadem.

She said while the ATO's compliance action to recover unpaid super has increased, it still, on average, only collects 15 per cent of the nation's unpaid super bill a year.

The council is calling on the government to set ongoing compliance targets for the ATO on the amount of unpaid super it needs to recover and to make it publicly available.

the problem with super is that the boomers are all going to need to start relying on it when the country is going to have a lot of trouble paying it out

as more people stop working and become takers and cash in their super, thats money going out of the stock exchange, thats companies with less capital available

at a time when inflation is up, energy is up, industrial action is up, red black  and green tape are up.

super (which is basicly a private indexed share portfolio) is kept up as long as woolies, bhp, rio, qantas , NAB, westpac have heaps of capital they can pass back to the takers as they cash their super shares in ...all at once)

this will probably lead to a very bad downward spiral in the economy and the young cant be taxed more to make up the difference

they have no money to buy shares, they can hardly pay rent



its intersting that fools like whiteknight who contantly call for more tax on business and more green tape and black tape and red tape also think that super will pay these workers out handsomely in the nxt 2 or 3 decades


with what exactly 

Quote:



I can understand how it used to happen 20 years ago when you had to do everything manually. it's easy to forget about super with everything else that goes on in the running of a business. Bbut I'm not sure how this happens anymore in this day and age unless it's deliberate. My accounting software automatically works out the super payments and files them away for me to lodge when I'm ready. If I forget to lodge for an extended period of time, I get reminder notices pop up until I do lodge.

There is no excuse for not paying it anymore.

John Smith wrote on Aug 30^th, 2024 at 8:33am:



There's no Super for the rough trade at King's Cross.   

Bobby. wrote on Aug 30^th, 2024 at 8:38am:


Lucky for you then that they haven't completely stopped the pension.

I've said this before but I still believe Australia's superannuation system should have been set up and run by the government themselves.

Something like an "Australian Superannuation Department" working in conjunction with the Australian Taxation Office and Centrelink. Would have made things a lot easier.

But, as I've also said before - I'm sure I know what happened. When the compulsory superannuation scheme was announced I could just see the banks (and others) rubbing their hands together with glee thinking about all the fees they could charge and they said to the government "we'll look after this" (maybe with a few 'bribes' splashed around as well to 'seal the deal').

Personally, I'll be happy to be finished with my super when it runs out in January or February and I'm finally on the age pension. Apart from the "Spanish Inquisition" (NOBODY expects the Spanish Inquisition ) it felt like I was enduring when I set up my super pension in mid 2019 there were also the $1,000 a year in fees I've had to pay since then as I've already mentioned.

Plus, there were 3 occasions after I started my super pension where my super company found money (that had been paid by my employer while I was still working) that they'd 'lost' then found but because they couldn't pay it into my super retirement account I had to open new super accounts to have the money paid in (and the super company immediately starting charging fees of course, plus automatic 'insurance' which I had to cancel straight away) then I had to have the money paid into my bank account then close the super accounts. 3 times!!!

Actually, there was a 4th time where the ATO advised me they were holding $6.20 in fees (lol) which the super company owed me (there was some sort of investigation at the time where the ATO found that a lot of super companies were charging incorrect fees).

I thought - stuff this, I am not going to open then close ANOTHER super account just for $6.20 (it would have 'disappeared' in fees straight away anyway) so I just ignored it then a few months later the ATO paid it directly into my bank account. 

Carl D wrote on Aug 30^th, 2024 at 8:44am:


And do you think it fair that superannuation is also taxed(fees) by the govt?

When people have enough money in retirement that they don't need or qualify for the pension, isn't that an asset to the Govt?

There wouldn't have been any need for all of this superannuation BS if Australia still had a pension fund where a small part of everyone's wages went into the fund every week.

The UK has such a fund worth trillions of pounds and it's there to ensure everyone can access the age pension when they reach pension age.

And it's been set up in such a way that all of the money in the fund can only be used for pensions, nothing else.

The reason why Australia no longer has such a pension fund is because it wasn't set up with the same 'security' as the UK one and the pollies (I believe it was the Menzies government in the 1950's) found a way to get their grubby little hands on all the money and spent it on "other things".