Employers accused of fleecing ACT workers on superannuation

Industry Super Australia said an analysis of Australian Taxation Office data showed that in 2019-20, 31,100 employees in the ACT were underpaid $62 million in retirement contributions, potentially leaving their nest eggs up to $60,000 smaller than they would otherwise be.

Industry Super Australia chief executive Bernie Dean said every year thousands of workers, particularly those in less skilled or seasonal jobs, were being dudded by employers making super contributions not commensurate with the size of their pay packet.

Mr Dean said the problem was being exacerbated because only around half of people with a superannuation account regularly checked it.

"Too many people are finding out way too late that they have been missing out," he said. "Missing out on $62 million in super that they've earned is a crushing financial blow for ACT workers."

The ATO is responsible for ensuring that employers meet their superannuation obligations, but Mr Dean accused it of failing to protect the interests of workers.

"They have done a woeful job of compliance," he said. "They just want this problem to go away."

An ATO spokesman said the agency reviews every complaint made to it about unpaid super.

"We take the non-payment of super very seriously and have a focused review and audit program into non-payment," the spokesman said.

He said that in 2021-22, the ATO reviewed 17,300 employers, 15,200 instances following a complaint from a worker and 2100 as a result of "ATO initiated actions".

As a result, the spokesman said, $645 million of super guarantee entitlements was distributed to individuals and super funds.

"Most employers are doing the right thing and paying more than 94 per cent of their Super Guarantee contributions without intervention from us," the spokesman said.

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Mr Dean said that in addition to non-payment and under-payment, some employers were exploiting an outdated law that allowed them to make super contributions quarterly rather than with each pay packet.

He said the law was introduced in the 1990s to assist businesses, particularly small employers, to handle their super payments.

But he said most employers now used automated payroll systems and those continuing to pay super quarterly were costing their staff, who were missing out on having that money accruing interest in their superannuation accounts.

Mr Dean called on the government to update the law to require superannuation contributions to be made on payday.

"Modernising the law so that super is paid on payday will make it easier for workers to keep track of payment, drastically reducing the prevalence of unpaid super," he said.

"While most employers do the right thing, some exploit the outdated laws and lack of engagement to hide underpayments."

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