ATO compliance activity only helping 1% of employees underpaid super

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99% of the employees being short-changed on superannuation by their employers aren’t being helped by the ATO, claims Industry Super Australia.

Analysis by Industry Super Australia estimates that 2.85 million workers are being ripped off to the tune of $6 billion in superannuation a year by “unscrupulous employers”.

Though the ATO has a lower estimate of underpaid super – with a Super Guarantee gap figure of $2.79 billion in 2015/16 (the most recent year available). The ATO is planning to use the newly available data from Single Touch Payroll to chase employers underpaying super, starting with ‘nudges’ and warnings.

“The ATO’s compliance action relating to 25,000 people will only deal with less than 1 per cent of employees currently missing out on their super,” said Industry Super Australia (ISA).

“This means 2.825 million workers will continue to have their super stolen by dodgy employers while nothing is done.”

ISA says the ATO’s record of imposing maximum penalties on employers “caught stealing” superannuation from workers has been “negligible at best”.

“In fact, the ATO has not issued a single maximum 200 per cent penalty in the past five years, according to evidence provided at Senate Estimates in April this year.”

ISA Chief Executive Bernie Dean said: “Increased compliance is welcome but the ATO must apply the full force of the law to these rogue employers.”

“Australians rightly expect to be paid their legal super entitlement. The fact that one in three workers are being robbed of their super each year in this day and age is extraordinary and must be fixed.”

ISA argues the underpayment of super can happen because Super Guarantee only needs to be paid quarterly, “meaning it is easy for payments to fall through the cracks and for unscrupulous employers to deliberately hang on to the money to undercut their competitors”.

“While workers’ might think super has been paid into their account because it appears on their payslip, there is currently no legal requirement that it gets paid into their super account at the same time as their salary is paid.”

There was a plan to have employers report the amount of super paid on payslips, but this wasn’t fully implemented under Labor, and the enabling legislation was repealed under the Coalition.

Industry Super Australia isn’t calling for a change to reporting of Super Guarantee, but for it to be paid at the same time as salary and wages.

89% of people surveyed said employers should pay super at the same time as wages, according to a survey commissioned by Industry Super Australia.

“Federal politicians have their super paid on pay day – it’s time that same protection was extended to all Australians,” said Dean.

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