ATO needs more funding to audit businesses not paying Super Guarantee: ASFA

The ATO should receive more funding in order to better audit businesses for unpaid Superannuation Guarantee, says the Association of Superannuation Funds of Australia (ASFA).

ASFA CEO Dr Martin Fahy said that recent reports showed there was “substantial” non-payment of, what should be, compulsory superannuation entitlements.

“Non-payment of super is increasing in Australia with at least 690,000 or 6.5 per cent of the workforce affected annually,” he said.

Audits by the ATO’s superannuation and small business departments have a greater than 70% success rate in identifying unpaid super obligations, according to the Australian National Audit Office.

“We are calling for an additional $10 million per year for the next four years to help the ATO detect employers who are short-changing workers,” said Dr Fahy.

“Money that should be going into super and helping drive economic investment and long term improvements in individual retirement outcomes is being lost.”

“People need that money to live better post-work and the entire Australian community benefits when the right thing is done for employees. Unpaid super means a drag on age pension expenditures by the government. That is a cost to everyone.”

ASFA is also calling for a change in how unpaid Super Guarantee is treated in cases of employer insolvency and bankruptcy. The ATO has indicated that around 50% of the superannuation debts they deal with relate to insolvency.

“This area is currently subject to a complex combination of legislative provisions but the focus should be on achieving the maximum possible recovery on behalf of affected employees,” Dr Fahy said.

“It’s rough enough when Australians impacted by insolvency and bankrupt employers lose their job.”

“To lose their super too is the ultimate insult because the long-term benefits of compound interest means the loss is long-term and compounding too.”

ASFA wants superannuation to be included in the definition of unpaid employment entitlements under the Fair Entitlements Guarantee, which it estimates would cost up to $150 million per year.

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