Industry Super Australia says the 2017/18 Budget, to be released next week, must address the issue of unpaid superannuation or else the cost of the age pension will increase by $100 million a year.
An analysis of ATO data, by Industry Super Australia, shows that almost one in three employees missed out on a total of $5.6 billion in unpaid super entitlements in 2013/14, leading to those nearing retirement having an retirement balances $23,857 lower on average.
“Using conservative assumptions, Industry Super Australia estimates annual superannuation pension drawdowns are $300 million per annum less than they otherwise would be, costing the Government $98 million per annum in extra age pension payments.”
Industry Super public affairs director Matt Linden said: “Employers who dodge compulsory super requirements are not only robbing workers of their retirement savings but also adding to the fiscal cost of the age pension.”
“These costs will grow over time unless urgent action is taken to address unpaid super.”
Industry Super Australia noted that a Senate inquiry report into Superannuation Guarantee non-payment was due to be handed down on Tuesday – “only one week out from the federal budget announcement”. Mr Linden said, before the release of the report, that Australians expect the Government to act on the recommendations.
“Unpaid super is an easy fix for government. They could align SG payments with wage cycles; extend single touch payroll coverage to all employees; or tighten enforcement and penalty regimes,” he said.
“Australians, especially those who’ve been through the heartache of unsuccessfully chasing down what’s owed to them, expect our national leaders to act decisively.”