Jail for employers not paying Super Guarantee Bill doesn’t go far enough

A Government Bill, which may become an Act in early 2019, has been welcomed but also criticised for not doing enough about unpaid superannuation.

The Treasury Laws Amendment (Measures No.4) Bill 2018 could result in employers going to jail for not paying Super Guarantee they owe. The Bill passed the Senate last week, but as it was amended it needs to go back to the House of Representatives. Parliament has risen for 2018, with the first sittings scheduled for February 2019. Given the amendments were moved by the Government its passage seems likely, time allowing – there are few sitting days and the Budget has been brought forward.

Industry Super Australia (ISA) welcomed the Bill passing through the Senate, but said it doesn’t go far enough to help the “one in three workers routinely short-changed their super entitlements”.

ISA Deputy Chief Executive Matt Linden said the best way to stop Super Guarantee being unpaid was to address the “outdated laws” that only require employers to pay super quarterly, instead of at the same time as wages.

“Despite these new laws passing through the Senate that have potential to improve reporting of super, employers are still under no obligation to actually pay super contributions at the time they are disclosed on payslips,” he said.

“While progress to stop the unpaid super epidemic is always welcome, anything less than stopping it at the source is just a band-aid approach.”

Research by ISA found that employees didn’t receive $5.9 billion in superannuation entitlements in 2015/16.

“The vast majority of good employers that do the right thing by their workers are being undercut by a handful of rogue employers that are not following the law,” Linden said.

The Australian Institute of Superannuation Trustees (AIST) welcomed the Single Touch Payroll aspects of the Bill – it expands the real-time reporting system to all employers, instead of just those with 20 or more employees.

“For too long some businesses have been able to avoid their obligations to pay super because of outmoded laws,” said AIST CEO Eva Scheerlinck

“Workers have suffered, while non-compliant employers have had an unfair advantage over the majority of employers who are good corporate citizens.”

AIST said it was important that the legislation would shift the burden of identifying unpaid super from individual workers to the ATO

“Up until now, the ATO has largely relied on employees to make complaints to alert them to the non-payment of super – at a very real risk to the jobs of the employees who do this,” said a statement by AIST.

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