Unpaid super affects 1 in 4 workers
A recent report revealed that one in four Australian workers have unpaid super. We explain the issues, how to check if you’re owed money and what to do if you’re affected.
The issue of unpaid super affects millions of workers across Australia. This can have a major impact on when you can retire. And it usually happens to those who can least afford it.
How large is the problem?
According to a report* published by Industry Super Australia (ISA) in late October 2021, around 2.9 million workers have unpaid super in Australia. That's more than 1 in 4 employees. These people have lost an average of $1,700 a year in unpaid super, which can add up to a lot during your working life. In some cases, people will have up to $60,000 less in their hands at retirement.
Across Australia, some employers contributed around $5 billion less than they should have during the 2018/19 financial year. And this is not a new problem. According to the report, the average amount of unpaid super is estimated to be $4.5 billion a year over the past six years.
Why is it a problem?
While most employers do the right thing, some of them avoid their obligations by not paying super. Others underpay super, pay it late, or pay it to the wrong super fund in error. Most Australians trust their employers and assume that the money is being paid correctly. Even though the amount of your super is written on your payslip, it may not mean the money was actually paid to your account.
Who can be affected?
According to the report, those most affected by unpaid super are migrants, younger workers, those on low incomes, the low-skilled and employees working in the construction, transport, trades, hospitality and accommodation industries. And it's often small employers that are responsible.
Why should I check my super account?
It's important to check your super account regularly to ensure your employer is making regular super guarantee (SG) contributions, and it's the correct amount, which is generally 10% of your wages. This also ensures that you're getting the benefits of compound interest on your super's earnings.
Keeping track of your SG contributions means that you'll be more likely to notice if some is missing, so you can contact your employer to fix the situation quickly.
Having regular SG contributions paid correctly also means that you will continue to be covered by insurance inside super. This will assist if you get injured and are unable to work, by helping you to pay your bills, mortgage, rent, medical expenses, etc.
According to the ISA report, some of the rules around paying super need to be changed. For example, the ISA wants all employers to pay super at the same time as wages. This would make it easier for workers to keep track of their super payments. Currently, the requirement is for employers to pay super at least four times a year.
How do I check if I have unpaid super?
You can also check your super using the Australian Tax Office’s (ATO) online services through myGov.
Note: New super funds can take up to 6 months to appear on myGov.
What should I do if I have unpaid super?
If you believe that your super has been unpaid, underpaid, paid late, or paid to the wrong super fund, the first step is to contact your employer and ask them to fix the issue.
However, there may be times when employers are unable (or unwilling) to resolve the issue or are not contactable. In these cases, report the issue to the ATO using their online tool. You'll need to provide:
- your personal details
- your tax file number
- the period of your enquiry
- your employer’s details, including their ABN (Australian business number)
Note: The ATO can only investigate enquiries about unpaid super for a period once the employer's due date for lodgement has passed.
In some cases, people have successfully tracked down their unpaid super through their union, so that may also be an avenue worth exploring. Others have taken legal action against their employer, in the hope that they will reach a settlement before the case is heard. However, this process can take years and there is no guarantee that you will recover your unpaid super, so explore other steps first.
Check in with your super
An easy way to check that your super is being paid is to do a super health check. It’s important to do this every year to make sure your super account is looking healthy.
These six easy steps can make a big difference to your account:
- Make sure your super is paid on time
- Stop paying unnecessary fees
- Choose how your super is invested
- Tell us who should get your super when you die
- Grow your super faster and pay less tax
- Protect your family if something happens to you
There are two ways you can do a super health check:
- Work through each step of the super health check with one of our super specialists, or
- Use our online resources to make your own way through the super health check.
To organise a super health check visit lucrf.com.au/healthcheck.
Have you got a question?
Contact us for help.Get in touch