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‘Too little, too late’: Aussies wait 11 months for unpaid superannuation

·4-min read
Pictured: Australian pedestrians, wad of Australian cash, Kate Edwards looks at camera.
Millions of Australians like Kate Edwards have unpaid super. (Sources: Getty, Supplied)

Workers who lodge an unpaid superannuation complaint with the Australian Tax Office wait eight months on average for their case to be closed, and it’s a lag that the Government needs to address, politicians and super experts have warned.

Over the 2020-21 financial year, the average time between an employee making a complaint about unpaid super and the closure of an ATO employer review was eight months, data released to South Australian Senator Rex Patrick revealed.

Half of the unpaid superannuation liabilities raised are then paid within three months, with the ATO saying it is investing in resources and process improvements to cut the wait in 2021-22.

“It is never acceptable for people to be short changed on retirement income, but especially so in an environment of stagnant wage growth. Businesses must do the right thing by their workers,” Patrick told Yahoo Finance.

The ATO data also revealed it completed 16,400 reviews of employers based on employee complaints. Of those, 11,500 employers were found to have owed around $790 million in unpaid superannuation.

The magnitude of the problem highlights the need for reform, Patrick said.

“Whilst the Tax Office appears to be doing a good job, prevention is better than cure,” he said.

“Super contributions should be merged with pay days. This would make it administratively simpler for business and would ensure small payment issues are solved before they grow into large payment issues.”

Marketing professional Kate Edwards is one of the workers still waiting on unpaid super.

She first raised her unpaid superannuation complaint with the ATO in June 2019.

While the ATO has told her that her former employer has begun making repayments, she hasn’t yet seen any money land in her account.

“I’m still frustrated the company has been let off so easily,” she told Yahoo Finance.

“I just can’t see how the ATO can see a company doing this over and over and not do more about it.”

She’s waiting on around $2,000 in unpaid superannuation, with 3 million Australians in a similar position, according to Industry Superannuation Australia (ISA) data released in 2021.

All up, Australians are owed $5 billion with the average dudded worker losing $1,700 in super over the 2018-19 financial year.

And by retirement, those who were unpaid super could be as much as $60,000 worse off.

ISA CEO Bernie Dean agreed with Senator Patrick that mandating superannuation payments coincide with payday is the easiest way to solve the problem.

“During the pandemic, too many people got the shock of their lives that they couldn’t trust their payslip. Their payslip said they would get the super, but when they went to the super account, it wasn’t there,” he said.

“The ATO is falling well short of reasonable community expectations in helping people to get their legal entitlements. But we’ve got to be honest … the ATO will always be behind the 8-ball on this, as long as employers do not need to pay super with wages.”

As it stands, superannuation doesn’t need to be paid more frequently than every quarter, and it means it can be difficult for employees to track whether it is actually going in.

And until the problem is resolved, Dean believes the ATO will continue to take action that is “too little, too late”.

The Federal Government has in recent years said it would crack down on unpaid superannuation, however Dean said the latest ATO figures “make a mockery” of that claim.

“The ATO has shown that it’s still pretty well all up to the worker to chase money that they’ve earned and that they are owed,” Dean said.

“Eight months is far too long to wait for a legal entitlement to be delivered to you.”

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