Unpaid super costs workers $24.4bn: SMC

Australians missed out on $24.4 billion in unpaid superannuation in the past five years to 2023, reinforcing the need for Payday Super, the lobby group says.

New analysis from Super Members Council (SMC) found one in four workers were underpaid super between 2018 and 2023, equating to almost $6 billion a year being lost in retirement savings.

State-by-state data highlights the uneven impact of unpaid super across the country. While New South Wales recorded the highest total shortfall, other large states also saw significant losses, including Victoria and Queensland where underpayments averaged between $1660 and $1700 per worker annually. Western Australia tracked slightly higher at around $1410 respectively.

The ACT and Northern Territory stood out for higher per-person losses, exceeding $2100 a year, pointing to sharper impacts despite smaller populations.

SMC estimates a worker underpaid $1730 in a single year could be more than $30,000 worse off at retirement due to lost investment returns over time.

Women, younger employees and low-income earners are disproportionately affected. Workers earning under $25,000 a year are among the most exposed, with around half missing out on super entitlements.

The Payday Super reforms, coming in July 1, will require employers to pay super at the same time as wages, replacing the quarterly system. The change is expected to improve transparency and make it easier to detect underpayments early.

The Australian Taxation Office is expected to take a transitional approach to enforcement in the first year, focusing on supporting employers adjusting to the new system.

SMC chief executive Misha Schubert said unpaid super acts as a "silent pay cut" that compounds over time.

"This is money Australians have earned but never been paid - and it's leaving millions significantly poorer at retirement," says Schubert.

Industry groups say stronger compliance and real-time payment systems will be key to closing the gap and ensuring workers receive their full entitlements.