Superannuation
Unpaid super reaches $6bn

Industry Super Australia is lobbying the Federal Government to improve proposed laws that further address unpaid superannuation, a figure estimated to be about $5.9 billion as at 2015-16.

Speaking to a Senate committee hearing in Canberra on Friday, ISA public affairs director Matt Linden said the group estimates about three million workers were short-changed compulsory super entitlements in 2015-16 at an average of $1995 each.

"This is an issue for people denied their retirement savings; it's an issue for government through increased pension costs; and it's an issue for businesses put at a competitive disadvantage. It has taken policy-makers far too long to get on top of it," Linden said.

Most recently the Government introduced a 12-month amnesty for employers to "wipe the slate clean" over the underpayment of the superannuation guarantee (SG). The Government's new laws could see employers face court-ordered penalties and even jail time.

Linden said while the draft legislation introduced enhanced penalties and extended single touch payroll to small businesses, it did not adequately address the scale of the problem.

"The Bill does not reflect the changing nature of work, nor does it fully harness technological improvements that have occurred since the introduction of compulsory super over a quarter of century ago," he said.

He highlighted the proposed laws fail to protect young people and women in casual, temporary and contract employment "who are missing out on thousands of dollars a year in SG entitlements."

The draft legislation also "continues to shut hundreds of thousands of workers out of the compulsory superannuation system by retaining the $450 a month threshold."

And, "it fails to shift the frequency of SG payments from quarterly to monthly or fortnightly to align with wage payments and enhance transparency."

Finally Linden said the policy lacks clarity around an employee's ordinary time earnings and salary sacrificed ordinary time earnings reporting which makes it difficult to determine entitlements.

Read more: SuperannuationSGFederal GovernmentIndustry Super AustraliaISACanberraMatt LindenretirementSenatesuper guarantee
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