The Super Members Council said paying super on payday would help crack down on unpaid super. (Source: Getty)
Australian workers are missing out on $5.1 billion in superannuation benefits, according to new analysis. The scourge of unpaid superannuation is leaving Australians lacking badly needed retirement funds at a time when needs continue to rise.
Analysis by the Super Members Council has found that around 2.8 million Australian workers – or one in four – will not be eligible for superannuation in 2021-22, costing the average worker $1800 a year and more than $30,000 in retirement.
Advocacy groups have found that those most likely to have unpaid super are women, people in precarious jobs, migrant workers and young workers, and workers in their 20s earning less than $25,000 a year are a shocking half as likely to be underpaid.
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The Super Members Council said the “main driver” of super underpayment was the “outdated” practice of paying super quarterly. The Federal Government announced in May 2023 that it would require employers to pay super with wages from 1 July 2026.
The bill has yet to be introduced in Congress, and Mischa Schubert, CEO of the Council of Super Members, said “the clock is ticking.”
“Paying super on payday will modernise the super system and should significantly reduce underpayments. This is a great example of reform that will benefit super fund members and make super fairer for both workers and employers,” Mr Schubert said.
“Pension underpayments mean many Australians miss out on the game-changing benefits of our superannuation system and end up poorer in retirement. We need a concerted effort to eradicate this.”
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The group noted that the Australian Taxation Office (ATO) had lifted compliance measures to recover workers’ unpaid superannuation debt, but had only collected 15% of outstanding entitlements.
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The group is calling on the government to set compliance and recovery targets for the ATO, as well as extend the Fair Entitlement Guarantee to pensions, which allows workers to claim compensation for unpaid wages, holiday leave and other entitlements.
The amount needed to retire increases
The Association of Superannuation Funds of Australia (ASFA) recently revealed that a single person needs at least $52,085 a year to live comfortably in retirement, and a married couple needs at least $73,337 a year – this data is based on the assumption that each couple owns their own home.
This figure was up 0.9% in the June quarter and 3.7% over the past 12 months.
ASFA noted that rising costs of home, car and private health insurance in the June quarter put further strain on retirees’ savings.
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