Huge numbers of workers are being denied their hard-earned retirement entitlements and are missing out on thousands of dollars.
Pressure is mounting on the federal government to stop the unpaid superannuation scourge diddling huge numbers of Aussie workers out of their retirement savings.
Independent not-for-profit Super Consumers Australia, which advocates for the interests of low and middle income earners, has revealed its six-point pre-budget wishlist including a call for new legislation to stop the major problem.
Unpaid super is often not spotted by workers until it’s too late because compulsory contributions only need to be paid quarterly, which means that they are not visible in real time.
Some employees don’t find out until after their company has collapsed, meaning they never get paid what they’re owed.
“Delayed super payments make it very complicated for consumers to discover if they have been paid the appropriate amount of superannuation,” SCA said in its pre-budget submission released on Monday.
“A recent survey found 47 per cent of people think that because super appears on their payslip that their employer has paid superannuation into their fund.
“In reality, employers only have to pay super once every three months.
“This can mean people can go for months without realising there is a problem and by the time they act, a business may have gone insolvent.”
SCA says the government should force employers to pay super at the same time as wages.
Industry Super Australia, which represents 13 funds containing the retirement savings of nearly five million workers, has also made the same call.
In its “Super Scandalous” report last year, ISA estimated unpaid super affected more than one-quarter of Australian employees, costing each affected worker an average of $1700 per year.
The Australian Taxation Office estimates that the unpaid super “gap” in 2018–19 amounted to a staggering $2.5bn.
SCA’s submission also called on the government to fix an information sharing problem that restricts First Nations people in particular, but also other groups in vulnerable situations, from easily and freely finding out if their deceased relatives have superannuation and where it is.
Currently, the law only permits a taxation officer to disclose this information to a legal personal representative of the deceased, such as an executor, and there is a significant cost involved to be declared the administrator of an estate.
“It is often not worth the cost in situations where the estate is of little value or where there is a legitimate question about whether there are funds in any superannuation accounts,” SCA said.
“As a result, many families will abandon their search. Some may unknowingly forfeit significant estates held in super funds.”
The group is also calling on the government to create an independent “one stop shop” for retirement planning financial advice, citing the UK Pension Wise service as a good example.
It says that in Australia, various free retirement advice services are not available through a single portal, meaning some consumers aren’t aware of the different service offerings that may help them.
“At the moment, it is very difficult to get independent strategic and product advice outside of paying for individual financial advice.”
Originally published as Morrison government again urged to end ‘superannuation scourge’ diddling Aussie workers
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