ATO recovers nearly $700m in super entitlements

The Australian Taxation Office (ATO) has recouped and paid $683.8 million to super funds and members as it cracks down on super guarantee (SG) non-compliance. 

During FY23, the ATO recovered over $1.1 billion in super guarantee charges (SGC), which occurs when an employer does not pay super for their staff in full and on time. 

The nearly $700 million distributed back to funds and individuals is a “direct boost to Australians’ retirement savings”, the ATO said, arising from unpaid super, compliance activities and voluntary employer disclosures.

While the vast majority of employers do the right thing, non-compliance with SG obligations remains a key focus for the ATO.

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“Super belongs to employees for their future retirement savings and we do everything we can to ensure Australia’s hard working employees are receiving their lawful entitlements from their employers,” said Emma Rosenzweig, ATO deputy commissioner.

“Unpaid super not only affects employees’ entitlements but it also raises other red flags that a business may not be viable.”

The deputy commissioner encouraged employers who may be struggling to pay super to seek a registered tax professional.

“‘The earlier you engage, the better the outcomes for you and your staff.”

Of the $683.8 million that was redistributed in FY23, $387 million of SG entitlements was also given back to funds of approximately 485,000 employees. 

Some 14,000 SG audit cases were completed by the ATO during the financial year, as well as 134,000 reminders and prompts. Moreover, 56,000 employers voluntarily disclosed $445 million in liabilities, indicating a greater recognition of their obligations.

Rosenzweig added: “We know that mistakes can happen, but it’s our responsibility to ensure a level playing field for all businesses. The sooner we know about unpaid super, the greater chance we have to recover it and work with the employer to get them back on track.”

Employees are recommended to contact their super fund and get in touch with the ATO if they suspect unpaid super.

The announcement comes a month after the government opened consultation on the implementation of payday super in October, which closed on 3 November. Paying SG entitlements on the same day as salary and wages is aimed to strengthen the super system by addressing the issue of unpaid super. 

In 2019-2020, the ATO estimated $3.4 billion worth of super, or almost 5 per cent of the total expected SG contributions for the year, went unpaid.