With Australian workers having lost $33 billion in super over seven years, Industry Super Australia (ISA) believes mandating more frequent super payments will solve the issue.
According to Industry Super, the current “outdated” law which allowed super payments to be paid quarterly had led to potential misalignments between one’s payslip and the actual contribution being deposited.
The report identified that in certain cases, employers could exploit these payslip gaps to hide underpayments from their staff, an issue prevalent amongst female employees and those on lower incomes.
Bernie Dean, Industry Super Australia chief executive, explained: “Each year Australian workers are missing out on billions in super that they’ve earned, which is a crushing financial blow for them and their future”.
With Australians losing an average of $4.7 billion in unpaid super annually, ISA pushed for the upcoming Federal Budget to parallel super payments with how wages were paid on a more frequent basis.
“At this Federal Budget our politicians have an opportunity to end the huge super rip off undermining the future economic security of many young women and others on lower incomes,” Dean added.
In addition to minimising the rate of unpaid super, Industry Super’s recommendation would boost the investment returns of those who were paid their super quarterly.
“Aligning payment of super and wages is the right thing to do by workers, boosts government revenue, lifts investment returns and puts all employers on a level playing field.”
Echoing HESTA’s recommendations, Industry Super additionally suggested that super should be paid on the Commonwealth Paid Parental Leave Scheme to improve retirement outcomes for women.
Dean acknowledged that the current super framework is “not perfect” and “there are long-standing issues that the government needs to address to make sure that more women, gig workers and low-income earners get a fairer go”.
Alongside the prevention of unpaid super, ISA pushed the Government to:
- Improve the Your Future, Your Super reforms;
- Implement a superannuation objective which reflects the sentiment “savings used solely as income in retirement”; and
- Extend the super guarantee’s coverage to allow gig workers to receive super.
“Out on the street, people know that super is money that you save for your retirement, and it is this simple notion that should be reflected in any laws designed to protect their financial interests,” Dean concluded.
