Salaried workers missing out on “alarming” amounts of super

Almost one million working Australians aren’t receiving superannuation and the often-cited cause of self-employment isn’t the only driver, with new research by Mercer finding that 43 per cent of these employees were in salaried jobs.

Breaking down the careers of those without super more, the Unsupered report found that a surprising 21 per cent were managers, while 15 per cent were technicians and trade workers and 13 per cent were in clerical and administrative roles.

Mercer’s David Knox told Super Review that potential causes for salaried workers not receiving super included them not wanting to ask their employers, small businesses without enough cash flow withholding payments, or the quarterly payment system meaning employees didn’t realise they hadn’t been paid.

Knox recommended a three-pronged response to the problem, which would have an immense impact on Australia’s retirement savings and the strain the Aged Pension was under in the future, with the Government, regulators, and superannuation funds all having a role to play.

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Knox suggested that the Government could legislate to ensure it was more difficult for both employers and the self-employed to get away without paying super, with possible solutions being changing superannuation payment requirements to time with salary payments and using the BAS system to keep track of whether self-employed workers were doing the right thing.

He believed that the Australian Taxation Office (ATO) was the logical regulator to act on the problem, saying that it was playing an increased role in the super space and would continue to do so.

ATO Deputy Commissioner, superannuation and employer obligations, James O’Halloran, told Super Review that the Office was already working in this space, pointing to the expansion of single-touch payroll and payday reporting as one example. Many in the industry had expressed hope that this development could lead to the same system soon applying to super payments.

O’Halloran also said that the ATO was cracking down on enforcement of employers failing to meet their superannuation guarantee obligations, and had increased the amount of risk reviews it initiated in the last year rather than being solely responsive to consumer concerns. Such reviews represented 40 per cent of the ATO’s overall work in this space.

The ATO was given increased enforcement powers in the last sitting of Parliament too, now having the ability to serves notices to educate to employers, notices to issue a direction to pay and making it an offence to fail to comply, and the ability to make directors themselves pay a company’s unpaid super debts. The Office culd now also apply to the court for a ‘security deposit’ if it was dobtful of a company’s suprannaution guarantee compliance record.

O’Halloran said that the powers would be used “both sensibly and judiciously”, but warned that they would make it more difficult for employers to get away with failing to pay superannuation.

Finally, Knox believed that super funds themselves needed to take a more active role in monitoring members’ payments. While he acknowledged that education and communication of members could play a role, he said that such a response presumes interest from consumers. As this was often absent, funds could instead track members’ payments (which was relatively cheap now thanks to technology) and then contact those who weren’t receiving their super.

Knox also suggested that funds could connect with new migrants, as it was often those who were unaware of their superannuation entitlements that were missing out on payments.

The total amount of missing superannuation represented a $4 billion hole in super savings annually, which could add up to $145 billion across the working lives of those missing out. On an individual level, one-third of the ‘unsupered’ workers had no superannuation savings at all, while 49 per cent had less than $6,000.