Unpaid super

When I first started working in super over 20 years ago, one of my first jobs was to chase up employers over unpaid super. Back in those dark days, employers had to pay super once a year, and if they didn’t, there was a very good chance that their staff’s insurance would cut out. A huge risk! And certainly the pay slips would be inaccurate as they listed a fortnightly super contribution as ‘paid’ when it wasn’t really paid because it would be paid to the fund at the end of the year.

The unfortunate members also lost out on the investment earnings for that year. To be fair, I should say that in my experience all the large diocesan pay offices, independent schools and other ‘systems’ paid their staff super regularly on a fortnightly basis (like wages). It was always some of the smaller employers in the ‘for profit’ sector who reneged on their payments and had to be chased up. It seemed that super, unlike wages, could be deferred indefinitely as an ‘unessential’ payment. In this scenario members who were owed super had to contact a very busy ATO to try to recover their lost super. If the business went bankrupt (which I have seen), it was a matter of trying to find the responsible parties/employers. Good luck!

Moving out of the dark ages and with required insurance premiums in mind, the rules changed to mandatory quarterly payments to be made within 30 days from the end of the quarter. This was much better and employer contributions could be tracked more easily. Defaulting employers could be contacted and an element of transparency was introduced. Also, super members received the benefit of investment earnings which they previously missed out on. This system is still current.

We are living through a national crisis of wage theft and superannuation forms a significant part of this issue.

Recently, the Morrison government has introduced an ‘employer amnesty’ for unpaid superannuation. The amnesty expires in six months after the bill receives Royal Assent. To be eligible for the amnesty, employers must voluntarily name and pay all unpaid super with earnings going back to the introduction of compulsory super in 1992, but according to Industry Super Australia’s chief executive, Bernie Dean, the legislation does not go far enough.

Dean states, “That members will be reunited with their super is a good thing, but this (bill) does little to fix the causes of the $6 billion unpaid super scandal”. On this view, super theft has taken place on a large scale and the voluntary nature of the amnesty for employers only represents the proverbial “drop in the bucket” of contributions which should now be in member accounts.

Australian Institute of Superannuation Trustees CEO, Eva Scheerlinck, said the amnesty would have the effect of rewarding poor employers while punishing the good ones. She stated in a media release: “Superannuation is deferred wages and, in a compulsory super system, members must receive their full entitlements when they are due. Rather than providing an amnesty, strengthening employer penalties for failing to pay super is needed.”

ACTU President Michele O’Neil has stated in a media release (24 February 2020), “This law will recover a tiny fraction of the billions in super estimated stolen since the beginning of the system and will do nothing to change the behaviour in the business community.”

Ms O’Neil further commented: “We are living through a national crisis of wage theft and superannuation forms a significant part of this issue. Instead of punishing the employers who have been stealing money from their employees, potentially for decades, the Morrison government has waved them through without any penalty whatsoever.”

The best way to check if your employer’s super payments have been made is to log onto NGS Online and check your account. All employer contributions with the dates can be seen, and if you have any questions your first port of call should be your employer. Also, your NGS Super Member Statements contain all employer contributions (and salary sacrifice contributions) with amounts and dates. If you are not satisfied with your employer’s response, then contact your union. And the last resort should be the Australian Tax Office.

Bernard O’Connor
NGS Super Company Secretary/Manager Insurance and Complaints
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