Australian workers are losing more than $4.7 billion annually due to unpaid superannuation. Right now, millions of people are struggling to access the benefits they’ve earned. A recent case concerning Richard Aichinger’s son serves as a wake up call to the ongoing and prevalent issue of unpaid superannuation. None of his super payments have been made in the last 12 months. You lodged the issue with the Australian Taxation Office (ATO) earlier this year. Sadly, that fix hasn’t quite done the trick yet.
The reality is indicative of a larger pattern that has left millions of workers—especially those in service industries around the country—in similar situations. A 2024 report from our Super Members Council found that number to be shocking. Currently about 2.8 million Australians aren’t receiving their complete super entitlements each financial year. On average, these impacted workers forgo around $1,810 in superannuation contributions.
Ongoing Struggles for Workers
Richard Aichinger wrote about the difficulty his son, Eoin, had in clearing hurdles to receive his superannuation benefits. When Aichinger’s son would have started to access his super after leaving his job, he actually received his super four months later. At issue at the moment, he’s owed $5,000 in superannuation that was never paid.
“I was just gobsmacked. Here’s my son as an apprentice, reaching out for a bit of support and help, and no one gets back to them,” Aichinger said. He said that his son understandably feels daunted by the prospect of reporting it to the ATO. His worry over losing his job just makes him more nervous.
The ATO has been a first mover on the issue of unpaid superannuation. An ATO spokesperson recently emphasized that non-compliance with superannuation was a serious matter. As part of this approach, they have introduced a targeted review and audit program to address non-payment of super guarantee obligations.
“The ATO takes non-compliance with superannuation seriously. We have a focused review and audit program into the non-payment of super guarantee to protect workers and their retirement savings,” – ATO spokesperson.
Like Aichinger noted, there are notable holes in the enforcement of compliance. Lastly, Mr Simson expressed disappointment in the ATO’s apparent lack of resources to effectively manage these issues.
I’m just really disappointed by that. If the ATO is the agency who’s assigned the task of policing that, then why are they apparently under-resourced? he questioned.
The Scale of Unpaid Superannuation
The statistics surrounding unpaid superannuation are alarming. In 2020-21, the ATO issued just under 10,000 penalties for non-payment of super. Even so, over 80% of unpaid superannuation is never recovered each year. The ATO’s enforcement efforts in that timeframe led to $659 million in unpaid super being paid and $300 million in enforced penalties.
During the meeting, Super Members Council member Misha Schubert underlined how urgent the issue is. She doggedly exposed the truth that every week in Australia, about $100 million that is due to workers in superannuation just doesn’t make it to their accounts.
“Every week in Australia, $100 million that is owed to workers in super does not make it into their super accounts,” – Misha Schubert.
Schubert pressed the ATO to increase compliance and debt recovery measures. This is a necessary step in making sure Australian workers get all the superannuation they’ve earned and are entitled to. She cautioned that the majority of businesses do fulfill their requirements but added that far too many do not.
“The size and scale of that challenge is shocking, and there needs to be further uplift in the proactive efforts to recover that money for workers,” Schubert added.
Potential Solutions and Legislative Changes
Recognizing these persistent struggles, advocates are pushing for legislation like payday super. If passed into law, this proposed Responsible Employers Payment Initiative would mandate employers deposit superannuation contributions with each payday. This is perhaps why Gabrielle Marchetti of JobWatch warmly welcomed Victoria’s potential reform, arguing that it would have a big impact on increasing compliance.
Unfortunately, these practices are still not enough to protect workers from falling into financial danger. Trent Lund pointed out how some businesses depend on employee super contributions to make their own cash flow crunches go away. He likened this practice to betting with employees’ long-term savings.
“It’s gambling because you’re actually using working capital which is not yours — it’s actually an employee’s future super,” – Trent Lund.
From 1 July, the SG rate will rise from 11.5% to 12%. This new development will impact the way in which companies handle their super payments. Advocates hope that this change will motivate employers to do more to comply with their super obligations.
From JobWatch’s experience, key industries where workers report unpaid super are hospitality, construction, retail and cleaning. These are sectors where the biggest problems lie in compliance and enforcement of superannuation rights.
“In JobWatch’s experience, the industries typically that people are calling us about unpaid super would be hospitality, construction, retail and cleaning,” – Gabrielle Marchetti.
