Check your super balance – you could be getting ripped off

- October 28, 2021 2 MIN READ
Check your super balance

A new report has revealed that a quarter of all Aussies aren’t being paid their super. Don’t assume – check your super balance regularly, because some of it could be yours.

A new Industry Super Australia (ISA) report has found almost 3 million workers lose on average $1,700 in super each year. And those ripped off on super can end up retiring with up to $60,000 less.

ISA’s analysis of tax data shows young workers and those on lower incomes are most likely to be underpaid their super. It found that underpayments were particularly rampant in blue collar trades and hospitality.

Super scandalous

ISA’s report found dodgy bosses have exploited lax enforcement and laws that allows them to only pay super quarterly into a worker’s fund. Not each time you’re paid your wage.

“This is a $5 billion a year rip off on a quarter of Australia’s workers that politicians are refusing to fix,” says ISA chief executive Bernie Dean. “Super is your money, you should get it paid at the same time you get your wages. By not mandating the payment of super as wages politicians are stopping millions getting what they are owed.”

The report’s key recommendation for fixing unpaid super is to mandate that all employers pay super into a workers’ account when they pay wages.

Not paying super with wages makes it difficult for workers to keep track of their money. So it allows under-payments or even no-payments to fall through the cracks.

Cumulative unpaid super debt an eyewatering $28.8 billion

According to ISA, federal politicians have known about this issue for years but have failed to act.

“Our federal politicians get their super paid on payday, so should all Australian workers,” says Dean.

ISA analysis found that, in the last six years alone, the cumulative unpaid super debt climbed to an eyewatering $28.8 billion.

Check your super balance: How to read your superannuation statement

Unpaid super impacts everyone, because it creates an unequal playing field. The majority of employers doing the right thing are undercut by competitors who are ripping their workers off.

“Most employers are doing the right thing, but they are being undercut by competitors who are getting away with daylight robbery,” says Dean. “Paying super with wages is the only way to get workers their money and level the playing field for business.”

Young blue-collar workers are most at risk

ISA’s analysis of the most recent 2018-19 ATO tax file data found:

  • Almost 1.7 million men and 1.3 million women have been underpaid super.
  • Men lost $3.4 billion and women $1.6 billion.
  • A third of workers under 30 – about 890,000 – have been underpaid.
  • Half of those earning less than $25,000 missed super payments.
  • 30 per cent of those earning between $25,000 and $50,000 were underpaid.
  • About 40 per cent of blue-collar workers (machinery operators and drivers, labourers, technician and trade workers) have been underpaid super.

Workers largely rely on the Australian Tax Office to recover their money as it is difficult to sue for super.

But the report found that unscrupulous employers do not fear the regulator. With good reason, the Australian Tax Office only recovers only 12 per cent of unpaid super annually.  The ISA claims it rarely issues maximum penalties or publicises the little enforcement activity it does carry out.

If the ATO is unwilling or unable to recover workers’ savings, ISA believes the law should be changed so that employees, the Fair Work Ombudsman, and others acting on behalf of workers can.