How To Know If You're Being "Ripped Off" When It Comes To Super

A new report has found about a third of Australian workers are being short-changed by employers holding back some of their superannuation entitlements.

Research conducted by Industry Super Australia and Cbus shows a high rate of employers evading superannuation payments, amounting to $3.6 billion per year from 2.4 million workers.

Legally speaking, what is required of employers in regards to superannuation?

All employers are bound by the mandatory Superannuation Guarantee (SG), which makes it compulsory for them to pay 9.5 per cent of the ordinary wages of any employee, aged 18 and earning (at least) $450 a month, into a designated superannuation fund.

In other words: If an employer pays their staff $450 (or more) before tax in a month, they must pay super on top of that.

Your super is essentially money put aside that you can access when you retire. Over the course of your working life, these contributions will continue to grow and accumulate. That way, when you do eventually retire, you’ll have money to live off – like a nest egg.

If you want to work out your superannuation guarantee, you can do so with this online calculator.

What has the report found?

According to Australian Tax Office (ATO) and Australian Bureau of Statistics (ABS) data, the average worker was short-changed roughly $1,489 of super, in 2013-14.

David Whiteley, Industry Super Australia’s chief executive, said the report indicates evidence of rogue employer behaviour. “It’s disturbing that nearly a third of workers eligible for the super guarantee are being short-changed,” Mr Whiteley said.

“As pension access tightens and home ownership declines, those missing out on compulsory super stand little chance of a decent standard of living in retirement.”

Who is most at risk?

The study Overdue: Time for Action on Unpaid Super found young workers aged under 30 are more likely to miss out on super payments. Those especially at risk are those in construction, hospitality and cleaning industries.

Small and medium-sized businesses were least likely to pay the appropriate super guarantee to their members of staff.

Why are employers getting away with it?

According to the report, one of the main loopholes is the disconnect between pay slips and the actual time employers need to pay the superannuation. While superannuation is paid quarterly, wages are typically paid weekly, fortnightly or monthly. Therefore, employers can satisfy their legal obligations by not paying super up to four months after the employee is entitled.

The Australian Taxation Office told the ABC it receives 20,000 reports annually from people who believe they haven’t been paid super by their employer.

“We examine every report and, where suitable, we follow up by making contact with the employer to seek confirmation, and if necessary we conduct audits and apply penalties,” said the ATO.

Cbus chairman Steve Bracks said, “It is not unusual to hear from members who have lodged a complaint with the ATO still waiting for answers, let alone their money, years afterwards.”

“One has told us he was advised recovery of unpaid super may take up to 10 or 20 years.”

What can you do if you think your employer has not been paying you super?

If you’ve established that you’re eligible for super guarantee and have worked out how much you should be getting paid by your employer, there are a few steps to follow.

Firstly, chat with your employer. The ATO suggests you ask the following questions: “How often are you paying my super? Which fund are you paying my super to? How much super are you paying? Am I eligible to choose my own super fund?” If you are just starting a new job, these are questions you should ask up front before you actually start working.

Secondly, you can contact your super fund to confirm whether your employer has been paying you correctly. You may need to open a myGov account to check your payment history.

Thirdly, lodge an enquiry. If you have completed the above steps and still believe your employer isn’t paying you enough (or any) super, you can file a report against them here.

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