ATO's unpaid super recovery welcome - but billions still missing from working Australians' retirement savings
Super Members Council
The return of more than $1.1 billion in unpaid super to Australian workers is welcome progress - but much more needs to be done to ensure every worker receives every dollar of super they have earned, the Super Members Council says.
New figures released by the Australian Taxation Office show more than $1.1 billion legally owed in unpaid super was returned to the accounts of more than 900,000 Australians over the past year.
The ATO also raised more than $1.1 billion in Super Guarantee Charge liabilities, up from $795 million the previous financial year.
The enforcement action is encouraging, but the scale of unpaid super is still billions of dollars a year, says the Council’s CEO Misha Schubert.
“Returning more than $1 billion in unpaid super to Australians is welcome progress. This is money that is owed to working Australians that is finally being paid to them,” Ms Schubert said.
“With workers still losing an estimated $6.3 billion in unpaid super a year, there is much more work to do. The onus should not be on everyday Australians to have to chase the super they are legally owed.”
The Council’s analysis estimates 3.4 million Australians were underpaid $6.3 billion in super in 2023-24, with the typical affected worker missing out on about $1,850 each.
Even with the ATO retrieving $1.1 billion, that still means only one in every six dollars of unpaid super is being retrieved by the ATO and returned to workers.
Over time, the lost investment returns can leave some workers more than $30,000 worse off at retirement.
Payday super is a gamechanger for tackling unpaid super, with more than 70% of Australians in a recent survey agreeing it will help them keep track of whether their employers are paying their super correctly, and more than half saying they will now check their super more regularly.
The reform gives the ATO much more timely information to identify potential underpayments and intervene before unpaid super debts are allowed to accumulate. The longer it takes the ATO to act, the greater the risk that the unpaid super owed will build up to a size that risks it never being paid.
The Council has previously called for the ATO to make fuller use of data matching and proactive investigations, establish public targets for recovering unpaid super, and take more action against deliberate and systematic non-payment.
It also supports extending the Fair Entitlements Guarantee to unpaid super, so workers do not lose their super when an employer becomes insolvent and the money cannot otherwise be recovered.
“Payday super is a gamechanger because it gives workers more visibility and gives the ATO better information to spot missed payments earlier. The task now is to make full use of those tools to detect unpaid super early, recover it quickly, and deter it from happening in the first place,” Ms Schubert said.
“We want to see the ATO continue stepping up proactive compliance and recovery, backed by clear public targets and strong action against deliberate or repeat offenders.”
ENDS
About us:
The opinions above are those of the author in their capacity as spokesperson for Super Members Council of Australia (SMC). SMC, the authors and all other persons involved in the preparation of this information are thereby not giving legal, financial or professional advice for individual persons or organisations.
Contact details:
Mike Dolan, 0474 909 471, [email protected]