Employers continue to rob workers of their super entitlements, research shows
Industry Super Australia (ISA) has called on major political parties to act on rogue employers withholding super payments to prop their own books.
New ISA analysis of Tax Office data from 2016/17 by ex-Treasury official Phil Gallagher has revealed the extent of the theft, suggesting that the number of workers robbed of their super has climbed by 90,000 to a total of 2.85 million since 2013-14, totalling $5.94 billion in super entitlements.
The gap between employers paid correctly and those robbed of their super has increased by 25 per cent in just three years, or $340 million, the research shows.
"This should be a wake-up call for the major parties. We are now seeing the cumulative damage the unpaid super epidemic is doing to workers’ super balances and it’s very clear," said Industry Super Australia chief executive Bernie Dean.
The report has also placed an emphasis on dodgy employers who exploit a loophole in the law where if workers choose to salary sacrifice and contribute to their super, employers then ‘count’ that as their super guarantee payment for that worker – robbing them of their rightful entitlement. This unfair exploitation has seen 370,000 workers who think they are doing the right thing lose-out on super payments totalling $1.5 billion, ISA revealed.
"Allowing employers to continue robbing workers of their super entitlement means these workers are going to end up worse off at retirement.
"While most employers do the right thing, unless we see action from the major parties this election, those dodgy employers are going to continue taking advantage of lax laws, a weak regulator and insufficient penalties to rip off these hardworking Australians," Mr Dean said.
Mr Dean believes that there is a quick fix for the problem, suggesting that the government should legislate that all employers must deposit money into a worker's super account at the same time as they deposit their salary into their bank account.
"Anything else is nothing more than a band-aid solution that won’t fix the problem and will only see more hardworking Australians have their super entitlements stolen by rogue employers," Mr Dean concluded.