Employers who delay paying superannuation are costing their workers a fortune, experts warn.
In fact, workers are missing out on $225 million in interest because employers only have to pay super quarterly, according to Industry Super Australia.
The advocacy group has therefore renewed its call for super to be paid more frequently.
Employers who delay paying superannuation cost workers
According to the analysis, in 2015:
- 2.3 million workers aged 20-29 collectively missed out on $35 million in interest on their super balances;
- 1.9 million aged 40-49 missed out on $55 million; and
- 1.6 million aged 50-59 missed out on $50 million.
For a person working full-time on average wages from 20 to 67 years old, this represents a loss of $12,475 by retirement.
According to a survey conducted by ISA, 70 percent of workers assume that their employer has paid super if it is listed on their pay slips.
However, a note on a pay slip does not mean the contribution has been made.
In fact, many employers wait the full three months before depositing the money into super accounts.
ISA chief executive Bernie Dean says:
“We’ve welcomed any and all efforts to improve compliance, but it won’t change the fact that some employers will go on using the payment hiatus for business cash flow.
“Essentially, workers are subsiding businesses at the expense of their retirement savings …
“It’s not fair, and the rules must change.”
Pay super same time as wages
ISA is calling on the Government to require employers to make super payments at the same time as wage payments.
A Senate Committee made the same recommendation in 2017.
Miles Heffernan from Fair Work Claims made the same recommendation to the Queensland government’s wage theft inquiry last year.
“If employers pay super at the same time as a worker’s wage, whether that’s fortnightly, or monthly, it is harder for them to not pay it.
“A common form of wage theft is a failure to pay super to an employee.
“And unfortunately, employers can get away with it for months or years without being detected, because super only gets put into an account every quarter.”
Mr Heffernan said unpaid super is effectively stealing from a worker’s retirement.
“The quarterly deadline for paying super is a joke and needs to change,” he said.
“Superannuation is a part of someone’s wage and should be paid at the same time as that person’s regular wage – simple.”
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