More than a quarter of Queensland workers have been defrauded on super contributions they earned, according to Industry Super Australia (ISA).
The ISA also stated that the state’s massive rip-off would continue unless federal politicians intervene.
According to an analysis of tax data by Industry Super Australia (ISA), more than 570,000 Queensland workers were not paid $940 million in super between 2018 and 2019, losing an average of $1,600. Those duped may end up with up to $60,000 less in retirement.
Industry Super Australia Chief Executive Bernie Dean called it an “almost $1 billion a year rip off on a quarter of Queensland’s workers that politicians won’t fix”.
“Most employers are doing the right thing, but they are being undercut by competitors who are getting away with daylight robbery. Paying super with wages is the only way to get workers their money and level the playing field for business.
“Super is your money; it should be paid at the same time as wages. By not mandating the payment of super with wages, politicians are stopping millions getting what they are owed.”
The ISA report, Super Scandalous how to fix the $5 billion scourge of unpaid super, lax enforcement and loose laws that allows super to be paid quarterly into the workers’ fund have been exploited by some dodgy Queensland bosses to rip workers off.
The report states that Queensland’s total unpaid super debt has reached an eye-watering $5.5 billion in six years. Young Queensland workers and those on lower incomes are more likely to be underpaid, and super rip-offs are unfortunately common in blue-collar and hospitality jobs.
Resolving the Super mess
Superannuation compliance is complicated due to the reliance on payroll systems and the interpretation of various industrial awards.
The report’s main recommendation for addressing Queensland’s unpaid super scourge is to require all employers to pay super into a workers’ account when wages are paid.
“Not paying super with wages makes it difficult for workers to keep track of their money and allows payments to fall through the crack. Federal politicians have known about this solution for years but have failed to act.”
“Unpaid super creates an unequal playing field, as the employers doing the right thing are undercut by competitors who are ripping their workers off.
“Workers must primarily rely on the Australian Tax Office to recover their money as it is difficult to sue for super, but it only recovers a dismal 12 per cent of underpayments annually and rarely punishes dodgy bosses.
The report further states that if the ATO is unwilling or unable to recover Queensland workers’ savings, the law should be changed so that employees, the Fair Work Ombudsman, and others acting on behalf of workers can.
Legislators can commit to the following measures to address Queensland’s $1 billion unpaid super dues:
- Mandating super payment at the same time as wages.
- Lift enforcement activity and force the ATO to issue and publicise penalties for not paying super
- Empower employees and representatives to recover unpaid super debts.
- Extend the Fair Entitlement Guarantee so workers can recoup their savings if a company goes bust
Douglas Bucknell, Founder and CEO of Tailored Superannuation Solutions (TTS), has created a “Smart Default” fund, which can significantly increase superannuation members’ retirement balances.
“This fund will make a huge impact on the quality of life for Australians entering retirement because it will boost their retirement balances by, on average, at least 35 per cent,” Douglas said.
“We’re able to do this by replacing the one-size-fits-all ‘balanced option’ and simple age-based life-cycling default design with this ‘smart’ fund,” Mr Bucknell said.
“The days of simply dumping all members in the same investment option for life should be over.
“Superannuation trustees need to focus on improving retirement outcomes for their members – that’s what they’re paid to do.
“Our technology delivers on the Productivity Commission’s finding that well designed life-cycle solutions are better than the single strategy, one-size-fits-all approach,” he said.
The ‘Smart Default’ fund uses a SAAS solution to automatically tailor the existing investment options of superannuation funds to a member’s own projected retirement outcomes.
“We improve the competitive performance of superannuation funds enabling them to exceed the Federal Government performance targets and deliver superior outcomes to their members,” Mr Bucknell said.
In Australia, the sole purpose of superannuation is to provide payments to its members upon retirement (or attainment of a certain age) or beneficiaries if a member dies.
As per data from the Australian Prudential Regulation Authority (APRA) for the June 2021 quarter, superannuation assets totalled $3.3 trillion at the end of the quarter.
This was a 14.7 per cent increase in the value of total superannuation assets for the year ending June 2021 due to strong investment performance and positive contributions growth.