Retirement
Are you getting all the super you’re entitled to?
Employees are losing $1.5 billion a year in unpaid superannuation due to a government loophole, an industry body has flagged.
Are you getting all the super you’re entitled to?
Employees are losing $1.5 billion a year in unpaid superannuation due to a government loophole, an industry body has flagged.
New research from Industry Super Australia has highlighted that between 2016 and 2017, more than 370,000 workers missed out on more than $1.5 billion in superannuation due to a loophole that allows employers to use an individual’s salary sacrificed contribution to fulfil super guarantee requirements.
The superannuation provider said the government’s amendment to the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No.1) Bill 2019 amends the Superannuation Guarantee (Administration) Act 1992 was a good first step but more is needed.
While the bill was designed to prevent an employer using salary sacrificing as part of the super guarantee, Industry Super has said the new legislation only helps 16.6 per cent of employers.
According to Industry Super Australia chief executive Bernie Dean, more needs to be done to protect workers that try to plan for retirement through salary sacrificing.
“More than 370,000 workers who think they’re doing the right thing and contributing to their own super are actually being double-crossed by their employers because of this loophole,” he explained.
Acknowledging that the issue with salary sacrificing is only “one part of a much bigger problem” facing Australia’s superannuation framework, Mr Dean has claimed that more needs to be done to clean up the industry as a whole.
“One in three workers are not getting paid super because dodgy bosses are hanging on to it and keeping it inside their business. It’s daylight robbery,” the chief executive exclaimed.
One proposition put forward by Industry Super as a potential solution to the problem would be the linking of superannuation with pay cycles to decrease employers’ incentives to underpay the quarterly super guarantee payment when it is due.
“The government needs to go further and stop unpaid super once and for all by making super payable on pay day,” Mr Dean said.
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