Victorian employers are underpaying their workers an estimated $1.2 billion (US$861 million) each year in superannuation, an analysis has found.
According to Industry Super Australia (ISA), more than 760,000 employees in the state received $1,606 (US$1,153) less in retirement savings on average in the 2018/2019 financial year.
However, ISA chief executive Bernie Dean said not many workers had knowledge of the problem.
“This is a $1.2 billion a year rip off affecting nearly a third of Victoria’s workers, yet many of them remain unaware, assuming super is being paid because it appears on their payslip,” he said.
The ISA said that while the Australian Taxation Office (ATO) was responsible for helping workers get back their unpaid super, it only recovered around 12 percent of the amount owed every year.
Dean is calling for new laws that compel employers to pay super contributions and wages simultaneously rather than the current situation where it is legal to pay super to workers just four times a year.
“Super is your money, you should get it paid at the same time you get your wages. By not mandating the payment of super with wages, politicians are stopping Victorian workers from getting what they are owed,” Dean said.
He also wanted the ATO to take measures against employers who underpaid super, plus an extension of the Fair Entitlement Guarantee that provides workers with a means to recoup their money if a business goes bankrupt.
The electorates of Holt in Melbourne’s south-east and Corangamite near Geelong had the highest percentage of underpaid workers since one in three employees in these two areas did not receive their full super entitlements.
On the other hand, the electorate of Indi in the northeast of Victoria saw the greatest average amount of unpaid super, with more than 17,000 workers missing out on $1,749 (US$1,256) in payment, according to the ISA.
In federal treasurer Josh Frydenberg’s electorate of Kooyong, over a quarter of employees have got paid $1,535 (US$1,102) less on average.
The ISA said workers who did not receive their super money in full could lose up to $60,000 when they retired.
The office of superannuation minister Jane Hume said that in recent years, the ATO had carried out 19,000 reviews of super payments and discovered that employers owed $880 million (US$632 million) in unpaid super.
“The Morrison government takes superannuation guarantee compliance very seriously,” the spokesperson told AAP.
He said the federal government had taken measures against super underpayments such as imposing penalties of up to 12 months in prison on repeat offenders and granted stronger powers to the ATO.
