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[av_heading tag=’h2′ padding=’10’ heading=’There’s a staggering amount of superannuation that may never find its way to the people who should be spending it in their retirement years.’ color=” style=’blockquote modern-quote modern-centered’ custom_font=” size=” subheading_active=” subheading_size=’15’ custom_class=” admin_preview_bg=” av-desktop-hide=” av-medium-hide=” av-small-hide=” av-mini-hide=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=”]
According to ATO figures, there’s approximately $12 billion in unclaimed super in their coffers. That’s a lot of money just waiting to be transferred to Aussies who have lost track of account balances after changing their job, name or address. Getting this super back is pretty straightforward and either the ATO, your myGov account, or your current super fund(s) can help you bring all your super together.
[av_heading tag=’h3′ padding=’10’ heading=’ According to ATO figures, there’s approximately $12 billion in unclaimed super in their coffers. That’s a lot of money just waiting to be transferred to Aussies who have lost track of account balances after changing their job, name or address. Getting this super back is pretty straightforward and either the ATO, your myGov account, or your current super fund(s) can help you bring all your super together.’ color=” style=’blockquote modern-quote modern-centered’ custom_font=” size=” subheading_active=” subheading_size=’15’ custom_class=” admin_preview_bg=” av-desktop-hide=” av-medium-hide=” av-small-hide=” av-mini-hide=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=”][/av_heading]
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Sadly, the amount of super that never gets paid at all is even more alarming. Back in 2016, Industry Super published a report claiming that around 2.4 million employees are being short-changed in mandatory super payments to the tune of $3.6 billion per year. At the time, the report estimated the total figure for unpaid super could reach $66 billion by 2024. That’s a huge potential problem with what’s known as super non-compliance – employers deliberately failing to pay money their workers are legally entitled to under the super guarantee (SG).
Who should receive super from their employer?
Most employees, whether full or part-time, salaried or casual, must be paid super contributions by their employer under the SG. When you receive more than $450 per month in wages or salary, then you’re entitled to the SG. If you’re under 18 or working as a private/domestic employee – such as a nanny – you’ll need to be working for more than 30 hours per week to qualify.
How much super should you be getting and when?
Under current legislation, SG payments should be made at the rate of 9.5% of your salary, or ordinary time earnings (OTE) if you’re a casual worker. Your employer is required to make these payments to your nominated super fund(s) every three months at least. When an employer pays your super later than they should, there are still consequences for your retirement savings. The bigger your super balance the more money you can earn from investing it. So for each and every day that a dollar is in your super account, it can be helping you grow your retirement nest egg.
Missing out on these payments is going to have an even greater impact on your super balance in the next few years. Legislation has been passed to increase the SG rate from 1 July 2021 and the rate will increase by 0.5% each year from this date, reaching 12% by 1 July 2025.
Are you missing out?
According to the Industry Super report, it’s small and medium sized businesses that are most likely to come up short with SG payments. And an ABC news story from May 2018 highlights how much of a problem unpaid super can be in the hospitality industry. Workers report having seen super payments on their pay advice, not realising the money wasn’t being paid to their super provider.
Take some time to check your latest super statement to see when SG payments have been made and how much is being paid. Many funds will also offer you a login so you can check in now, and in the future, to make sure contributions from your employer are up to date.
Super shortfall – what you can do
If you find your super balance isn’t all it should be due to super non-compliance, the ATO and Fair Work Ombudsman should be your first port of call for more information, or to report the problem. And with the ATO having announced a 12-month amnesty for unpaid super starting from 24 May 2018, employers could be expected to be more co-operative in settling an unpaid super claim without the usual stiff penalties that would usually apply.
The amnesty is part of a raft of proposed legislative changes designed to crack-down on super non-compliance. It includes harsher penalties for directors of businesses who fail to pay super and requirements for immediate reporting of employer SG contributions to the ATO by super funds. This will act as an ‘early warning’ system for non-payment of super and take the onus off individuals to alert the ATO when there’s a problem. However, at the time of writing, this legislation has not been passed. So for the time being, it’s very important to take an interest in your super and act if you discover that you aren’t receiving your full SG contributions.
Source: Money & Life. 5th September 2018