07 October 2024
Around a quarter of West Australian workers have been underpaid super - missing out on a total of $600 million in a year, new research shows.
But a move to pay super more frequently could curb those losses.
Super Members Council analysis of tax file data shows about 310,000 WA workers were short- changed an average of $1,900 each in 2021-22. Over five years, WA workers lost $2.6 billion.
Unpaid super is denying WA workers the full transformative benefits of super and can cost the average worker more than $30,000 from their final nest egg.
The Australian Government promised reforms that would mean super must be paid in sync with a workers’ wages – instead of at least once a quarter.
This crucial reform, to be introduced from July 2026 and long-championed by the profit-to-member super sector - will modernise the super payment system and dramatically help to curb unpaid super.
Payday super will lead to almost 9 million Australians receiving their super contributions more frequently throughout their working life. SMC analysis shows the average worker could be $7,700 better off in retirement with payday super because the returns accrue and compound sooner.
Super Members Council CEO Misha Schubert thanked the Australian Government – especially Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones - for a strong commitment to payday super reform to ensure Australians get the full benefits of our transformative retirement system.
“Paying super on payday will modernise the super system and should hugely reduce underpayments for West Australians. It’s an excellent example of reform to benefit everyday Australians with super, and will strengthen fairness for both workers and employers,” Ms Schubert said.
“Passing payday super into law this Parliamentary term is crucial to ensure the West Australians who are currently being short-changed are paid their super on time and in full.”
“Unpaid super locks too many Australians out of the full transformative benefits of the retirement system and leaves people poorer when they retire. A unified push from Government, all MPs and Senators, the super industry, employers and workers are needed to stamp it out.”
A new compliance regime that encourages employers to fix any in advertent underpayments quickly, escalating to more serious consequences if employers deliberately or repeatedly do not pay their workers’ super, will also be introduced.
Shifting to payday super will level the playing field for all businesses – so employers who pay their workers super correctly are not undercut by those who have not.
It also creates smoother cashflow management for small business. Quarterly super payment allows large super liabilities to accrue and creates an administrative burden from time-consuming reconciliations, which can be prone to miscalculations leading to incorrect payments.
“We urge all Parliamentarians and stakeholders to work towards passing payday super legislation this term. These pivotal reforms should not be delayed as they will work to fix West Australia’s stubbornly persistent unpaid super problem.”
New SMC analysis released in a report on unpaid super in Australia this month found:
- In one year, 2.8 million Australians missed out on $5.1 billion in legal super entitlements (2021-22)
- Over 9 years, Australians have missed out on $41.6 billion in unpaid super
- The average affected worker missed out on $1,800 in super in a year – which could mean more than $30,000 less in retirement savings for a typical worker
Unpaid super in Western Australian by federal electorate during 2021-22
|
|
People underpaid |
Average underpayment |
Percentage of people underpaid |
Total ($M) |
|
Durack |
22,700 |
$2,010 |
25% |
$45.6 |
|
Brand |
21,300 |
$2,120 |
26% |
$45.2 |
|
Cowan |
22,300 |
$1,940 |
26% |
$43.3 |
|
Forrest |
19,600 |
$2,210 |
27% |
$43.2 |
|
Fremantle |
22,400 |
$1,920 |
27% |
$43.1 |
|
Swan |
21,800 |
$1,940 |
25% |
$42.4 |
|
Curtin |
20,900 |
$2,020 |
26% |
$42.3 |
|
O'Connor |
22,300 |
$1,840 |
29% |
$41.0 |
|
Hasluck |
19,100 |
$1,960 |
25% |
$37.5 |
|
Perth |
19,400 |
$1,930 |
23% |
$37.5 |
|
Burt |
20,750 |
$1,810 |
25% |
$37.5 |
|
Tangney |
20,700 |
$1,750 |
24% |
$36.2 |
|
Pearce |
20,450 |
$1,760 |
26% |
$36.0 |
|
Canning |
17,950 |
$1,940 |
25% |
$34.9 |
|
Moore |
19,100 |
$1,780 |
25% |
$33.9 |
|
WA total |
310,750 |
$1,930 |
26% |
$599.6 |
Source: Super Members Council analysis of ATO 2 per cent sample file, 2021-22, and ABS data.
About us:
The Super Members Council is a strong voice for over 11 million Australians who have over $1.5 trillion in retirement savings managed by a profit-to-member super fund. Our purpose is to protect and promote the interestes of super fund members throught their lives.
Contact details:
James Dowling: 0429 437 851, jdowling@smcaustralia.com