Unpaid super losses for ACT workers reach $80 million in a year, payday super tipped to stem the losses

Almost one in five ACT workers have been underpaid super - missing out on a total of $80 million in a year, new research shows.

But a plan to pay super on payday should help stem those losses.

Super Members Council analysis of tax file data shows more than 34,000 ACT workers were short-changed an average of $2,330 each in 2021-22. Over five years, ACT workers lost $357 million.

Unpaid super is denying ACT workers the full transformative benefits of super and can cost the average worker more than $30,000 from their final retirement nest egg. 

The Australian Government has promised reforms that would mean super must be paid in sync with a worker’s 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 stem unpaid super.

Payday super will lead to almost 9 million Australians getting 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 said payday super laws would help all Australians get the full benefits of our transformative retirement system.

“Paying super on payday will modernise the super system to reduce underpayments for ACT workers. This reform will be fairer for both workers and employers,” Ms Schubert said.

“Passing payday super laws this Parliamentary term is crucial to ensure Canberrans who are currently being short-changed are paid their super on time and in full.”

“Unpaid super 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 will be introduced that encourages employers to fix any inadvertent underpayments quickly, escalating to stronger penalties for deliberate or repeated underpayments.

Shifting to payday super will level the playing field for all businesses – so employers who pay their workers super on time and in full 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 are urgent to fix ACT’s persistent unpaid super problem.”

New SMC analysis released in a report on unpaid super in Australia in August 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 ACT by federal electorate during 2021-22

 Source: Super Members Council analysis of ATO 2 per cent sample file, 2021-22, and ABS data.

James Dowling: jdowling@smcaustralia.com, 0429 437 851