Super industry welcomes call to align super payments with wages
Senate inquiry hears quarterly super payments causing lost entitlements.
Tax Office Commissioner Chris Jordan this week called for the payment of the superannuation guarantees to align with the payment of employee wages, a move welcomed by Industry Super Australia.
Jordan told a Senate Estimates hearing in Canberra that the use of employee superannuation entitlements by business owners for cash flow is inappropriate and unacceptable, and while he didn’t want to pick a fight with small business owners, told senators they were “preaching to the converted”.
In March, the Senate inquiry into unpaid super heard the payment of super by quarter rather than with wages could be contributing to Australian workers missing out on billions of dollars in entitlements.
An Industry Super analysis of ATO data reveals 2.76 million Australian workers were underpaid their superannuation by an average $2,025 each at a total of $5.6 billion in 2013-14.
Industry Super Australia public affairs director Matt Linden is on board with the proposed solution and is calling on the government to act now to prevent further lost entitlements.
“The solution to unpaid super is clear to all of us, including the Tax Commissioner; what’s missing is political will,” Linden said.
“The onus is on Government to introduce legislation to ensure Super Guarantee payments are made more frequently, and insist that the ATO collect ordinary time earnings to help with compliance. Unpaid super is decimating retirement plans; driving up pension costs; and, in lost tax revenues, shortchanging all Australians."
Following the Senate inquiry into unpaid super earlier this year, senators described the Australian Tax Office’s reactive approach to unpaid super as “inadequate” and “problematic”.
Another recommendation to prevent lost entitlements includes removing the $450 monthly threshold in which employees are not required to pay super, with the super industry saying this is causing thousands of part-time employees to miss out.
If you think you have missed out on superannuation payments in the past, do a quick search to locate any missing superannuation.
- QSuper best performing growth super fund in 2018
- Here’s what the Productivity Commission’s proposed changes mean for your super
- Recent share market falls will impact superannuation returns this year
- “Most Australians will be comfortable in retirement,” Grattan Institute
- Online retailer Kogan to launch ultra-low-fee super product