Pay SG at same time as wages, says ISA

Despite the recent legislation efforts of the Federal Government employers are still under no obligation to pay the superannuation guarantee (SG) at the time it is disclosed in workers’ pay packets, according to Industry Super Australia (ISA).

The industry funds are calling on the Government to legislate to compel employers to pay the SG at the same time they pay wages.

ISA has conducted a new analysis of Australian Taxation Office (ATO) data which it says suggests the scourge of unpaid super is deteriorating with 2.98 million Australians being short-changed $5.9 billion in super entitlements in 2015-16, up 220,000 employees and $300 million compared to two years earlier.

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It said that for the one in three workers eligible for SG affected, the average underpayment stood at $1,994 or the equivalent of $77 per fortnightly pay.

The ISA analysis said that those most at risk of being impacted by rogue employers were younger workers, those in part-time and casual work and those in blue-collar jobs.

It found:

  • Workers under the age of 30 are a third more likely to miss out on their legal entitlement compared to older workers;
  • Over 45 per cent of labourers, machinery operators and drivers have collectively missed out on more than $820 million making it to their super accounts;
  • Part-time and casual workers earning less than $30,000 are a third more likely to miss out on super compared to full-time workers and those on higher salaries.

Commenting on the research, ISA chief executive, Bernie Dean said it was apparent some employers were taking advantage of outdated super laws coupled with lower skilled and new workforce entrants who were less likely to know their entitlements or ask questions.

“It’s obvious that the rise of insecure employment is amplifying the already widespread problem of unpaid super,” he said. “This money should be in workers accounts, not on the ledger of an employer that’s taking advantage of lax laws and a cop-free environment.”

“Despite new laws before the Parliament that should improve reporting of super, employers are still under no obligation to actually pay super contributions at the time they are disclosed on payslips,” Dean said. “The number one policy to fix the rip offs is to require employers to pay super at the same time as wages and salary, rather than allow the money to be used for other things for up to four months.”




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This good idea should be augmented by requiring criminal charges to be laid against the boss of any firm not paying appropriate superannuation to employees. This would be in the interest of individual employees and their financial advisers.

^^^^^^ virtue signalling 101. Selflessly true again Hedware. You exist solely for the downtrodden.

"Criminal charges"? So an employer is at risk of criminal charges if they make a mistake with their superannuation payments?

Yet another example of bully boy unionism taking things way too far, and creating disincentives to employ people. Union excesses are the reason Australia has so many low income contractors and self employed.

If a mistake was genuinely made, then that can be defended in court and the employer can be found not guilty.

But in so many of these cases of employers not paying the superannuation contribution to employees, there's no mistake but a deliberate action to steal from employees. It's theft just like stealing a handkerchief. It is called white collar crime.

The victim has little recourse to get recovery and misses out on building up a nest egg (and financial planners miss out on clients and their fees).

Remember John Howard's brother who managed to get out of paying considerable funds owning to his employees. The result was that the Federal Government has had to come in with a last resort plan for taxpayers to make up the missing amounts of superannuation contributions.
This is no matter caused by the unions but the greed and avarice of some owner employers. If anything the unions have been derelict in not doing more to bring those low-life employers to court. A few railings might cause more appropriate behaviour by employers towards the legal entitlements of their employees.

I’m genuinely all for it too, it would allow employees to take better advantage of dollar cost averaging. These days it should be as simple as a payment made in two parts through Xero or similar. As long as employers are able to pursue criminal charges against any action knowingly committed by an employee that costs their business financially. I think that’s completely fair and would protect both parties a bit more.

Yeh line them up and shoot them in true Marxist fashion. Who’s next Hedware?

Hedware - you are the gift that just keeps giving.

yes just like herpes isn't he/it - the gift that just keeps giving, irritating and annoying and seemingly just won't go away despite how much it's not wanted...

I like it when you get down to kindergarten name calling as I know you have lost. You have lost a few times lately. You are not much fun anymore.

Don't worry about him Hedware, you just need to concentrate on well considered arguments constructed upon a solid base of axioms. Despite endless posts on this site you have not been able to do that just once.

...and speaking about losing, it is universally understood that herpes is never wanted or much fun, akin to your presence.

As much as I loathe the union funds and their constant lies & deception, this particular idea is actually a good one.

Apart from improving the likelihood of correct entitlements being paid, it will also make it easier for members and their advisers to keep track of SG contributions within a financial year. Lots of employers vary their June quarter SG payments to before/after EOFY depending on the financial appearance they want to create. Makes it very hard to coordinate sal sac and personal deductible contributions.

You are correct particularly in helping financial advisors do their work.

This is one of those issues that I could not understand why both financial planning associations were not relentlessly pursuing government(s) to bring in this measure.

Who says they weren't? Labour government didn't do much about it did they? I personally reported a number of my clients' employers to the ATO and they did absolutely nothing.

Yes I agree. The Labor Governments did not do anything about this and other matters and stand condemned for their inaction. Even in Opposition the Labor Party has been less than visible in advocating change to protect and assist supernatants. In contrast National Party MP John Williams was the person to successfully engineer the Royal Commission and the Labor Party belatedly came into support the call.

Yes I agree. The Labor Governments did not do anything about this and other matters and stand condemned for their inaction. Even in Opposition the Labor Party has been less than visible in advocating change to protect and assist supernatants. In contrast National Party MP John Williams was the person to successfully engineer the Royal Commission and the Labor Party belatedly came into support the call.

Something that is in the interests of clients is not being supported by folks because ISA have suggested it. I'm beginning to think that if ISA said the sky was blue some of you would go out of your way to argue that it was pink with purple polka dots.

Who here has done what you are suggesting David?

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