Australian workers missed out on $5.1b in unpaid superannuation, SMC analysis reveals

Almost three million Australians missed out on billions of dollars in unpaid super in a single year, with the average affected worker left $30,000 worse off at retirement.

New analysis of Australian Taxation Office (ATO) data by the Super Members Council (SMC) found about 2.8 million workers missed out on some of their legal entitlements in 2021/22, amounting to $5.1 billion in total.

The average underpayment was $1800 per worker.

The SMC says it remains a systemic issue, affecting nearly one in four employees, with younger people, women in low-paid industries, and newly arrived workers worst hit.

The report also found that workers in their 20s who earn less than $25,000 a year have a one-in-two chance of being underpaid, with those in the construction, trades, and transport industries most likely to be impacted.

The statistics underscore a need for tougher compliance and legislative reform, SMC chief executive Misha Schubert said — including payday super.

In the 2023-24 federal budget, the government committed to paying super at the same time as wages and salaries, rather than every quarter, as rules dictate currently, from July 2026.

When paid at the same time as wages, employees and the ATO are thought to have a better chance of noticing and resolving any incorrectly paid or missing super.

However, legislation is yet to be introduced to parliament.

“Paying super on payday will modernise the super system and should hugely reduce underpayments,” Schubert said.

“Unpaid super locks too many Australians out of the full transformative benefits of the retirement system and leaves people poorer when they retire.”

A spokesperson for Assistant Treasurer Stephen Jones said payday super was part of a broader agenda to bolster the system.

“The government has a significant policy agenda to strengthen the superannuation system so that all Australians can retire with dignity,” the spokesperson said.

Opposition financial services spokesman Luke Howarth warned small businesses would face liquidity and cash flow challenges from more frequent super guarantee payments.

“Small businesses deserve certainty about if this will happen, when it will start and how it will work,” he told AAP.

“Payday super can be added to the long list of legislation promised by the assistant treasurer that has been hugely delayed or is yet to materialise.”

- With AAP