While it's long been the law that a proportion of an employee's base wage must be paid into super, a significant number of Australians employers fail to meet their obligations.
Missing out on weeks', months' or even years' worth of contributions can have a significant impact on your retirement savings. It's important you take steps to recoup what's yours, if you become aware that the organisation you work for is not doing the right thing.
Freelance property writer Amelia Barnes learnt the importance of keeping tabs on her super balance early in her working life.
She spent a year working casual shifts for a business in the hospitality sector, in the NSW regional city of Wagga Wagga, before commencing tertiary studies in 2010.
Barnes and her colleagues only discovered their super was not being paid when annual statements from their super fund arrived in the post.
"Our statements all indicated no money had been going in, despite the fact that super contributions had been recorded on our pay slips each week," she says.
"It was the latest in a string of fairly dodgy things our employer had done, such as paying us at part-time instead of casual rates to save money, despite the fact our hours changed every week.
"Of course, we were annoyed but being young we didn't fully realise the seriousness of the situation."
Understanding the system
From 1 July 2023, the Superannuation Guarantee System requires employers to pay 11 per cent of their employees' gross ordinary earnings into the superannuation fund of their choosing.
Payments must be made by 28 days after the end of each quarter (28 October, 28 January, 28 April, and 28 July).
Businesses that fail to meet their obligations are required by law to pay a Superannuation Guarantee Charge, comprising the outstanding amounts, general interest charge and an administration fee of $20 per employee, per quarter, to the ATO.
Employers underpaying superannuation or failing to pay it at all was a $2.45 billion problem in 2018-19 according to the ATO.
That's what's known as the 'Superannuation Guarantee gap' – the difference between the theoretical amount payable by employers to comply with their superannuation guarantee obligations and the actual contributions received by super funds.
The ATO receives around 20,000 reports of unpaid super guarantee contributions each year, the majority from employees or former employees of small businesses.
How to check you're receiving what's yours
From 1 July 2022, employers will be required to make super guarantee contributions to your superannuation fund if you're over 18, regardless of how much you are paid. If you're under 18, you are eligible to receive super if you work more than 30 hours a week.
You can confirm your eligibility for the Superannuation Guarantee with the ATO's 'Am I entitled to super?' tool and obtain an estimate of what you should be receiving using its 'Estimate my super' calculator, if you suspect your super is not being paid correctly.
A conversation with your employer should be the next step. The ATO recommends you ask how much super you're being paid, how often and into which fund. You should then check your member statements and contact your fund, to determine whether your contributions are being paid on time and in full.
If you believe your employer is not paying enough – or any – super, you can lodge an enquiry with the ATO who will investigate and attempt to remedy the matter.
Missing out on contributions for an extended period can have a substantial impact on your final superannuation balance, financial adviser Elliot Watson points out.
"It can be hard to make it up if you don't end up being paid the money," he says.
"Under normal investment theory, the sooner you invest, the better your return will be over a long period of time because, over the long term, markets do tend to appreciate.
"So, if your employer doesn't pay you for six months, or a year, or a couple of years, then you're potentially missing out on all that theoretical growth which has a compound effect over your remaining working life."
Checking your superannuation balance quarterly will ensure you're not underpaid or unpaid for years on end but only a minority of individuals are so vigilant.
Most folk find out they're being short-changed by word of mouth, as was the case in Barnes' situation.
"Generally some colleague will say to another, 'have you had your super?' and they'll say, 'I don't know' and then they'll do a bit of research and find out the employer is doing it to all the employees," Watson says.
Squaring the books
As an 18-year-old, Barnes says she felt reluctant and anxious about the prospect of pursuing her employer for the $1500 unpaid super owed to her.
"My dad is an employer and he educated me on my rights so I knew my boss wasn't doing the right thing but, regardless, I was intimidated by the situation," she says.
"I figured it wasn't much money at the end of the day and it was going to be several decades until I was able to access it.
"I realise now this was naïve."
Fortunately for Barnes, one of her colleagues sought assistance from Fair Work and several months later, all employees received their super contributions in full.
The experience has made her more cognisant of the importance of keeping track of her retirement savings.
"I've done my best to make sure my subsequent employers are doing the right thing."
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