Un­paid su­per can start to add up

Gatton Star - - LIFE | STARS - MAK­ING MONEY with Paul Clitheroe

EACH year, bil­lions of dol­lars of work­ers’ su­per con­tri­bu­tions go un­paid, and the Tax Of­fice is crack­ing down on em­ploy­ers who dodge their com­pul­sory su­per obli­ga­tions.

The vast ma­jor­ity of bosses – 95% – do the right thing and pay their em­ployee su­per con­tri­bu­tions. The 5% who don’t may not sound like much but the Tax Of­fice says un­paid su­per con­tri­bu­tions added up to $2.85 bil­lion in 2014-15 alone.

That’s a lot of money that should be go­ing into work­ers’ re­tire­ment nest eggs.

One area be­hind un­paid su­per con­tri­bu­tions is the so-called black econ­omy. Work­ers in some in­dus­tries may, for ex­am­ple, be en­cour­aged to re­ceive their wage as cash in hand.

This can sound tempt­ing but it means miss­ing out on em­ployer-paid su­per.

Bear in mind, you can earn up to $18,200 an­nu­ally or about $1517 per month be­fore tax ap­plies.

On that in­come, your em­ployer would be re­spon­si­ble for monthly su­per con­tri­bu­tions of $144, which can add up over time. So think twice be­fore agree­ing to be “off the books”.

Another dan­ger zone is “sham con­tract­ing”. This is where the boss hires you as a con­trac­tor to avoid pay­ing com­pul­sory su­per (and other reg­u­lar en­ti­tle­ments), when in fact you’re re­ally work­ing as an em­ployee.

The Fair Work Om­buds­man is warn­ing about sham con­tract­ing, say­ing that giv­ing the boss an ABN (Aus­tralian Busi­ness Num­ber) doesn’t nec­es­sar­ily make you a con­trac­tor.

If you work reg­u­lar hours on an on­go­ing ba­sis un­der the di­rec­tion of your em­ployer, you could be re­garded as an em­ployee and en­ti­tled to em­ployer-paid su­per.

If you’re un­sure about your sit­u­a­tion, check out the FWO web­site (www.fair­work.gov.au) for more de­tails.

Im­por­tantly, all work­ers should re­view their su­per ac­count reg­u­larly to see that em­ployer con­tri­bu­tions have been paid. Sure, the con­tri­bu­tions may be listed on your pay slip but that doesn’t al­ways mean the money has been de­posited into your fund.

If it looks like you’re be­ing short-changed, speak with your em­ployer im­me­di­ately. If you’re not happy with the re­sponse, get in touch with the Tax Of­fice on 13 10 20.

Each year the tax of­fice looks into about 20,000 com­plaints about un­paid em­ployer con­tri­bu­tions.

Paul Clitheroe is a found­ing di­rec­tor of fi­nan­cial plan­ning firm ipac, Chair­man of the Aus­tralian Gov­ern­ment Fi­nan­cial Lit­er­acy Board and chief com­men­ta­tor for Money Mag­a­zine.

PHOTO: INDYPENDENZ

SU­PER OBLI­GA­TIONS: Are you keep­ing track to see if your em­ployer su­per con­tri­bu­tions are be­ing paid?

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