Workers lose as bosses sit on super
WORKERS are losing more than $200 million a year to a little-known loophole that lets bosses hold on to superannuation contributions instead of paying them at the same time as wages.
About 70 per cent of Australians mistakenly believe their super contributions are paid into their retirement fund when they receive their pay — when in fact many employers hold on to an employees’ payments for up to four months, which they are legally allowed to do.
But new data crunched by the Industry Super Australia found a 20-yearold would lose up to $12,475 at retirement by being paid their super entitlements quarterly instead of fortnightly.
A massive $225 million worth of retirement returns was estimated to be lost in the 2015-16 financial year because of delayed payments for all employees aged 20 to 69.
ISA chief executive Bernie Dean said workers were under the false impression that because superannuation contributions are shown on their pay slip their employer must have forwarded that amount to their retirement fund.
“At the moment there is no obligation on the employer to pay superannuation at the same time they pay wages,” Mr Dean said.
“If you put something on a pay slip employees are entitled to that money and it should be sent to their account.
“The vast majority of em- ployees in Australia are on automated payroll systems and the payment of superannuation into a super account is as easy and streamlined as paying wages.”
ISA said about 50 per cent of Australians were paid their super entitlements quarterly, while the other half receive theirs more frequently than that.
Most funds pay returns daily on account balances.
ISA is urging for law changes to make employers pay super into the funds at the same time as wages are sent to bank accounts.