The current superannuation payment system means that Australians are missing out on billions in unpaid super, according to Industry Super chief Bernie Dean.
Super is currently paid quarterly, meaning there’s plenty of opportunities for payments to slip through the cracks – sometimes deliberately. That adds up to a loss of almost $6 billion, according to Mr Dean.
“One in three workers [is] seeing on their payslip an amount that is suggested is making it to their super account, but it’s not,” Mr Dean told the standing committee on economics on Friday.
Mr Dean suggested that Australian workers should instead be paid super on payday to ensure the payments are being made regularly, calling the idea “a no-brainer”.
“The community [gets] it. They see this as a work entitlement. And we’ve seen what’s happened in recent weeks and months to those companies that have inadvertently or by design underpaid wages.”
Unpaid super hurts not just employees, but employers who do obey the law.
“It’s a terribly uneven playing field out there for employers that are paying super on time and in accordance with the law. Those that aren’t are gaining an inside run to winning contracts and to getting their costs down,” he said.
While the Recovering Unpaid Superannuation Bill is now before the senate, Mr Dean says it tackles the problem “from the wrong end” by offering amnesties to people who come forward about not paying super.
“If you know a third of the national workforce is missing out on superannuation through those employers, either inadvertently or by design… Would your first thought be to give them a free pass from a penalty?” he said
Mr Dean says that advances in financial technology should make the process of implementing a super-on-payday scheme easier.
“With the increased technology and e-commerce ecosystem, you really have to ask yourself whether an employer would have to actually go out of their way not to pay super on payday,” he said.
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