Unpaid super costing workers tens of thousands of dollars
Workers on the cusp of retirement who are short changed on their superannuation entitlements have nest eggs that are tens of thousands of dollars less than those who are paid correctly.
Using the latest ATO data from 2013-14, the research from Industry Super Australia found that people aged 60 to 64 on salaries ranging from $50,000 to $75,000 who weren’t correctly paid their SG that year, had overall super balances that were $35,089 or almost 40 per cent less than those who were.
Across all ages and all salaries, those Australians who were underpaid their super had balances that were $19,709 or 47 per cent lower than those who had received it.
Australian law requires employers to contribute 9.5 per cent in superannuation towards every worker over the age of 18 earning more than $450 (gross) a month. This is the Superannuation Guarantee.
However, a report released late last year found that 2.4 million or one-third of entitled workers were denied their SG in 2013-14. For the average worker, this represented $1,489 or four months’ worth of savings.
This new work draws from an ATO 2 per cent sample file of matched personal tax and superannuation records for 2013-14 and analyses the difference in balances for people who are underpaid employer super by nine categories of age and by six categories of wage and salary. In the matrix of 54 combinations, underpaid super was associated with a markedly lower balance in all combinations.