Employee superannuation entitlements has been a hot topic in the SME community this year, with figures suggesting as much as 32 per cent of the workforce has been underpaid their Superannuation Guarantee (SG) entitlements.
According to the Australian Taxation Office (ATO), workers are collectively owed $2.85 billion in unpaid or underpaid superannuation from the 2014-15 financial year, amounting to 5.2 per cent of the total amount employers are legally required to pay.
It is the first time the ATO has publicly released details on the size of the shortfall.
However, it is not just SMEs that are responsible, with an internal audit by the Commonwealth Bank revealing it had underpaid thousands of employees millions in super.
“Employers who deliberately do not pay their workers’ superannuation entitlements are robbing their workers of their wages. This is illegal and won’t be tolerated,” said Federal Financial Services Minister Kelly O’Dwyer.
In a bid to reduce this shortfall and improve compliance rates, Ms O’Dwyer announced the government would provide the ATO with funding for a new Superannuation Guarantee Taskforce.
As well as dedicated oversight, the government will introduce measures previously lauded by business owners, such as increasingly the frequency of superannuation contribution reporting to “at least monthly” and a progressive rollout of Single Touch Payroll (STP).
“[We want] to safeguard and modernise the SG so employers can’t hide from their legal duty. We will give all Australians confidence that the superannuation system is working in their best interests,” Ms O’Dwyer said.
Ms O’Dwyer said STP will commence on 1 July 2018 for employers with 20 or more employees, while smaller firms will transition to STP the following year.
Despite the news, ATO Deputy Commissioner James O’Halloran said the ATO has already begun beefing up its efforts to ensure employer compliance.
“Superannuation has a vital role in providing for people’s retirement, and any non-payment is of concern,” he said.
“In addition to following up all reports of unpaid SG, we are increasing our proactive SG case work by one-third this financial year. We have improved our analysis of data to detect patterns in non-payment, and are working more closely with other government agencies to exchange information.”