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What if you found out you’d been missing out on a free $1700 a year? Given that’s enough to buy a return flight somewhere nice, cover the kids’ sporting costs for a year, or buy more than 1000 bags of rolled oats, I can imagine you’d be pretty upset. What if it was $30,000 instead? That’s a lot of oats.
Your employer should be paying 12 per cent of your before-tax earnings in super.Credit: Michael Howard
While this is a little bit hyperbolic, $1700 is roughly how much each year affected workers are missing out on due to their bosses not paying their super properly. A recent study from the Super Members Council (SMC) found in 2022/23, 3.3 million Australians missed out on $5.7 billion in super due to their entitlements being unpaid or underpaid.
By the time retirement rolls around, that $1700 can turn into upwards of $30,000, which is a massive deal when the average super balance at retirement age is between $300,000 to $400,000.
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What’s the problem?
This amount is on the up too, with SMC estimating an additional $600 million in super has gone unpaid since last year. Thankfully, there are new laws on the way to help combat this, with the government planning to legislate payday super by next July.
This will force employers to pay superannuation each time they pay their employees’ regular wage, rather than quarterly as current legislation requires (though some employers choose to pay more frequently), with beefed-up penalties for employers who fail to pay within seven days of wages. It will also increase retirement savings, as more regular payments improves the effect of compounding interest.
What you can do about it