Unpaid Superannuation Costs Australian Workers AU$30,000 In Retirement: Report

A new report has revealed that millions of Australians have AU$5bn a year in unpaid superannuation, leaving them AU$30,000 poorer at retirement.

According to the Super Members Council (SMC), 2.8 million Australian workers were not paid their full amount of superannuation in 2021–2022, which amounted to AU$5.1 billion.

Over the past nine years, Australians have collectively missed out on AU$41.6 billion in superannuation, which amounts to each employee losing an average of AU$1,800 annually or AU$30,000 in retirement savings, HRD reported.

"Unpaid super locks too many Australians out of the full transformative benefits of the retirement system and leaves people poorer when they retire," SMC chief executive Misha Schubert said in a statement.

"Legislation to pay super on payday, combined with a stronger ATO enforcement regime and better support for workers to claim their super after insolvencies, is crucial to ensure millions of Australians who are currently being short-changed are paid their super on time and in full," Schubert said.

The SMC cautioned that women, migrant workers, younger workers, and those in insecure jobs are most at risk of unpaid superannuation. Younger workers (in their 20s) earning under AU$25,000 face a 50% chance of being underpaid, according to Australian Tax Office (ATO) data, News.co.au reported.

The SMC claimed that tracking and enforcement were hampered by the quarterly super payment mechanism, while adding that stronger legislation was required to ensure full super entitlements.

"Paying super on payday will modernize the super system and should hugely reduce underpayments. It's an excellent example of reform to benefit super fund members, which will make super fairer for workers and employers alike," Schubert said.