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ATO report states the super gap has seen a steady rise from AU$3.5 billion, since 2016-17. Pixabay

Australian workers have lost out on a record AU$5.2 billion in superannuation after employers failed to make their required contributions in the last financial year, the annual report by the Australian Taxation Office (ATO) stated, revealing the superannuation gap.

ATO data showed that the net super disparity -- the portion of existing unpaid super gap even after the recovery attempts -- has dropped from 6.7% in 2022-23 to 6.3% in 2023-24. However, the total unpaid super has increased to AU$5.2 billion this year, compared to AU$4.8 billion in the previous year.

The report stated that the super gap has seen a steady rise from AU$3.5 billion, since 2016-17.

The superannuation guarantee charges rose from AU$1.2 billion in 2022-23 to AU$1.9 billion in 2023-24, which the ATO said was partly due to a boost in its compliance efforts.

"At 30 June 2024, super guarantee debt on hand was approximately $3.7bn, of which $80m is disputed debt and $1.4bn is insolvent debt; $2.2bn of this amount is assessed as being collectable debt owed by approximately 89,300 employers," the ATO report said.

Meanwhile, an analysis by the Super Members Council (SMC) showed that the total unpaid super in the last three years had been nearly AU$18.6 billion. From this, AU$4.2 billion was recovered through super guarantee charges, representing the underpayments that were identified and reported to employers. Hence, the SMC's findings showed the ATO had uncovered only about 22.5% of the total estimated unpaid super, The Guardian reported.

While the ATO acknowledged that the issue was more widespread now, the super charges collected were much below their projections for underpayment and non-compliance, SMC's executive general manager of strategy and insights, Matthew Linden, pointed out.

Additionally, the long delay between employees realizing they were being underpaid and the ATO identifying the underpayment of super could turn out to be "too late in circumstances where businesses are not able to repay that debt." Excluding superannuation from the unpaid wages safety net "makes no sense as it is the only employee entitlement not covered," he added.

"This is why changes to the 30-year-old system to introduce payday super are so important," Linden said. "The ATO will have the tools it really needs to combat this problem properly."