What Happens to Superannuation When You Get Underpaid?
In Australia, superannuation exists to help Aussies pad out their retirement funds. The organisational pension program is an important part of national workplace culture, and exists to ensure all workers can accumulate some form of retirement savings.
But according to the latest data, one third of Australian workers are being underpaid superannuation. On average this form of ‘wage theft’ amounts to more than $2000 a year, with over 2.7 million workers affected.
Unpaid super sweeps Australia
Darwin and Palmerston in the Northern Territory are two of the worst offenders, with acute underpayment also present across central and western Queensland. Sydney’s south west was pegged as a wage theft hotspot, with parts of eastern and western Victoria also affected.
According to head researcher Phil Gallagher, those with less secure jobs are at “significant risk” of being underpaid, either deliberately, or inadvertently. This includes casual workers, as well as young and low-income employees.
It’s not always intentional, with Gallagher explaining that one of the biggest causes of underpaid super is national policies.
“There’s a significant issue with the policy,” he mused in a recent interview with Guardian Australia. “We’ve had multiple instances in the last few months of employers saying, ‘Oh, we’ve underpaid?’”
He adds that a major culprit is recent changes to the previous award base. In 2008, it switched to ordinary time earnings, and coincided with the global financial crisis. “Employers had a lot of other things to think about and didn’t particularly update their systems, so they just kept doing whatever they’d been doing.”
Plain and simple, wage theft has a direct impact on superannuation contributions. Which raises the question of what to do if you think you’ve been underpaid. To make things easy, we’ve put together a step by step guide covering everything you need to know about taking action, and topping up your super.
Step 1: Confirm you’re eligible for the Super Guarantee (SG)
Officially, the compulsory contributions made by employers on behalf of their employees is known as the Super Guarantee (SG). Before going any further, you should check you’re eligible for SG using the ATO’s ‘Am I Entitled to Super’ tool. Generally, an employer needs to pay super if you’re either:
- Over 18 years old and are paid at least $450 (before tax) in salary or wages per calendar month
- Under 18 years old, working more than 30 hours per week, and paid at least $450 in salary or wages (before tax) per calendar month
These guidelines stick, regardless of whether you’re a casual, part time, or full time employee.
Step 2: Estimate your super
If you’re eligible for SG, you can then use the ATO’s ‘Estimate my Super’ tool to check how much super your employer should be paying. You’ll need to enter the total period of time in question, as well as your ordinary time earnings.
Step 3: Chat to your employer
Often, the easiest way to resolve issues is by simply chatting to your employer. In lots of cases, unpaid super is simply an accident or misunderstanding that your employer will want to clear up ASAP. You can also find out exactly what contributions your employer is making, and into what fund. If there are still any issues you can proceed to the next step.
Step 4: Check your member statement
Every time you start a job you should be asked to nominate a super fund. To check if you’ve been underpaid you’ll need to refer back to your latest member statement. The average Australian has four super accounts in their name, which means things can get confusing. Generally, it’s best to roll all your super accounts into one as this will save on fees, and make it easier to track employer contributions.
Step 5: Lodge an inquiry
If you haven’t resolved your case you can lodge an inquiry with the ATO. Use this online tool to get the ball rolling, and report your employer for underpayment. The ATO will then launch an investigation and keep you updated along the way. Ideally, representatives will be able to recover your unpaid super, and help you cushion your retirement fund for the future.
Wage theft and underpaid super go hand in hand. This means you need to take a proactive approach to empowering yourself with a fair go. Whether you’re questioning your latest payslip or suspect you’ve been underpaid for years, there’s always help and support available. All you have to do is ask.